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ARE CLASSIC OILS A GOLDEN OPPORTUNITY?

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ARE CLASSIC OILS A GOLDEN OPPORTUNITY?


There is growth in the classic oil market, but it is an overcrowded area

i-Sint formulation

Buying oil is an ever more complex process for modern vehicles, so don’t you just long for the days when there was a choice of about three?

Well, there is a section of the market that caters just for classic cars (and by ‘classic’, we mean anything from the straight weight oils of the veteran and vintage eras, right up to the high-detergent multigrades used in the late 1990s). Oddly, as demand for volume of older oil grades such as 10w40 decreases, the number of brands available has actually increased. It is also one of the few areas in the lubes market where a high percentage of sales go to DIYers rather than to the trade, so retail visibility is important.

Old brands, long out of circulation have been revived during the year just passed, notably Veedol and Duckhams. The latter being produced under new ownership as a private consortium bought the brand from BP, though at the time of writing, the only way to get your hands on a can is to mail order it from the brand’s website.

Traditional brands have got a lot of cache among older motorists, but a name isn’t the only reason that consumers would choose one brand over another. Indeed, there is plenty to suggest that the market for this type of product is oversupplied.“The temptation is to think there’s always room for one more brand, but there have been some spectacular failures in recent years where people have assumed they can carve a niche and found that it’s much harder than they thought” said Guy Lachlan, a Director of Bicester-based retailer Classic Oils.“Kroon Oils was one that didn’t work in the UK, and the Shell X100 brand tried to come back but hasn’t really made the leap into the mainstream yet.”

TOUGH OLD TIMER
Others concur that the old-timer segment is tough to crack. “The classic market all told is relatively small, so we are noticing a degree of increased competition, oversupply and also margin squeeze” said Tony Lowe, Sales Director at Brighouse-based Millers Oils. Interestingly, both Millers and Classic Oils have found a significant market for direct sales via the internet, something that would have seemed unlikely even a few years ago. “Online is the big driver for this range,” said Lowe. “Our own web shop via the Millers website has been key in driving sales forward.”

Penrite oil

However, the assurance of modern quality also goes a long way according to Adam Young, a Field Sales rep for lube supplier MotoWorld which imports ENI and Agip into the UK, both long- standing brands featuring the fire- breathing six- legged dog. “The oil market in general, is very crowded, but Penrite oil we believe there is a space for ENI” he said. “The products are fully certified to the latest ACEA, API and JASO and manufacturer standards so consumers can be certain they’re receiving the best quality possible from our oils.” As you might expect, all of the suppliers that we spoke to said that the message of quality was something that any consumer working on their pride and joy would take to heart, however other aspects of the marketing message differed. Millers’ Lowe said that the ‘Made in Britain’ tag was important to its customers, while Classic Oils’ Lachlan makes the point that it is easier for brands that were originally mentioned in the handbook, which must be good news for the likes of Castrol.

RETAIL IS DETAIL
When selling directly to consumers, ‘retail is detail’ as the old saying goes. However, how much difference does retro- styled packaging really make? “Packaging does have an effect on retail sales as the product has to firstly catch the consumers eye if they are unfamiliar with the brand” said Young.

Putting oil into traditional metal tins and using a design based on a 1950s logo has certainly paid off for Millers. “Since rebranding, sales of the Millers Classic range have enjoyed double digit growth in terms of revenue” Tony Lowe confirmed.

Conversely, Lachlan makes the point that product recollection is extremely important. “People tend to be looking for a familiar design rather than a ‘good’ one” he said. “We have seen clever rebrandings actually damage sales because customers don’t recognise it as being the same as their trusted product.”

Posted in CAT Features, Factor & Supplier News, Garage News, News, Retailer NewsComments (0)

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