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Online spare parts sales; e-commerce a new business opportunity for the Aftermarket
Dino Collazzo
More and more car owners are buying aftermarket components, such as accessories and tires, online and at competitive prices. A growing business which is likely to erode the revenues of many workshops and specialized dealers forced now to invest in e-commerce, where end-users are attracted by: low costs and detailed product information.
As maintenance costs keep growing motorists are forced to look at the web to find spare parts at competitive prices. Online, bargain opportunities are just a click away, but moving in this vast “ocean” of offers poses the risk, especially for those who are inexperienced, of striking a bad deal. In our country, 14 million people bought auto parts online in 2015 alone. This growing figure will prompt more and more repair shops and spare parts dealers to shift their business interests towards the e-commerce world. The aim is to intercept, on the one hand, the growing demand over the Internet, while guaranteeing, on the other, the certainty of buying products – whether original or compatible - suitable for their vehicles. The aftermarket sector in Italy is worth 12.6 billion euro. A huge business shared between Independent aftermarket manufacturers (IAM) - managing about 70% of the distribution - and Oes channel (Original equipment services) operators. A business that has started to stimulate the appetites of many car manufacturers as well, with their OEMs, ready to sit at a table they have so far only glanced at from a distance.
Online auto parts sales
Analyzing the aftermarket’s online sales it is quite evident how, according to a study carried out by Ipsos on behalf of eBay, web shoppers in Italy, France, Germany, United Kingdom and Spain are increasingly loyal to e-Commerce for their choices of auto parts. Moved by the prospect of saving around 20%, on average, on purchase prices, many opt for DIY methods rather than turning to specialized repairers and authorized dealers. In fact, 70% of the sample interviewed stated that surfing online provides the opportunity to find lower prices than those charged by official networks or traditional spare parts retailers. The best sellers are wipers, light bulbs, batteries, mirrors and spark plugs along with tires that, according to the research, with about 17 units sold per hour, on average, are now among the best selling items online. The growing online sales volumes of spare parts and accessories poses a question about the hidden dangers of the web, especially for inexperienced consumers.
Dangers that, according to specialized aftermarket trade associations and information sites, go from purchasing faulty or ill-suited component for a specific car or motorbike to downright spare parts forgery. The problem here is that, besides the bad deal per se, a motorist might incur additional repair expenses in case one of these parts should cause any damage. The best suggestion is, therefore, to contact an expert anyway. On the other hand, thinking that these reasons alone will be sufficient to convince customers to go back to purchasing exclusively in garages and retail stores is mere wishful thinking. E-commerce platforms are developing faster and faster, and when you consider that users, thanks to the web, have a wide range of products and services to chose from, combined with the advantages of saving time and money, the traditional retail store could hardly be the only choice. Therefore, in the “Workshop 4.0” era, shifting part of the business online appears to be the best strategy in order to maximize profits. Revenues coming not only by the number of parts sold online at affordable prices, but also by the quality of the information they can provide on their websites about the different features and specs of the articles so as to direct the consumer toward the best choice. In fact, still according to Ipsos, an additional factor pushing customers to increasingly rely on e-commerce channels is the opportunity to compare products of different brands, with the help of precious reviews.
E-Commerce as an opportunity for the aftermarket
Compared to other business areas where e-Commerce is literally crushing traditional retail channels, things are slightly different in the automotive aftermarket. In fact, in this case a motorist, once bought a spare part, will still need an expert who knows how to assemble it, which means he still needs a workshop to go to. The web, therefore, must be viewed as an opportunity to increase earnings since transactions are now increasingly made via computer. Frost & Sullivan too admit that, online trading will weigh more heavily in the future, with a compound annual growth rate ranging between 10 to 15% in Western Europe and 15 to 30% in the Eastern part of the continent. In the quest of grabbing the lion's share of the aftermarket sector, a pie worth 440 billion Euro, according to GiPa Italia, with the potential to reach 640 billion by 2020, both IAMs and OEMs are playing their cards. The former through investments in innovation and training, given the rapid technological changes in the automotive sector. OEMs, instead, must focus on providing greater value to the end users borrowing some of the key features of the independent market: quicker service without the need for an appointment, a greater presence online and the transformation of single brand dealerships in workshops able to accept vehicles of different brands.
Online auto parts sales
Analyzing the aftermarket’s online sales it is quite evident how, according to a study carried out by Ipsos on behalf of eBay, web shoppers in Italy, France, Germany, United Kingdom and Spain are increasingly loyal to e-Commerce for their choices of auto parts. Moved by the prospect of saving around 20%, on average, on purchase prices, many opt for DIY methods rather than turning to specialized repairers and authorized dealers. In fact, 70% of the sample interviewed stated that surfing online provides the opportunity to find lower prices than those charged by official networks or traditional spare parts retailers. The best sellers are wipers, light bulbs, batteries, mirrors and spark plugs along with tires that, according to the research, with about 17 units sold per hour, on average, are now among the best selling items online. The growing online sales volumes of spare parts and accessories poses a question about the hidden dangers of the web, especially for inexperienced consumers.
Dangers that, according to specialized aftermarket trade associations and information sites, go from purchasing faulty or ill-suited component for a specific car or motorbike to downright spare parts forgery. The problem here is that, besides the bad deal per se, a motorist might incur additional repair expenses in case one of these parts should cause any damage. The best suggestion is, therefore, to contact an expert anyway. On the other hand, thinking that these reasons alone will be sufficient to convince customers to go back to purchasing exclusively in garages and retail stores is mere wishful thinking. E-commerce platforms are developing faster and faster, and when you consider that users, thanks to the web, have a wide range of products and services to chose from, combined with the advantages of saving time and money, the traditional retail store could hardly be the only choice. Therefore, in the “Workshop 4.0” era, shifting part of the business online appears to be the best strategy in order to maximize profits. Revenues coming not only by the number of parts sold online at affordable prices, but also by the quality of the information they can provide on their websites about the different features and specs of the articles so as to direct the consumer toward the best choice. In fact, still according to Ipsos, an additional factor pushing customers to increasingly rely on e-commerce channels is the opportunity to compare products of different brands, with the help of precious reviews.
E-Commerce as an opportunity for the aftermarket
Compared to other business areas where e-Commerce is literally crushing traditional retail channels, things are slightly different in the automotive aftermarket. In fact, in this case a motorist, once bought a spare part, will still need an expert who knows how to assemble it, which means he still needs a workshop to go to. The web, therefore, must be viewed as an opportunity to increase earnings since transactions are now increasingly made via computer. Frost & Sullivan too admit that, online trading will weigh more heavily in the future, with a compound annual growth rate ranging between 10 to 15% in Western Europe and 15 to 30% in the Eastern part of the continent. In the quest of grabbing the lion's share of the aftermarket sector, a pie worth 440 billion Euro, according to GiPa Italia, with the potential to reach 640 billion by 2020, both IAMs and OEMs are playing their cards. The former through investments in innovation and training, given the rapid technological changes in the automotive sector. OEMs, instead, must focus on providing greater value to the end users borrowing some of the key features of the independent market: quicker service without the need for an appointment, a greater presence online and the transformation of single brand dealerships in workshops able to accept vehicles of different brands.
