As the COVID-19 pandemic subsides, it is having lasting impacts in a number of areas, some of them positive. One for example, appears to be the significant increase in e-commerce activity within the automotive aftermarket since the spring of 2020. This e-commerce explosion has amplified the need for more robust catalog content and data today.
In April of 2020, digital marketing agency Hedges & Co. issued results from extensive analysis of automotive parts and accessories websites in the U.S. and Canada, showing an unprecedented surge in online sales during the pandemic. A surge in sales spiked in mid-April 2020, coinciding with the receipt of tax refunds and federal stimulus checks. In the analysis, the company gave online sales from the week of March 1 an index of 100, before widespread shutdowns were in place. The week of April 12-18 had an index of 140, or a 40% overall increase in online sales of parts and accessories from six weeks earlier.
In yet another report, the firm shared that automotive parts e-commerce revenue hit $16 billion in 2020 in the US. Hedges & Co. projects that auto parts e-commerce market share will be over $22 billion by 2023. “Trends in online shopping are still accelerating in 2021 with consumers buying online at an unprecedented rate,” Hedges & Co. stated in its report.
With this explosion of e-commerce comes demand for more robust cataloging content. Catalog and data managers are working to fulfill the needs of multiple customers in a rapidly evolving parts retail/distribution landscape today. Aftermarket customers are asking for more robust catalog content. The question is: What is robust content exactly and what is necessary to meet those needs?
Per Jennifer Cothran, content manager at BBB Industries: “The word robust to me means something different than it does to you, or the content guy at NAPA versus the person buying the product itself. So, what we’re saying is what does that word mean? You want more content, but what type of content are you looking for? Installation? Are you looking for how-to’s?”
“Robust data is now the name of the game – the question is now how to define that,” Cothran noted. “Not only do data/content/catalog managers need to send out accurate data to ensure the right part for the application, images, attributes, but now features and benefits, troubleshooting information and technical tips are being looked for in a video or pdf form as a ‘must have’ now from our customers.
“The data needs of our customers are ever-increasing as more people move to buy or do their research online,” she said. “Not only do they want to know about the part they need, but [they] also want to be educated about the product and related products that they may encounter while either doing the repair themselves or prepare them for the cost of the repair that they may have a shop do for them. Accurate and complete data is now more important than ever to get out quickly to our customer base.”
Jim Franco, owner of Autologue Computer Systems, said the e-commerce boom during the pandemic pushed his company to new levels of growth.
“The recent e-commerce growth has been so substantial that it has challenged our company to grow our e-commerce products exponentially,” Franco said. “We have embraced new methods to help our customers financially move forward to adopt new technology sooner.”
Hedges & Co.’s research parallels with what Cothran noted in new customer shopping habits. The firm says digital influence has a huge impact on the auto parts retail industry. “Just over $140 billion in the auto parts retail industry in the U.S. was influenced by digital in 2020. That includes online and offline revenue. It includes revenue through sales channels like brick-and-mortar retail like chain stores or independent auto parts retailers,” the firm reported.
Hedges & Co. defines digital influence as what affects a consumer doing online research before buying an auto part or accessory. “More than nine out of 10 shoppers do online research even if planning to buy in a retail store. Digital influence also comes from online advertising, reviews, ‘how-to’ content, video ads and video content,” Hedges reports.
Jack Ramsey, senior vice president of sales and marketing for Standard Motor Products, agrees the need for accurate, consistent catalog data is critical. “That was the case pre-pandemic and will remain so even as online sales channels become more prominent in the global aftermarket,” he said. “This data must be managed and delivered in customer-specific and/or industrywide product load sheets.
“Up to 90% of purchases involve pre-research online, so we must make sure our data and content is accurate and up-to-date,” Ramsey added. “The majority of our parts are replaced as part of a repair job rather than preventive maintenance. The technician or DIY customer can’t wait for technical support in the form of replacement tips, installation instructions etc. Picking the right part can come from a variety of options, including year, make, model, supplier part number, OEM interchange, VIN lookup, matching images and more. All of this information must be accurate and updated to meet the customer need however they decide to look up the part.”
Customer Is King
While we often hear the phrase “content is king,” as technology evolves to an increasingly mobile environment, the rapidly changing demands of the customer are creating new content expectations. Customers want accurate info right at their fingertips. In the matter of one quick swipe, if you don’t have the info they need, you could lose their business.
“Will this fit my vehicle YMM? How fast can I receive my part? The types of information requests haven’t changed that much. What has changed is a customer’s tolerance for irrelevant information. Customers demand relevant content and information within a single glance or scroll of your website. It’s that moment of truth that determines success in a highly competitive digital environment,” said Houman Akhavan, chief marketing officer, CarParts.com.
“We are testing and working on a number of personalization enhancements on the website today. Using the data we have collected, we can listen in for signals on what type of customer is shopping on our website. That allows us to personalize the content as necessary to provide a better research, discovery or shopping experience,” said Akhavan.
Scott Tompkins, senior product marketing manager, Epicor Software Corp., said he’s hearing similar stories from Epicor customers. “Again, [we hear about] requests for more robust part information, including multiple images and size and weights for e-commerce. Additionally, as more distributors look for growth in the B2C e-commerce segment, there is increased need for consumer-friendly content. Simple things such as abbreviations (w/ PS, VVT, etc.) that are commonly understood among those in the automotive aftermarket are not always easily understood by consumers. This can lead to the wrong parts being sold or the consumer becoming frustrated and looking for the part elsewhere,” Thompson said. “These customers are also looking for access to more content than just part information – all the other content needed to complete a repair. This must be easily and quickly accessible whether you are a counterperson, technician or consumer.”
Like Cothran noted, Ramsey said that suppliers are being asked to provide a variety of digital assets today as part of their catalog offering. “Other than accurate data, suppliers must provide their business partners with the latest in cataloging and digital-asset support, such as 360-degree images, mobile-specific websites and images, and searchable product content,” he said.
“In many instances, a store counter professional is no longer touching every sale with the growth of B2B transactions. To assist counter professionals with online transactions, especially related to complicated repairs, we are partnering with our distributors to offer installation tips and videos available on their websites to help the customer do the job right the first time,” Ramsey said.
Franco says Autologue customers are looking for increased efficiencies and better intel on their customers, such as their daily buying habits both wholesale and retail. “We have seen a rapid movement from our parts distributor customers as they not only embrace technology as necessary but continue to embrace a more sophisticated approach to such technology,” said Franco. “Our customers realize more now than at any other time, that implementing new software to increase business efficiencies is absolutely essential when competing in today’s market.”
Michael Chung, director, Market Intelligence for the Auto Care Association, emphasized that communication and coordination among business partners is critically important, even more so today as a new type of business partner – the e-commerce customer – enters the mix.
“The relationship and coordination between channel partners has never been more important, with each partner filling a need when ensuring the smooth, accurate and timely flow of data, including enhanced content,” Chung said. “Added to the usual mix of manufacturers, distributors, parts stores and installers is a new partner: the online marketplace platform. This new partner must address a number of needs that are critical to the aftermarket supply chain (massive SKU counts, short delivery times, local or regional competitors, warranty claims and returns, etc.). Flexibility, creativity and patience are required when navigating this new environment.”
Scott Luckett, vice president, Industry Strategy, for GCommerce, echoed Chung’s sentiments on the critical importance of collaboration between channel partners. “We believe the increased needs from digital customers for content, broad assortments, speed and accuracy can only be served by brand owners and distribution working collaboratively. Our customers have realized significant increases in e-commerce sales and profits through investments in our fulfillment and visibility solutions that facilitate this type of collaboration,” Luckett said.
Luckett adds that regardless of who fulfills the order, brands should take ownership of the quality of their catalog content.
“Brands (manufacturers/suppliers) should take responsibility for providing their fitment and product content directly to approved digital partners,” Luckett said. “Brand owners have the most at stake and should ensure that customers experience the most complete and current content for their brand, regardless of who fulfills the order.”
The conditions of the past year may have sped up or forced the hands of some businesses that were not fully prepared to meet customers’ e-commerce needs. Now as the pandemic calms, Chung says it will be interesting to see if this rapid rise of e-commerce continues.
“Out of necessity, many companies that were merely dabbling in e-commerce have greatly increased their emphasis on that market over the past year,” Chung said. “Some have chosen to more fully engage with existing online marketplaces, while others have pursued their own online market strategies with home-grown solutions. How this trend finally shakes out will be of great interest. Futurist Jason Schenker noted that 2020 was a year where companies ‘had to’ provide e-commerce solutions merely to survive, and that 2021 (assuming the pandemic is ‘done’) is expected to be a time where business owners/managers evaluate their online offerings in terms of ROI and how much/whether to continue investing – while many customers may revert back to in-store shopping, others may find that this channel ‘sticks.’”
Ram ChandraSekar, founder and CEO of PhaseZero, agrees with Chung’s assessment that some in the industry may have been forced into action during the pandemic. “The industry in general is not well-prepared for the digital transformation in progress. While the focus on ACES and PIES standards helped accomplish some of the goals and needs, the main focus is still on data and catalog,” he said. “From PhaseZero’s perspective and our observations from multiple other industries, we need to progress from ‘Data and Catalog-only’ focus to ‘Content’ and ‘Knowledge’ areas of the content. Retail consumers demand and are used to an Amazon-like experience with rich content to enable best-in-class search experience.”
ChandraSekar said the pandemic also led PhaseZero to accelerate its own innovation and product roadmap as well as to deliver capabilities and enable new business models like BOPIS (Buy Online/Pickup In Store), Headless Commerce APIs, virtual inventory management, stockout management, search experience, integrated chat, sales analytics and marketing analytics.
With technology and customer preferences evolving at a rapid clip, having solid data management practices should be the ultimate foundation for any automotive aftermarket business.
“Timely, accurate and complete catalogue data is always high on the top of the list of needs. Customers expect all of these characteristics when looking up and ordering parts, whether through traditional channels or alternative channels (e.g., e-commerce),” said Chung. “Different customer groups – including online buyers – sometimes warrant different pricing schemes and terms, depending on factors such as service time, delivery methods or volume requirements. Coordinating these different schemes can be challenging, but must be addressed in an organization’s data management system.”