The automotive aftermarket has seen a major uptick in e-commerce activity, but it’s not all about consumers – and the transition to more digital transactions is not without its human impacts.
According to a survey conducted by Hedges & Company, total U.S. aftermarket e-commerce revenue grew by 30.6% in 2020 from the previous year. And while compounded annual growth rate (CAGR) for parts e-commerce is projected just under 9% through 2025, the shockwave that this massive, pandemic-driven shift has sent through the aftermarket is undeniable.
Online revenue for automotive parts will reach $41 billion in 2023 in the U.S. alone. The market as a whole comprises a multitude of channels: from automotive e-commerce websites and first-party sellers selling direct, third-party marketplaces, to sellers using Amazon marketplaces as a platform to sell their products.
In Canada, recent AIA Canada surveys focusing on e-tailing sales have revealed a growing appetite by car owners for buying online.
According to “Buying parts and fluids online: A look at consumer automotive e-tailing in Canada,” 12% of respondents bought parts or fluids on line in the last year; 21% browsed online, but purchased in store; and online buyers spent an average of $469.
All this is to say that e-commerce – which had been a small but discrete part of aftermarket business for decades – exploded in a whole new way through the pandemic, and stands to change the face of the way it does business from here on.
Tony Del Vasto, VP marketing and corporate development for Vast-Auto Distribution, says that as seismic as the shift has been, his organization has taken it in stride.
“We keep making small gains in the e-commerce area both from a fulfillment perspective, B2B and B2C,” he says, adding that all their business is professional sales. He says too that they didn’t have to make any significant new investments due to the growth of e-commerce demands. “We have had a dedicated e-commerce specialist on our team for several years.”
Paola Bianchi, director, digital strategy and retail, NAPA Auto Parts at UAP Inc., says the shift has been very impactful. “The pandemic has certainly had a lasting effect in all of us, especially when it comes to shopping habits.
“While people are back to brick and mortar, there was a definite shift in consumer habits. People gained confidence in online merchants, and we all developed a whole host of features to enhance the shopping experience that has propelled us forward significantly – not only in B2C platforms, but also in B2B, making it easier to do business with us and rejuvenating our tools that are now more suitable to the next generation.”
“On our B2C platforms, we aim to help our customers find the right solution and guide their path in their passion for automotive. You would think that retail consumers are more prone to online shopping.
“However, in our case, our professional customers are running complex operations and using tools in their shops to manage their business. Shop management systems are connected with our online tools, making it simple and easier to find what you are looking for and get a delivery within the next 30 minutes. Therefore, our professional traffic is significantly higher, leaving the more complex questions to our Parts Specialist on the phone, while leveraging fast service through online tools.”
Del Vasto’s view is consistent with this B2B focus, citing other benefits of the uptick in e-commerce channel utilization. “The B2B portion has required less human touch on our end, which helps control labour costs. E-commerce is a long-term proposition and requires organizational focus. We aspire to sell more B2C through our corporate stores.”
Vast Auto, as part of the Aftermarket Auto Parts Alliance group, has been able to draw on resources from the group to help the enterprise on the path.
Bianchi says that UAP Inc.’s position as part of Genuine Parts Company allowed them to leverage tools originally developed for the U.S. market, adapting them to Canadian market needs as the pandemic-driven trends took hold.
“However, we have and continue to invest significantly in online tools since the pandemic to develop new functionalities and ways to improve the shopping experience and ease of use. It is in constant movement. The main difference is that we are now developing our online capabilities together with the U.S. market, so the tools are tailored to the Canadian market as much as they are to the U.S. market.
“While both countries are very similar, there are habits and conditions that are unique to our country, such as bilingualism and preferences in search tools.
“We have been fortunate to have the support of our executives all the way to our CEO to do whatever we need to do to better service our customers, investing significantly in online tools.”
One aspect that Bianchi says should not be overlooked, in the rapid technological evolution taking place: its impact on people.
“I would say that we all learned that where there’s a will, there’s a way. Everything is possible when we jump,all-hands-on-deck, as we did during the pandemic.
“So, knowing that, whatever roadblocks are in your way, you just have to remember that it doesn’t always have to be that way, and we should continue pushing the limits and pushing ourselves to advocate for our customers in the marketplace, while focusing on the quality of the tools and information you put out there.
“However, it does take a toll on people. The stress and the long hours are not something we can or should sustain over time. So, there is definitely a balancing act.
“And the main lesson learned is that when you listen, truly listen, to your customers, magic happens.”