LAS VEGAS — The Internet may soon be named the top salesman in many distribution and retail businesses.
Expected growth in the online segment presents major opportunities to boost sales and profits in the aftermarket, said panelists on the Automotive Aftermarket Suppliers Association discussion, "Aftermarket E-Tailing: Who's Minding the Store?" on Tuesday, Nov. 2 at AAPEX.
The Internet is a massive opportunity for aftermarket businesses to grow. Limited access to the Internet in the home and at work has limited the market's Internet penetration to well below 10 percent — some estimating 2-3 percent, others 6-7 percent. But the market still remains in the billions of dollars. Yet one point remained uncontested — online growth is upon us.
"As Internet access grows, so will penetration in the market," says Shane Evangelist, CEO of U.S. Auto Parts Network, which reports 90 percent of its business comes from the DIY market.
Currently, "penetration is low. But mobile applications, smart phones and the ability to connect to the Internet and e-commerce is going to grow. So this is a potential game-changer," says Scott Bauhofer, senior vice president and general manager, e-Commerce for Advance Auto Parts.
Internet sales are spiking in smaller product segments and larger, heavy hard parts segments alike. Shipping costs are not inhibiting consumers from online ordering, says Famous Rhodes, director of eBay Motors.
"Once you get your mind around what it takes to sell to customers online, there is a lot of growth available," says Steve Frazier, vice president, auto and industrial, Amazon.com.
But who is buying these parts? Of the customers buying online, generally 80 percent are do-it-yourselfers (DIYers), while 20 percent are do-it-for-me (DIFM). Of the DIYers, about two-thirds complete the installation, service or repair themselves, while one-third are seeking out others, including professional technicians, friends or even family members, to complete the service for them, agree Rhodes, Frazier and Randy Buller, founder of The Parts Authority, a New York and Washington, DC-based distributor with 35 locations that sell primarily to installers, fleets and wholesalers.
Business-to-business (B-to-B) customers are also using the Internet, but they are much more focused on fast delivery to meet their needs, Bauhofer says.
"It is very difficult if you are not doing daily delivery to compete with the 30-minute delivery," Frazier says of growing B-to-B business.
To help further boost online sales growth, suppliers need to focus on their data — specifically accuracy and timeliness — and focus on brand promotion, Evangelist says.
"Get your brand out there. If you don't have an active voice in the market, customers will go to someone else who does," says Rhodes, further stressing Evangelist's point of the importance of branding.
Streamlined product offerings that follow the industry standards of ACES and PIES can also simplify the purchasing process for customers, Buller says.
And while a focus on data is necessary, content control is just as important, Bauhofer says. "Online we have unlimited shelf space. Add videos, specs, all of that potential. Spend the time giving customers a better experience," he says.
If just getting started in the online sector, the panel recommends three areas of focus: data and building compliance with ACES and PIES; fitment, in terms of helping customers find what fits their vehicle and them as drivers; and content, which includes detailing parts attributes with specific information and images, and have these products available to purchase online.
Also during the breakfast, the Motor & Equipment Manufacturers Association presented Pete Kornafel, CARQUEST vice chairman, author and chairman of the Global Automotive Aftermarket Symposium committee, with the Triangle Award — an association award, with the recipient selected by members, that honors selfless service to the aftermarket.
"It has really been a labor of love. I've had a lot of good help. It has been terrific. This is an award for a process that will really help our industry along," Kornafel says.
