How consumers buy auto parts and accessories is changing dramatically and in the next two years’ manufacturers will see more of these changes than any other segment in our industry.
It's no secret buyers have shifted to doing their product research and buying online, which coincides with the increased use of mobile devises. According to a study from Google, 91% of smartphone users turn to their phones for ideas when doing a task and 82% consult their phones while in a store deciding what to buy. Google sums it up by saying, "we don't go online, we live online."
Hedges & Company projects online sales of parts and accessories, excluding online auctions, to grow by over 16% in 2016 to $7.4 billion.
This instant connectivity has created a bridge between manufactures and customers and the benefits are just beginning to emerge. New research released by Hedges & Company showed 57% of parts buyers visit manufacturers’ websites as part of their shopping research. These buyers are not only looking for detailed product information. They want to know more about the brand and the company before making a buying decision. 35% come to the site to buy direct from the manufacturer.
Social Media Not So Hot
Buyers begin their research online with 93% reporting they went online as part of their parts and accessories shopping. Automotive magazines were consulted by 25%, and 20% visit a local parts store for pre-purchase research
When looking online for information, social media sites came in last place with only 9% of parts & accessories buyers looking on Facebook, Twitter and other social sites. The majority of buyers, 74%, used Internet search engines followed closely by automotive retailer websites at 73%. Manufacturer’s websites were third with nearly three out of five buyers visiting those sites.
A manufacturer’s online presence has a strong influence on the buyer’s decision to purchase their product, either online or offline. The research showed 60% of buyers were more likely to buy a product based on the ability to find information about manufacturer online. In fact, if a manufacturer did not have a good online presence 22% of buyers were either less likely or would not buy that brand.
Buyers Want to Buy Direct
“The research showed buyer preference for buying direct from a manufacture is growing,” said Julie Hedges, of Hedges & Company. “More than a third of buyers said they preferred buying direct. Only 4% preferred not to buy direct and the rest reported having no preference.”
One survey respondent provided the following comment on buying direct from a manufacturer:
"Generally, when purchasing from a manufacturer, they pay more attention to your needs and questions and have more knowledge (obviously) about the product."
Selling direct doesn't have to upset traditional channels of distribution, either. In a study released by Digital River, which commissioned Forrester Consulting, over half of manufacturers that started selling direct reported a positive effect on other sales channels and only 9% reported a negative effect. The study cited several reasons for positive effect on the sales channels including: relationship with consumers, improving customer relationships and experiences, increasing brand awareness and the ability to sell a broader range of products not stocked by distribution channels.
"Over half of the manufacturers in that study reported an increase in sales through their traditional distribution channels," Hedges said.
Who Is On the Internet
Hedges cited the misperception that only young people are online. "Over half of the parts buyers in this study and other research studies we’ve conducted were over 45 years of age. About a quarter were 65 and older. There is a misperception only young people, or millennials, are buying and shopping on the Internet and that isn’t what the data is showing. You can reach a broad range of ages through the Internet," Hedges said.
Another important thing to remember are what buyers are looking for when they visit a manufacturer’s website. "They want detailed product information and they want to know if a part fits their vehicle. If a manufacturer's website only has a few bullet points to describe a product, that's not enough anymore. That buyer will move on to a competitor with more detailed information and they’ll get the sale.”
As more manufacturers take advantage of this direct sales opportunity many will also need to re-think their marketing plans to take advantage of today's marketing technology. A consumer-facing website makes buying direct easier. Dana Nevins, CEO of WebShopManager, a web development company the focuses on the automotive aftermarket, estimates that 25% of aftermarket manufacturers either now sell direct on their website or are getting ready to sell direct, up from 10% just five years ago.
That will be covered in next month's installment on the growing trend of manufacturers selling direct.