E-Commerce Trends: Automotive
Both in the United States and globally, the adaptation of e-commerce platforms for the sales and distribution of auto parts has proven to be a trend that is taking hold in the automotive industry. This trend of market growth is projected to continue alongside the uptake of e-commerce platforms by manufacturers on their own websites, as well as the integration of the digital into the purchasing of parts and services from physical stores or service providers.
Online Auto Parts Market Growth
- The U.S. market for purchasing auto parts online has been growing over the past five years, with this growth projected to continue. Since 2014, the e-commerce industry has grown annually at a rate of 8.9%, reaching $5.5 billion as of April 2019.
- Industry growth is a result of increased car sales, which in turn has increased the need for parts by consumers who either do repairs themselves or bring parts to mechanics. Additionally, the increase in online shopping in general and greater connectivity over the past five years has led to an increase in consumers turning to e-commerce for auto parts.
- Major players in the industry are O'Reilly Automotive Inc., Advance Auto Parts Inc., and Autozone Inc.
- The importance of an omnichannel approach (reaching consumers through various retail channels such as physical, online, mobile applications, etc.) cannot be undermined for the growth of companies selling auto parts.
Buying Parts Directly from the Manufacturer
- Consumers are now able to buy auto parts online directly from the manufacturer, without having to go through an e-commerce platform. Many well-known auto parts manufacturers are beginning to adopt online strategies in an effort to remain competitive.
- When it comes to auto parts, 9 out of 10 consumers are driven to do extensive research prior to purchasing because they must be certain that the parts will work with their vehicle. Manufacturers' websites can provide detailed information about parts that consumers need, providing the perfect platform for information and purchasing. 57% of auto parts consumers doing research online look at the manufacturer's website.
- WeatherTech Direct LLC, a manufacturer producing parts for various aspects of protection, is one such company that sells their products from their website. Not only does WeatherTech provide detailed information about their manufacturing process and each part, but they also suggest specific values of each part to the consumer, such as helping to increase car resale value.
- Holley Performance Products is another example of an auto parts manufacturer selling directly to consumers online. In addition to providing technical information about their auto parts, Holley also provides video tutorials which demonstrate how to install their parts.
'Click' and Mortar
- Although e-commerce represents a growing distribution channel for auto parts, the need for service providers and brick-and-mortar locations for retailers is not likely to go away due to consumers needing assistance with information or the installation of parts. As mentioned in a news article from Inbound Logistics, a report on digital transformation of the auto parts aftermarket emphasizes the importance of integrating the digital realm with the brick-and-mortar realm.
- The ability to search for and purchase parts online, and then pick them up in-store is attracting consumers for whom immediate need is a key concern. Because many purchases are made when a vehicle needs repairing, the ability to quickly attain parts is important. In 2018, 'click' and mortar accounted for 40% of e-commerce sales.
- Mobile-friendly purchases are another key aspect of this trend, enabling consumers to search for parts, find a retailer and discover important information such as driving directions or the retailer's phone number.
- FRAM, an oil filter brand and manufacturer, is one such company that has implemented mobile-friendly option for finding retailers as well as purchasing online through Amazon, Autozone and other retailers.
- Amazon has also begun to combine digital purchases with services offered offline. The purchase of certain auto parts allow for an option to book in-person services.