Jiffy Lube’s Patrick Southwick Talks Innovation and Evolution of the Industry
Just under a year ago, Patrick Southwick was appointed president of Jiffy Lube International, Inc., a wholly-owned indirect subsidiary of Shell Oil Company. The timing of this appointment came just as the company was set to celebrate four decades in business.
For people, 40 is when one could be “middle-aged,” even if young at heart, but in the business world, 40 is a remarkable milestone. Jiffy Lube’s longevity has come about by making a task that had required an appointment with a time commitment into something that could be done while running errands.
It began much like so many other pioneering American companies — it sought to fill a void where a service was lacking and offered a real solution to an existing problem. Had the company come about a decade earlier, it might have been too soon; while a decade later, its time might have passed.
It goes back to 1979 when Jiffy Lube International was established in Baltimore, Maryland, by W. James Hindman, who had bought out several franchises and led the company to what it would become today. Now with Southwick at its helm, the company is looking ahead at the next 40 years. Southwick said he is doing so by noting the changes in not only the automotive maintenance industry, but also in the greater automotive world.
“If you look back over the past five to 10 years, there have been a number of changes that have taken place,” Southwick said.
Southwick mentioned that the supply-side of the industry is evolving, and he said it is in part to “tangential businesses” — those focused more on tires and basic repairs have been moving into the oil change business.
“That is a bit of a challenge, which is causing a bit more competition,” Southwick said. “The pace of change is coming a little faster, and that pace of change will continue to escalate. One of the biggest changes that has hit us already is the consumer base. The demographic composition, the expectation of consumers, how you engage potential consumers and how you deliver the experience they want.”
The Big 4-0As the new president of Jiffy Lube International, Southwick is responsible for the strategic direction of the automotive service provider. This includes the management and growth of the 2,000-plus independently owned and operated Jiffy Lube service centers across the United States and Canada.
While Southwick has worked at Shell for 15 years in various strategic and operational roles in North America and abroad, he is quick to point out that he isn’t exactly an “industry veteran” in the traditional sense.
“I wouldn’t call myself a veteran,” Southwick explained. Instead, he could be seen as an innovator who will address the challenges the company and industry face in the coming years. “We have 40 years in the business, and we’ve been successful because we have a winning business model. We have a winning brand, and we have some of the best franchisees in the industry.”
When you look back at Jiffy Lube, you can see how it revolutionized oil changes with a ground-breaking business model — one that changed how consumers maintained their vehicles.
“For 40 years, Jiffy Lube has stayed on top of the industry and helped shape the industry, as well,” Southwick said. “Innovation has been the core of our success. Going forward, we’re going to focus on innovation and our business model, as well as how we engage with the consumer and how we drive the right customer experience.”
Jiffy Lube’s past success has been because of the teamwork from the corporate level to each and every franchisee. Southwick credits their franchisees and the relationship they have together.
“Jiffy Lube wants to create an environment where the franchisee and franchisor are working together to win in the market,” he said. “We have great franchisees, and they are the face of the brand. At the end of the day, they are the ones on the ground, delivering the service to the customer that makes our brand what it is. Our franchisees have been critical to the success we had over the last 40 years, and they’ll be an integral part of our success over the next 40 years.”
Sustaining Growth in a Crowded IndustryIf there is a problem with being on top, it is often there is no place to go but down. Yet, Southwick said that realizing this is just part of ensuring that you do stay on top. That includes addressing competition.
“It is fair to say that when you are No. 1, the rest of the industry is looking at ways to catch you and beat you — and that comes with the territory,” he said. “Our response to that is to continue to evolve and innovate to maintain our leadership position. We have a strategy to do that, and we are confident with this strategy.”
Jiffy Lube’s strategy includes serious investment and commitment toward growth through new stores and locations. Jiffy Lube recently announced it has set up a fully owned subsidiary and raised a substantial amount of capital to build new stores. Jiffy Lube’s current target is to have 250 new stores open by the end of 2023.
“That growth is set to come from new builds, franchisee growth and some new opportunities that we are putting in place to see our network grow,” Southwick said. “This is about evolving our network both where we are and in the quality of the network. The capital comes from the confidence in the business model that we’ve put in place.”
The Changing Auto IndustryOne reason for Jiffy Lube’s enduring success has been its ability to keep up with changing vehicles — whether it was economy vehicles in its early days coming out of the Middle East oil embargo or the spike in fuel prices in 2008 to the increased demand for SUVs and pickup trucks.
“The vehicles are certainly different when you go back the 40 years we’ve been in business,” Southwick said candidly. “This is the key point — an interesting point — because we often talk in the industry about how the fleet is changing. But, the conversation tends to be on electric and hybrid vehicles. However, the current impact on the fleet is more around trucks and SUVs. This creates challenges for everyone in the industry, that’s for sure, but some of it is simply an infrastructure issue.”
The infrastructure issue is an important one, because today’s “soccer mom” is more likely to be driving a large SUV than a minivan, while white-collar executives are as likely to be commuting to work in a Ford-150 as a BMW sedan. The move toward bigger vehicles on the road is also affecting the space on the shop floor.
“If you look at the vehicles coming in, the space you need to accommodate these vehicles is a bit different, and it could be something as simple as a lift,” Southwick said. “It used to be that there were lifts at some stores that couldn’t accommodate some of the heavier vehicles that are on the road. These are all challenges.”
Inventory complexity is another challenge, added Southwick, who explained, “Now the number of parts you have to carry, the tires you have to carry and the oil inventory — this makes up a complexity that you need to have if you want to service those vehicles.
“As a supplier, you have to think about the marriage as you manage that inventory complexity. That comes down to finding ways of being more efficient, so you can manage your margins as a service provider.”
The CAFE DebateThe industry has been watching the latest developments of the Corporate Average Fuel Economy (CAFE) standards — which were first enacted in 1975 after the Arab oil embargo to improve the fuel economies of cars and light trucks produced for sale in the Unites States.
“There is a lot of debate around the CAFE standards, and now there are not only CAFE standards but also state regulations,” Southwick said.
Today, there are more than 208 million vehicles on the road, and the average age of those vehicles is about 12 years. This presents a tremendous opportunity for Jiffy Lube, and the industry as a whole, to service those vehicles.
“Long-term, OEMs will build the vehicles that consumers want; and it is up to us — the service provider — to provide services to maintain those vehicles,” Southwick said. “CAFE has been increasing, but it is up to us to continue to evolve and meet the needs of consumers for the cars they drive.”
Higher Tech Vehicles and a Higher Tech IndustryWhile electric — and even hybrid — vehicles are still a ways down the road for most consumers, there is another challenge that the industry needs to consider, Southwick said. It is the increasingly complex vehicles that roll into our bays. Today, vehicles are, basically, computers on wheels. And vehicle technology will only advance, adding increased complexity.
“I do expect the complexity to increase over time. I don’t see that changing,” Southwick said. “Yes, that complexity is there. It does present some challenges, but it also presents some opportunities — there will be different service needs for some of these vehicles. There are core underlying needs that will remain, no matter what the vehicle’s powertrain is. Tires are going to be there forever, and I don’t see that changing.
“Vehicles are lasting longer, and wear maintenance is now more important than ever — more than it was in the past.”
The automotive maintenance industry should now see itself as an extension of the tech world.
“This is spot on,” Southwick said. “It is true in every industry, certainly ours, and we’re seeing it in a variety of ways. When you look at it, the timing of the implementation of technology might vary, but the impact is imminent. It is going to affect everyone. Obviously, we have to see how technology impacts vehicles. But we have to look at the role that technology plays on the consumer side of the equation, as well.”
Technology plays an important role across the spectrum of customer interaction. This includes customer awareness, customer engagement, customer experience and customer attention. Better technology also means that customers are more informed than ever before. Thus, the industry needs to hold itself to a higher standard to satisfy this better-educated customer.
“Consumers will continue to demand new products and services that will meet their expectations from a single-source maintenance provider,” Southwick said. “But, I also think today’s consumer is a combination of two different types of consumers we talk about in the automotive aftermarket space.”
Traditionally, we have seen do-it-yourself (DIY) customers and do-it-for-me (DIFM) customers. However, today, DIFM customers are better educated and better prepared when they bring their vehicles in for service.
“Having your connection to the consumer and providing transparency in the service process is a lot more important,” Southwick said. “This is an area where technology will have a big impact. There are a lot of ways we can use technology for in-store operating efficiency to help bring down costs, but it is critical in how we engage with consumers.”
The Next 40 Years For Jiffy LubeWith the first four decades in the rearview mirror, Jiffy Lube could now be living up to the mantra of the old bumper stickers that said, “Life begins at 50.” As long as Jiffy Lube remains under Southwick’s leadership, growth and innovation are on the agenda to help the company continue to build a desirable customer experience.
“Our pace of innovation will continue to accelerate,” Southwick said. “We already launched our new business model, Jiffy Lube Multicare, which extended our services to brakes and tires. This will have a big impact on the part we play in the industry.”
While the company has already seen a good adoption of this program, this year it will begin an advertising campaign to spread the word.
“We feel good about the business model,” Southwick said. “So much so that we’re investing in ourselves to make it a bit more prominent in the market.”
One thing is for certain, over the next 40 years, you can expect Jiffy Lube to continue to be an innovator and market leader — wherever this industry may go.
Getting to Know Patrick SouthwickIn his 15 years at the Shell Oil Company, Patrick Southwick — who holds a master’s degree in business administration from Penn State’s Smeal College of Business and a bachelor’s degree in business administration from the University of Massachusetts at Amherst (Isenberg School of Management) — wore a few different hats. He served as global marketing manager for indirect markets, regional sales manager and as a consultant within Shell’s U.S. strategy and portfolio and global strategy and portfolio organizations.
But at the heart of it he is a self-confessed “car guy.”
“The one that I’d love to own, I don’t own yet — and I don’t know if I’ll ever be able to afford it: a 1965 AC Cobra 427,” Southwick said. “I’m definitely a car guy. I had an uncle who restored a Shelby when I was young and that was my introduction to the muscle car, which was a pretty unique opportunity.”
Southwick’s dream machine may not be parked in his garage yet, but he has owned some other notable vehicles that “car guys” must respect.
“I had an older Porsche 911 (an air-cooled one), and I wish I still had one,” Southwick admitted.
What is in his budget is taking time with his father to hit the links — and in places a bit more exotic than the Memorial Park Golf Course or Wildcat Golf Club in Houston.
“I like golfing in Northern Europe, including England, Ireland and Scotland. I go over once a year with my father,” Southwick said. “I’ve golfed most of my life, and while I’m not a great golfer, I’m pretty avid about it.”
The rest of his free time is spent with his wife and daughters — the younger of the two is now picking up another game from the British Isles: rugby.
And always one to be thinking about innovation and trying something new, Southwick said he picked up another sport that requires some travel.
“I like to surf, and, unfortunately, I can’t do that in Houston,” Southwick said.