What is up with the automotive aftermarket industry?
It cannot be denied that people in the automotive aftermarket industry who have shifted their focus to online parts sales have been celebrating their triumph in business for a series of consecutive years now. The shift of today’s technological advances has seen changes in the preferences of the consumers of automotive replacement parts and accessories. Most consumers have realized that in the advent and the overwhelming revolution of the internet, finding a solution to their anxieties in replacing their worn or broken automotive parts and answering their personal needs of security and convenience for accessories can be best carried out online; just a few clicks away and they have quick and outstanding choices. This is the reason why both traditional automotive aftermarket vendors and some hopeful business entrepreneurs are going down the online selling route. The trend has been breaking records and barriers and is not expected to stop any time soon.
The empowering statistics and records
Using various methodologies and reviewing extensive studies, wide-ranging research and multiple analyses and models, the digital agency Hedges and Companyhas developed a compilation of statistics of the online sales of automotive industry parts and accessories. The thorough study behind the statistics only considered new and remanufactured parts and accessories. It did not include the sales reports generated by those who sell used parts or those who operate auction sites for these products like eBay Motors. Those products sold on online marketplaces such as Sears and Newegg are also not included. The exclusion of these sources of online sales was done to do away with double-counting or adding of figures to the statistics that are already included in some items. Used parts and those items purchased through marketplaces may have already been incorporated in the figures of yearly sales after their first purchase.
Despite eliminating few sources of revenue figures, the online sales of automotive parts and accessories broke the $5 billion mark in 2014. It was the first time that the annual increase got near $1 billion. The same is projected moving forward and everyone is certain about it, 2015 will break the $6 billion mark, an all-time high for this trend in the industry. The increase in 2015 is over 17% of the previous year’s figures and according to the projection, the trend will continue on with the growth rate of between 14%-18% per annum. To quantify the rates using estimate figures, this just means that from hereon, sales of these parts and accessories generated online will keep increasing with at least a billion dollars every year. Even those people who are behind the study have been surprised with how their expectations of the trend keep being surpassed by the movement of the market.
The gap between online sale and street-side retailers
While the brick-and-mortar aftermarket vendors have seen decline in the DIY or “do-it-yourself” segment of the industry, it is just logical that many retail chain stores have jumped into the DIFM or “do-it-for-me” bandwagon. This must have been caused by the overwhelming increase in annual sales of online retailers of the automotive parts and accessories. People no longer go to street-side stores and talk with the sellers of retail chains of aftermarket products face to face. Most of them just shop virtually and spend time going over the specifications that they look for in a certain product.
It goes without saying that the enormous growth of online sales has created a very wide gap between the sale increases of its traditional brick & mortar store competitors. If the growth of e-sales of parts and accessories has been moving in a fast pace, the figures for the increase in sales of their brick-and-mortar counterparts could barely make a change of 1% for a given year. This has been the reason why many people in the traditional retail business of automotive parts have been considerably planning their strategies to delve into the online world of selling their products. Some people as well who are called “pure players”, or those whose automotive aftermarket businesses are either not yet established or were still nonexistent during the pre-internet era, have plans to go directly to the e-retailing route. The industry behavior waiting to be experienced by these hopeful people sounds very promising, that is why every entrepreneur would be enticed to conform or make a change.
Explaining the evolution of automotive aftermarket customer behavior
There are numerous factors that drive the hype of the buyers who go online and check for automotive parts and accessories for their repairs. One of these is associated with the evolution of technology itself, a reality that has greatly affected how people define convenience. Two types of online buyers come to mind in this paradigm– those “buyers for enhancement” and those “buyers for upkeep”. The buyers for enhancement are people who cannot get to sleep unless they know the most innovative and cutting-edge specifications for their automotive accessories to date. They are those people who spend a lot of time reading articles, researching for new upgrades and counting on customer ratings relative to the products that they are concerned with adding to their vehicles. Knowing how advanced these people are, they would spend days on the website reviewing an online store eyeing multiple prospects of products that they are itching to buy. Most of the time, after an exhaustive screening process, they end up buying the product that they have plans to leave 5-star reviews with.
On the other hand, the “buyers for upkeep” are those people in the older age brackets who would want to spend little time to choose accessories and parts for their automotive assets that need attention. They are those people who would go online in the morning and pick whatever it is that they see very promising in the afternoon. These people are those who would rather stay at home and use their computers, clicking on those images of the products they desire than to drive to the nearest automotive retail store even if it is just 10 minutes away from home. These are those people who would heavily rely on customer support of online retail chains should they find any concern with the products that were delivered straight to their doors.
Social media platforms have also played a major role in influencing the online buying habits of the automotive aftermarket consumers. Most people who have bought products using the internet go through the process of every normal online purchase, from picking the product on a webpage, inputting their credit card or personal information on the site, agreeing to the shipment terms and eventually to receiving and trying the product themselves. Whether the product is stellar or worth-returning to the e-retailer, you can almost always expect that they will post all their reviews and ratings online especially on their social media accounts. Friends, family and peers who read on the internet about the reactions of those online buyers will most likely remember what the posts are about. They would soon try to check some online stores themselves and experience the same process.
Since the internet is growing exponentially as days go by, people acquire more perspectives and take more factors into account whenever they venture or decide on something. The same is true when it comes to the online buying attitude of customers. They would have a wider source of information and comparisons using their online devices. They have a source that keeps growing and becomes more sophisticated by the minute.
Transitioning to and keeping up with your own online store
Whether you are already on the online platform of selling automotive parts and accessories or you are still planning to transition into it, making the business thrive requires a lot of things that should be carefully looked into. You should think if it is cost-effective to be at the business given your current state in the industry or given your resources to deal with it. You should think about the marketing and development strategies that would be required to maintain the business. You need to evaluate what your strategic and marketing advantages are or reassess where you stand in the industry if you think that your market is already too concentrated.
Just like any business out there, the best way to triumph in an industry like this is to make sure that you are very adaptable to change, you are a step ahead of any innovation, and you always put your customers’ interests first on top of it all. Different customers have varying needs and requirements. Always be sure that you know who your customers are and what they want. No matter how prosperous a business may get in the short run, if their connection to their clients is lost, no record and barrier-breaking statistics can help them stay in the game. The towering figures on online sales for automotive parts and industry are end-products of customer-centered individuals who would always align their business goals and objectives with those of the people that they serve.
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