The online shopping boom means a digital presence and an e-commerce solution is more important than ever before for OEMs and their dealerships.
E-commerce sites were instrumental in surviving the COVID-19 pandemic and remains pivotal as the world settles into a new way of doing business. This includes the automotive industry, where the parts and accessories sector has been a key targeted vertical by digital marketplaces such as Amazon, eBay Motors and other big box retailers.
That’s why it is vital for OEMs and their dealership network to have an e-commerce solution of their own to future-proof their parts business.
Consumers Today Expect a Digital Experience
- Consumers are shopping online and that’s only going to keep growing. According to Frost & Sullivan, one in 10 of all automotive parts will be bought online by 2030.
- Consumers expect an omnichannel experience, including an online store. 75% of consumers shop both online and in-store, say McKinsey. E-commerce is the most important route to market over the next two years, say 86% of surveyed business leaders.
- The demand for online parts and accessories stores exists already. And the market is huge. For firstparty and third-party parts and accessories revenue in 2021, Amazon generated US$12bn, while for eBay Motors it was US$11.7bn.
- The aftermarket is growing rapidly and stealing profits from OEMs. Frost & Sullivan predicts the global automotive aftermarket, worth US$362.21bn in 2021, will rise to US$478.8bn by 2025.
- Issues like chip shortages and supply chain problems have made the new car market shrink while the used car market has grown. It means that consumers have had to source parts to fix their used cars or have stuck with old cars that need to be repaired. Both cause average vehicle age to increase – a driving factor in parts and accessories sales.
“The global automotive aftermarket business will rise from being worth US $362.21bn in 2021 to US $478.8bn by 2025.”
Frost & Sullivan
A Genuine Advantage
While OEMs and dealerships were initially slow to address the challenges of the aftermarket industry, they have huge competitive advantages over third-party online retailers that can be leveraged by their e-commerce solutions:
- Accurate product fitment and unrivalled quality that customers can’t get elsewhere
- Expertise in manufacturing parts that third-party aftermarket companies can’t reproduce or copy
- Customer confidence and trust in knowing that genuine parts are backed by warranties
- Access to accurate OEM parts catalogue, enriched with information such as parts illustrations and photos, so customers can identify and order the correct parts
- Add-ons that the aftermarket can’t match, such as detailed parts fitment manuals and parts installation options at the dealership, which can be turned into a revenue stream
- Flexible fulfilment and delivery options, where customers can use ‘click and collect’ to pick up parts from their local dealership. OEMs can leverage their vast dealership network to provide a more local experience, on-demand deliveries and lower fulfilment and shipping costs
“Consumers expect an omnichannel experience, with 75% of consumers shopping both online and in-store.”
The Way Forward
For OEMs and dealerships to compete with tech giants such as Amazon and eBay, and truly benefit from their unique competitive advantage, it’s vital that they select the right technology partner for their e-commerce solutions. A partner should have:
- Intuitive, customer-friendly e-commerce technology that’s fast and easy to set up
- Great understanding of modern consumer behaviour and sales psychology
- In-depth experience in the collation and enhancement of complex product data
- Expertise in SEO and SEM to drive traffic to an OEM or dealership’s online store
- In-house business consultative services to help OEM and dealership partners reach business objectives
“OEMs and dealerships that provide an omnichannel presence, including an online store, will be well positioned for the years ahead.”
Additionally, these qualities will help OEMs and dealerships launch a holistic, direct-to-consumer e-commerce site that will future-proof their parts and accessories business and offer great opportunities:
- Renew your relationship with your customers by getting them back into your dealerships
- Scale your e-commerce platform in a cost-effective way and avoid sales going to marketplace solutions (which accounts for as much as 12% of all sales)
- Full ownership and visibility of the entire process of selling parts and accessories
- A new sales channel that increases parts and accessories sales – one that is comparatively more cost-effective than a marketplace race-to-the bottom solution
- Additional touchpoints to gain new customers, regain lost customers and retain current ones
- Ownership of the customer by having a direct relationship with them
- A consistent and unified brand experience to help promote brand loyalty
- Acquire vital first-party data to grow the parts and accessories business further and own crucial product data and intellectual property
However, given the rapid pace of the e-commerce space and its complexities, these opportunities can’t afford to be delayed. OEMs and dealerships that provide an omnichannel presence, including an online store, will be well positioned for the years ahead by partnering with a vendor who is already analysing and preparing for the e-commerce market of tomorrow.
But they need to act now. The right vendor will be looking and adapting to the future needs, and not just finding a quick-fix solution. Rapidly changing consumer behaviour and an evolving digital world require ongoing development to stay ahead of the competition.
DOWNLOAD THE WHITEPAPER HERE and learn how a holistic e-commerce solution can future-proof your parts and accessories business and face down the challenge of aftermarket parts providers.
