By Stephen Hewitt | UPS
E-commerce is transforming the auto parts industry faster than ever. And sometimes it seems like the only constant is change. The days when auto parts retailers could hang a shingle out and watch business flow in are long gone.
There’s an interesting blend of dynamics at play that intrigues even the most seasoned auto parts marketer. UPS probed these forces in the recent “What’s Driving the Automotive Parts Online Shopper.
These dynamics form the new blueprint for success. The parts sellers who implement these strategies successfully will be in a strong position to boost their competitive advantage in the market place.
Let’s begin with a dynamic that hasn’t changed: the need to meet your customers wherever and whenever they’re shopping. To maintain and grow e-commerce revenue, sellers must engage the growing masses of online customers efficiently and on their own terms. An effective retail strategy should seamlessly incorporate the shopping channels consumers are embracing, which include physical stores, websites, social media and online marketplaces.
The enduring appeal of brick-and-mortar
Physical stores have gotten a bad rap lately. It is no secret that online automotive aftermarket e-commerce is capturing an ever-increasing share of total aftermarket sales. Online auto parts shoppers surveyed in the UPS study overwhelmingly prefer to shop online, and they are more satisfied with shopping online vs. at a physical store.
But that’s not to say that physical stores have no place in modern retail. These locations offer tremendous potential to boost sales. Consider the following findings from our study:
• 86 percent of surveyed shoppers prefer to make returns in-store
• 93 percent make additional purchases while in-store
• 55 percent chose ship-to-store, up 10 percentage points from the previous year
• 75 percent of shoppers have made more purchases while in the store
As the desire for same-day shipping options continues to grow, physical stores are becoming mini-warehouses as retailers strive to differentiate themselves from competitors. Savvy retailers know the physical store will be a boon, not a burden, as it strives to grow revenue amidst evolving dynamics in the aftermarket.
Online Marketplaces
Online marketplaces are a powerful tool to drive brand awareness and grow your customer base. The UPS study shows that 68 percent of shoppers who make purchases on these marketplaces seek out the same retailer sometimes at least part of the time. Clearly, the online marketplace is capable of building your brand among new and returning customers.
One reason is the growing importance of social media in marketing. Nearly half of all Millennials (47 percent), now the largest age group in the labor force, use social media to promote a brand, and 36 percent of them say social media influences their purchase decisions. This is significantly more than shoppers in other age groups. While social media isn’t a preferred venue to purchase auto parts, its influence can directly impact your business. Monitor your company on social media sites for customer comments and referrals, thanking customers who become your brand ambassadors.
Websites, Mobile and Comparison Shopping
Your company’s website is still one of the most important channels to capitalize on automotive aftermarket e-commerce growth. A well-built website can track each customer’s online shopping habits and use that information to create a a tailored experience. It’s a portal to your social media sites and an excellent place to feature product reviews from consumers, industry influencers and the news media. The UPS study found that 71 percent of consumers cited product reviews as the most important content on a retailer’s website.
The world is going mobile. A mobile app or mobile-optimized web site is required. The UPS study revealed that 43 percent of auto parts shoppers use mobile phones to research product reviews and compare prices when shopping in-store. And, 44 percent of smartphone users prefer mobile websites when shopping online. Retailers must optimize their websites so shoppers can easily navigate product selection, specifications, applications, reviews and pricing on their smart phones, tablets and desktop computers. When doing so, be sure to optimize your content and each website format so search engine algorithms quickly find and list your business prominently.
Comparison search engines collect product information and pricing from competing retailers and display the collective information on a single web page. This is increasingly important. The UPS study shows that online comparison shopping increased to 95 percent in 2015, up 12 percentage points the previous year. Of those consumers, 52 percent say price is the top consideration when choosing a retailer.
In a price-sensitive sales environment, these are extremely powerful tools that are becoming increasingly important. In addition to efficiently helping you, as a retailer, gauge competitor pricing issues they are a great way to drive new customers to your website. Once you capture these consumers on your website, you can track their shopping habits and directly engage them with special value-driven offers.
Online shopping has added a whole new level of complexity – and opportunity – to selling auto parts and accessories. Consumers want what they want, when and how they want it, and they don’t think it should be too difficult. By fully understanding how each of these sales channels provides a meaningful customer experience, you can develop an engaging sales experience that funnels shoppers to your business time after time.
Stephen Hewitt is an automotive industry marketing analyst at UPS.