Trends in E-Commerce

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Part
01

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.



Part
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Part
02

E-Commerce Trends: Consumer Electronics

Social commerce, smart homes, and personalization are some trends in consumer electronics e-commerce. Leading brands such as Samsung, LG, and GoPro are incorporating in-app checkouts, IoT technology, and a personalized customer experience. This research presents an in-depth analysis of these trends.

Social Commerce on Instagram and Facebook

Smart Homes

Personalization

  • Consumers are increasingly keen to interact with brands that present personalized information. Millennials and Generation Zers expect brands to be authentic.
  • According to recent research, 80% of customers are more likely to purchase a product if they offer personalized experiences.
  • Additionally, 63% of customers would stay clear of brands that do not customize their messaging/experience.
  • Both online and brick-and-mortar stores have taken the customer experience into account.
  • Brands such as Samsung is attempting to use the mobile-first approach and implementing omnichannel shopping. SkullCandy utilizes technology to optimize and personalize the audio experience.

Increase in Revenue

Sources
Sources

From Part 01
Quotes
  • "By 2022, U.S. online sales of auto parts and accessories will reach $19 billion, and digitally influenced sales will grow to $162.4 billion, Hedges & Co. projects."
  • "Online sales and digital influence in the sector are growing because consumers are becoming more comfortable buying auto parts online and auto parts retailers are getting better at ecommerce, offering a better online experience than in past years, Hedges says."
  • "Also, a growing number of auto parts and accessories manufacturers now sell directly to consumers on their websites. Those include well-known brands such as Edelbrock LLC, Flowmaster Mufflers, Holley Performance Products, WeatherTech Direct LLC (No. 940 in the Top 1000) and Westin Automotive Inc. "
  • "“Consumers in the automotive aftermarket tend to be research-obsessed,” he says. That’s because a consumer repairing or restoring a car must know for sure that a part will fit. Otherwise, the purchase represents wasted time, even if the buyer can return the product for a refund. "
  • "Roughly nine out of 10 consumers do some form of research online before they purchase an auto part or accessory, says Hedges & Co. Consumers conduct online research even when they eventually buy at a store. "
Quotes
  • "Our FloorLiners help protect resale value too! Simply put, the cost of owning a vehicle is the difference between what you pay for it and what you sell it for. There are many factors that influence resale value; miles, exterior condition, maintenance history and of course interior condition. The FloorLiner is proudly designed, engineered and manufactured with American made tooling in the USA."
Quotes
  • "Over the five years to 2019, revenue for the Online Automotive Parts & Accessories Sales industry has experienced strong growth. As more and more consumers opted to use online retailers as opposed to visiting physical stores, industry revenue is expected to have increased an annualized 8.9% to $5.5 billion. This includes an expected 6.4% rise in 2019 alone."
  • "Customers of the industry, whether they buy the parts to attempt to fix their vehicles themselves, or to give it to a mechanic to the job have been growing throughout the period. This is due to the fact that new car sales and total vehicle production has grown, aiding revenue growth."
  • "Despite this low concentration, O'Reilly Automotive Inc. (O'Reilly), Advance Auto Parts Inc., and the online branch of AutoZone Inc. all represent major players in this industry. Another large player in the industry is US Auto Parts Network Inc. Products offered by these players include; replacement parts, performance parts, maintenance parts and accessories."
Quotes
  • "Based on purchase frequency, consumers are most attracted to “click and mortar,” or traditional retailers with an online presence, which allows them to buy online and pick up in store. This is a popular option, as it captures 40 percent share of e-commerce sales."
Quotes
  • "de Visser also says that mobile ordering will be a major part of the ordering process going forward, although this is trickier with the automotive industry because of the complexity of parts ordering. De Visser says this is because many shop owners don’t always know the specific part they’re looking for, so on a computer, it’s easier to find specific information about the parts and see their options."
  • "With its new remodel, FRAM says its website is much more mobile friendly, that makes searching for compatible parts and connecting to a retailer much more streamlined and legible. The company made it so that, when looking for a part, users can get directions to the closest retailer and dial a phone number directly from their mobile devices, directly from the FRAM website."
Quotes
  • ""A new retail aftermarket is emerging, characterized by a strong integration between the online and the offline worlds, differentiated customer experience, and lower cost-to-serve and working capital requirements," states the report."
  • "To address the many consumers that need assistance, some online marketplaces, including Amazon, allow customers to select a service option when purchasing some car parts. Their purchases are delivered to service providers near them, who then handle installation. "