Recent analysis from Frost & Sullivan, Future of Parts and Service Retailing in the Automotive Aftermarket, found that manufacturer-level replacement parts revenue stood at $340.64 billion in 2013 and is estimated to reach $471.88 billion by 2020; 10 to 15 percent of all global parts revenue will be generated online by 2025. In fact, online retail of parts in emerging markets like China and Brazil is expected to grow 10 to 15 percent by 2020.
Growth in global sales of connected cars will create a large pool of aftermarket retailers that design products in line with the latest technologies. The parts and service retailing segment of the automotive aftermarket is also witnessing a wave of digitization as dealers recognize the value of e-commerce tools. OEMs are securing existing distribution channels through telematics while expanding aftermarket reach through new B2B models and online stores.
Data from aftermarket analytics and in-store technologies will be used to engage the customer at all stages of the purchasing cycle. Predictive analytics enabled by data will work in tandem with telematics offerings, such as prognostics, smart alerts and in-vehicle sales, to personalize the buyer experience.
“GenY trends such as augmented reality, gamification and telematics will redefine user experience and open new opportunities for remote support and logistics,” said Anuj Monga, Frost & Sullivan Automotive and Transportation research analyst. “Since 53 percent of GenY millennial car owners are women, the introduction of selling strategies and store formats to drive sales and loyalty among female customers will gather pace.”
Though online stores have brought in various benefits to the consumer, the elusive component has been the ‘touch and feel’ experience of the product. Hence, brick and mortar stores are still preferred by most customers globally, especially if it is a trusted store. In the case of B2B or B2C clients, the challenge is to break existing contracts and enter into eRetail partnerships for the same parts.
Incorporating a brick and click model – where physical and Web stores coexist – is the best way to ease the transition to full-fledged eRetail. Integrating smartphones, eRetail stores and parts providers could be the step forward to one-on-one and customized retailing. Solution providers can leverage data and social commerce to develop aftermarket applications that cater to individual requirements and preferences. Software updates and remote diagnosis using applications onboard the vehicle can deliver instant support services.
“The convergence of technologies will bring forth a plethora of applications from OEMs and established brands, enabling the integration of real-time data through telematics and complete remote support right within the vehicle,” added Monga. “This integration of available technology to aid customer purchase pathways and service channels will map out the path toward the retail store of the future.”
