David Meniane: Hi, guys. Thanks for taking my questions. Yes, of course. And it’s David, Darren. So I think for us, app is probably one of the most transformational initiative that we worked on over the last couple of years. Historically, the majority of our customers find us on Google. And so we rely heavily on search engine optimization and performance marketing on Google. And so over time, what we’re trying to do is get our customers to come to CarParts.com directly so that we don’t have to spend this much money on Google or performance marketing. So having that direct connection, the direct line with our customer, that’s the game-changing part where we don’t have to reacquire them when they want to make a purchase. So today, about 80% of our traffic is already on mobile.
What we’re trying to do is get that mobile traffic to go from searching on Google to directly on the app. So repeat purchase, push notifications, maintenance, VIP subscription, like everything we can do to move away from search engine into direct marketing that has a huge impact on the P&L. And I think over time, what you’ll see is our marketing spend should come down probably somewhere between 100 and 200 basis points, and that should flow to the bottom line.
Darren Aftahi: That’s helpful. And then just one more on this new Vegas facility. The $7 million in CapEx, I guess, how is that going to hit the balance sheet and cash flow statement? And then Mike, I think you talked about cost reduction as a result of moving facilities. Can you just kind of dive into that a little bit more?
Ryan Lockwood: Sure. This is Ryan. I’ll take the first part of the question. That $7 million is going to basically be almost all CapEx. You may have a little bit run through OpEx as we get that facility set up, but the majority of it is going to racks, conveyance, order pickers and hard items, so you’ll see that in the cash flow statement, not running through OpEx.
Michael Huffaker: Yes. Darren, on the lower costs, so we’re down around 60 basis points year-over-year with our current process improvement. Vegas with the pic module and other capabilities we’re putting in will allow us over the long term to lower our cost profile within that building. And we’ll continue to make improvements throughout the rest of the network as we have.
Darren Aftahi: Great. Ryan, could you guys clarify the $7 million wins that are actually going to hit the P&L or hit the balance sheet and the cash flow statement?
Ryan Lockwood: It depends. We actually just approved the invoices for some of this literally today before we took this call. So I think you might see a small amount hit this year and the majority of the remainder hit Q1.
Darren Aftahi: Okay. Great. Thank you.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Tom Forte from D.A. Davidson.
Unidentified Analyst: Hi. Good afternoon. This is [Sharon G.] on for Tom. I had two questions. For the first one, how, if at all, are you guys impacted by the automotive labor strikes? Like, for example, we would think the production disruption would result in consumers holding on to their used cars which should be a positive for you?
David Meniane: Yes. I mean in short term, probably very little impact. But long term, yes, I agree with you. I think — and not to get political, but if you’re going to raise the cost of labor, I expect new car prices to go up. So if you combine new car prices to go up as well as the cost of capital with interest rates being as high as they are today, I think it’s going to make it more difficult for American consumers to buy a new car, and there’s going to be an incentive for them to hold on to their vehicle longer. And this is where a company like CarParts.com becomes a good destination to maintain your car, keep it running longer, both for upgrades, but also replacement. So long term, I think it should be an opportunity for us to capture more customers.
