SEMA News—December 2020

Supplier Spotlight

Edelbrock Group and Quadratec

Two Case Studies in COVID-19-Era Best Practices That Can Boost Stability and Sales

By Mike Imlay

Unprecedented times have called for unprecedented measures to keep production lines and warehouse facilities going, yet companies that are getting it right have found not only stability but major sales surges as enthusiasts demand parts for their stay-at-home automotive projects.

Founded in 1938 and headquartered in Torrance, California, Edelbrock is a well-known industry name. Recently the legacy brand entered into a merger with the Comp Performance Group, although the two companies continue to operate as separate entities. Chris Douglas, Edelbrock Group chief commercial officer, described the company’s current product mix as evenly split between motorsports, the street and hot-rod scene, and the industrial segment. The company also sells through all channels, from mass merchandisers to direct-to-consumer e-commerce. Like other businesses, the manufacturer saw signs of uncertainty this past March, followed by hopeful indicators as the industry and consumers adapted to the obstacles imposed by the COVID-19 pandemic.

“March was good for the first half, but then there was a distinct softening in the back end of the month as the gravity of the situation and shutdowns settled upon the country,” Douglas explained. However, he added, “From a market perspective, sales and overall interest has been extremely robust since early April. Beyond the COVID-19 effect, the normal market drivers—namely weather patterns—have been extremely favorable this year, which is a nice change from recent years.”

Thanks to those factors, along with key actions the company took during the pandemic’s earliest weeks, Douglas said that the entire Comp/Edelbrock Group is now experiencing across-the-board growth in all its brands and categories. He cited superchargers, EFI, carburetors, transmissions and valvetrains as notable “high flyers,” adding that the “sales trends were present pre-COVID-19, but the last 120 days have greatly amplified them.”

Across the country, in West Chester, Pennsylvania, Quadratec is celebrating its 30th year of selling a wide range of Jeep products through print catalogs and a robust e-commerce platform. As advertised on its website, the company currently offers more than 100,000 parts and accessories representing more than 100 leading aftermarket brands, along with its own branded line of products. Going into 2021, the company will also add wholesale operations to its mix. Quadratec Chief Marketing Officer Ralph S. Mondeaux said that the company quickly found its footing and has seen a healthy increase in revenues over the last several months despite the business disruptions of March.

“I think it was the first or second week of March when we sent all our employees home, and so we shifted pretty quickly in terms of getting all our employees computers, going into a world of Zoom meetings and everything else,” he said. “In hindsight, it was a much smoother transition than I could ever have envisioned, and from an employee perspective, they were extremely gracious. Nobody complained. We knew we had to do it to keep the employee base safe, so everybody was really good about it.”

Not surprisingly, do-it-yourself Jeeping applications are currently the biggest hits with Quadratec customers.

“Really, the replacement parts and accessories are the two big categories that took off during this time,” Mondeaux reported. “If you think about it, it’s all project-based. Rather than maybe putting on a whole new front bumper, they’d much rather put some fender flares on, or they might try an engine tune-up and so forth.”

Fully embracing a wide range of digital channels for marketing and e-commerce is another winning strategy. Knowing its customers had many children now schooling at home, Quadratec launched a highly successful #HandsOnHomeSchool social-media campaign to teach kids basic Jeep and automotive skills.

Keeping Employees Safe and Informed

Both Mondeaux and Douglas stressed that the early steps their respective companies took to promote employee safety were essential to stability and success.

“We met COVID-19 head-on with practical, data-based decisions that prioritized keeping our employees safe and gainfully employed while continuing to serve our customers at the best level possible given the first two priorities,” Douglas said. “When you are in a situation that has so many unknown variables, we find that it’s best to not be reactionary or too emotional. We increased the frequency of our internal communication, and we were extremely transparent in our decision-making process each step of the way.

“Internally, we have operated mostly normally with the exception of the additional precautions and intent focus on keeping our workforce healthy and safe. We have utilized a work-from-home model in select areas of the company, but our employees generally prefer to be in the office and functioning as a team.”

To keep the team healthy, Edelbrock altered shift hours to lessen work-area density, initiated aggressive safety and cleaning protocols, and adopted daily screenings and temperature checks to identify potential COVID-19 exposures as quickly as possible. The company also developed a well-defined process for handling positive COVID-19 cases.

According to Douglas, the pandemic “has really highlighted the importance of organizational processes, being nimble, and flexibility in leadership style.”

Flexibility was a key word for Quadratec as well, given the unpredictable course of the virus and government responses. In March, the company initially believed that its remote work arrangements for corporate employees would be temporary but later had to extend them as the COVID-19 continued its spread through Pennsylvania.

“To me, one of the biggest motivators is how well all the employees adapted in literally a week, going from a corporate campus that’s tons of employees working on-site together to nobody,” Mondeaux noted. “But everybody was very receptive to working at home and making this work, so lesson learned there. Of course, we also have a warehouse here in West Chester, and so that stayed open and operational during this time.

“Everybody was equipped with the proper masks. We did temperature checks the moment they came in the door. We had foot washes at the door and hand sanitizer pretty much in every cube, so we took a lot of measures to make sure our warehouse employees were extremely safe.”

Just as importantly, Quadratec also instituted an employee communications strategy to keep staff and workers updated on company responses to the pandemic as well as COVID-19 policy decisions being made at local, state and federal levels.

“It was really an information campaign making sure our employees were well informed on the risks that were out there and how to best take care of themselves,” Mondeaux explained.

Structure, Leadership and Agility

At Edelbrock, Douglas said that adherence to business fundamentals and an experienced and dexterous staff provided a solid foundation for dealing with the pandemic.

“On the heels of closing the Edelbrock and Comp Performance Group transaction in late January, it has been great to have a much deeper ‘bench’ when it comes to market data, management talent and experience, and resources outside of the automotive aftermarket,” he emphasized. “Beyond that, I would point to having a culture of being nimble yet methodical as extremely beneficial when it comes to dealing with dynamic situations. It’s easy to be a leader during the good times, but strong leadership really shows during times of adversity—and we are fortunate to have great leaders throughout the organization who are passionate about this industry.”

A grounded but agile corporate culture also contributed to Quadratec’s quick adjustment to rapidly changing events.

“From the moment it started to go down, I think we moved quicker than maybe other companies in the area [to get] people equipment and get them home as quickly as possible,” Mondeaux said. “Again, it is in the best interests of our employees. We’re a 30-year-old family-run business, and so our employees are our family. We want to make sure they’re taken care of.”

Demonstrating care for employees was the first order of business for Edelbrock. Daily COVID-19 screenings and other well-recognized health protocols attended to employee safety, while intensified communications addressed their need for transparency and information.

The Right Messaging

With employee safety and communications covered, both companies assessed and adjusted their external communications, especially to business partners and consumers. Realizing that public sentiment favored companies acting responsibly toward their employees and community, both companies made their responsiveness to the pandemic part of their messaging.

“As a company in the automotive industry, we let our customers know we were still open for business, [as well as] the measures we were taking to make sure that the people in the warehouse and the people in the call center were all taking the proper precautions to stay safe and so forth,” Mondeaux said.

Meanwhile, in the absence of the 2020 SEMA Show and other 2021 industry events, Douglas said that Edelbrock Group plans to up its messaging across a variety of channels in the months ahead. Again, while the messaging itself will change, its crafting will be consistent with a methodical mindset.

“Our plan is to be more aggressive with overall marketing and market communications,” he said. “I think you can look at the loss of the SEMA Show for this year as an obstacle or an opportunity, and we are choosing to look for the opportunity. We will aggressively lean into the fundamentals of a good marketing strategy: brand marketing, digital and transactional advertising, PR and content creation. Just like with your employees, we believe periods of uncertainty require increased communication with your customers.”

Embracing Digital Channels

For the industry as a whole, Douglas believes that the COVID-19 situation has underscored the importance of well-developed digital channels for suppliers and sellers alike.

“E-commerce has been an incredibly positive story for most in our industry in 2020, including Edelbrock and Comp Performance,” he noted. “There has been a distinct surge since early April that has benefited not only our direct-to-consumer websites but also our sales channel partners that are well positioned with great e-commerce infrastructure. Several of the large chain stores have also experienced robust point-of-sale [numbers] coming from both e-commerce and brick-and-mortar stores.”

But selling through e-channels is only part of the equation. Truly leveraging digital channels also ties back to great marketing campaigns, and Quadratec provides an excellent example.

Keeping its fingers on the pulse of its consumer audience, the company rolled out a series of DIY how-to videos and written articles covering simple Jeep maintenance and modification projects. Then, realizing that so many of its customers were dealing with kids out of school, the DIY videos evolved organically into a highly successful #HandsOnHomeSchool social-media campaign. In fact, the campaign was inspired by a Quadratec employee who was involving his kids in basic Jeep projects to help them alleviate out-of-school boredom.

“It sparked the idea that now we’ve got this DIY campaign going on [and] everybody’s home and probably going a little stir-crazy, so the #HandsOnHomeSchool campaign was really twofold,” Mondeaux said. “One was to get moms, dads and their kids working on projects together in the garage, and then secondly, the goal was to teach kids and young adults the basics of car maintenance.”

The campaign played out on Facebook and Instagram, with some email and Quadratec website support. The concept was simple: Involve your kids in a basic Jeep project, snap a photo, and post it using the #HandsOnHomeSchool hashtag. Quadratec reposted photos and created small gift cards, T-shirts and other promotional items to send to families who “attended” the home-school program.

Mondeaux said the campaign was an instant hit: “It was just phenomenal. The parents got behind it, of course. A lot of the kids saw it, and they wanted to be a part of it. We’ve had several local schools that were no longer in business here get behind it, and the teachers were behind it. It was just a really good program to encourage families.”

Following the success of its DIY videos and home-school social-media campaigns, Quadratec has now launched a Torque channel at its website, filled with Jeep-enthusiast-oriented videos and written content. The company’s leadership believes that Jeep aftermarket consumers remain hungry for streaming content tailored specifically to their passion between their Netflix and Hulu binges.

Forward Thinking

As the industry rounds the corner into 2021, both Edelbrock and Quadratec remain well positioned for upward growth, but there’s no secret or magical formula to instant success for Douglas.

“Personally, I don’t think there are any game-changing tactics that exist to guide you through this type of period,” he said. “Rather, I think it has forced businesses to rely on good business management fundamentals that should have been in motion prior to this period. We have continued to lean into modern business technology transformation—work from home, cloud infrastructure and such; extensive scenario planning; and a relentless drive for
additional efficiency.”

As a matter of financial course, he believes that companies should always be tightly managing their cost structures (including product and selling as well as general and administrative expenses) and planning for downward cycles.

“Admittedly, COVID-19 forced us to stress-test many of the [above-mentioned] projects in real time, but overall we are pleased with where we are at today,” he said. “As scary as the early days of COVID-19 were, as a business leader, you have to thrive on the challenge of dealing with adversity.”

For Quadratec, Mondeaux said inventory and keeping up with demand amid stretched supply chains is now the most pressing challenge, but he believes that if the COVID-19 pandemic has proven anything, it’s the essential nature of digital technologies and e-commerce platforms in today’s marketplace.

“It’s hard to plan for the unknown, but parts retail is an industry that is able to withstand the storm,” he said. “We were something that people could gravitate to when they were locked down, so from an e-commerce perspective, the biggest [lesson] is to completely embrace digital marketing and e-retailing. Consumers—even the ones who were used to going into a local shop—were forced to go online. I think a lot of them are going to stay online. If I worked for a small automotive parts company, I’d encourage them to get product online and put their marketing dollars more on the digital side.”

In the end, both Mondeaux and Douglas expressed their admiration for the aftermarket’s handling of an ongoing health and economic emergency.

“The overall resiliency and adaptability of our marketplace was a pleasant surprise,” Douglas said. “Almost overnight, we and the rest of the industry went from planning double-digit decrease scenarios to riding a surge of sales unlike this industry has ever experienced.”

But that, he added, harkens back to the industry’s roots.

“Our industry was founded upon figuring out the opportunity when most didn’t see the potential,” he said. “Listen to your customers, lean on proven business fundamentals, and always challenge and stress-test every aspect of your business.”

Compared with other industries, the automotive aftermarket has proven especially resilient during the COVID-19 outbreak, with many companies not only maintaining sales but also thriving. Part of that, of course, is the essential nature of automotive businesses, not to mention consumer thirst for projects to tackle during prolonged lockdowns. But those factors alone don’t guarantee growth in these unprecedented times. How companies respond to a crisis matters most, and there is much to learn from companies that are getting it right. As they see their sales climb, Edelbrock Group and Quadratec offer two case studies in current best practices.