New research shows growing reliance on e-commerce among aftermarket customers

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Updated Jan 29, 2021
05.20.Ecommerce buying online sales-min

person entering credit card information online with laptopOnline sales have been the fastest growing segment of retail commerce for years, but according to a recent report by Hedges & Company, the COVID-19 pandemic also has drastically increased the acceptance of e-commerce in the aftermarket parts and accessories distribution space.

E-commerce purchases rose 42 percent from the first week of March to mid-May across a variety of automotive aftermarket sectors, the company announced last week, providing further evidence to the longstanding belief that e-commerce will have a prominent place in the future of aftermarket distribution.

Hedges & Company, a digital marketing agency serving the automotive aftermarket sector, evaluated more than 12 million online user sessions and purchases across a nine-week span and was able to identify a multitude of purchasing changes immediately before and after the onset of the pandemic, as well as when compared with the same period last year. In addition to a giant leap in total online sales from March to May, the company also reported a 6 percent increase in customer visits to aftermarket websites and an 11 percent increase in conversion rates.

Though powersports and accessories experienced the highest jump in purchases over the nine-week span — up 126 percent in Week 9 compared to Week 1 — every other business segment included in Hedges & Company’s report also grew during the evaluation period. OEM replacement parts sales were up 14 percent, light truck and off-road parts sales were up 57 percent, performance/racing parts sales rose by 26 percent and automotive aftermarket parts sales jumped by 41 percent. Comparatively, the five segments were up just 9 percent combined during the same period in 2019.

Many hypotheses can be extrapolated from this data.

The restrictions implemented nationwide throughout March and into April forced many consumers to search for alternative avenues to purchase products and, of course, businesses offering robust e-commerce solutions were most likely to benefit from these forced purchasing changes.

Despite the huge jump, e-commerce growth in the automotive aftermarket still trailed growth rates seen in many other markets tracked by Adobe’s Digital Economy Index, which surged 49 percent in April. This would seem to indicate the average aftermarket customer has a stronger relationship (and reliance) on brick-and-mortar retailers than consumers in other markets but also appears willing to transition a fraction of their business online for products and equipment that require little expertise or guidance during the purchase process.

Hedges & Company’s report seems to confirm that belief. E-commerce purchases of OEM replacement parts, which often have a high degree of specificity, grew at a lower rate from March to May than all e-commerce sales in 2019, despite the pandemic. Conversely, accessories, off-road parts and conventional aftermarket components, which generally require less consultative input from sellers, all experienced major online sales booms in March, April and May.

E-commerce represented 16 percent of all spending last year, according to a Digital Commerce 360 analysis of Commerce Department retail data.E-commerce represented 16 percent of all spending last year, according to a Digital Commerce 360 analysis of Commerce Department retail data.

In releasing its study results, Hedges & Company also reported the number of pageviews online purchasers accrued per shopping event grew by just 0.8 percent across its nine-week analysis and average session duration (the time a customer spent on a site) was down by 1.4 percent. When coupled with the huge sales gains, the company says, “This suggests shoppers had an idea what they wanted to buy online since they weren’t spending more time simply browsing.”

That statement should be a key takeaway for any aftermarket manufacturer or supplier — despite it referring to the light-duty marketplace.

Buried deeper in Hedges & Company’s report is a note that the average cost per click for paid search online advertising among the company’s clients dropped 31 percent this year compared with the same period last year. For those unfamiliar with online marketing, cost per click (CPC) is a data point that evaluates the effectiveness and profitability of online marketing campaigns. The lower a campaign’s CPC rate, the higher its value and return on investment (ROI) for the advertiser.

A 31 percent drop in CPC is a gigantic win for Hedges & Company’s clients. When coupled with the slight increases in site visits and conversions, and the stable pageviews and time on site numbers mentioned above, that CPC rate confirms automotive aftermarket customers have become more engaged online. They are no longer just going online to research. They are logging on to buy.

But increased customer activity online doesn’t guarantee an uptick in sales for every distributor.

According to research by Randall-Reilly, publisher of Trucks, Parts, Service, turning customer engagement into online sales requires the right selection of products and a true e-commerce solution.

Regarding products, Randall-Reilly research indicates marketing campaigns with the highest ROI are geared toward moving moderately priced and generally straightforward replacement parts, kits, tools and accessories with steady turnover rates. This could include hoses, belts, filters, wiring harness and more. Randall-Reilly data indicates these components sell well online because vehicle owners know they will eventually need to replace them, many viable OE genuine and aftermarket options exist and parts cross-referencing tools enable customers to find their correct replacement part without requiring assistance from a seller.

Randall-Reilly adds that lower-priced wear parts, as well as additives, fluids and shop supplies, also sell online when available as add-on purchases during a transaction but are rarely purchased independently by online shoppers due to their ubiquity in the marketplace.

Additionally, the company notes distributors that allow online purchasing but only to pre-approved clients do their business a disservice if their inventory is searchable to the general public. Many customers shop for parts online to avoid the hassle of calling or driving throughout their area of operation to find a part. When they find what they need online, they want to be able to provide their credit card information and order it that day.

“If a customer can’t get all the way through to check out online, you’re missing an opportunity,” the company says.

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