Did you know that the aftermarket auto parts ecommerce industry is booming? With an average growth of 5% a year over the past 5 years (8% growth from October 2019 to October 2020), and projected to be $290 billion in size worldwide in 2021, it really is taking off.
The question is what’s driving this aftermarket auto parts ecommerce boom?
Well, we’ve done some digging and have a pretty good idea of what’s making the aftermarket auto parts ecommerce industry so lucrative. We’ll break it down going from the obvious to the not-so-obvious in order.
COVID-19
Yup, you probably saw this coming. You can thank COVID-19 for the continued boom of the aftermarket auto parts industry. If you’re in tune with industry and economics in general, you can rightfully guess that when the pandemic hit in 2020, nearly all sectors of ecommerce took a hit. And that was certainly the case for auto parts.
The aftermarket auto parts ecommerce industry, like others, experienced a temporary halt.
With people locked up at home, told to social distance from everyone, and bombarded by news reports and scary stats as the virus spread, the aftermarket auto parts ecommerce industry tanked for a month or two.
But wouldn’t you know it? The industry came roaring back as shoppers settled into the “new normal” and as summer began. Revenge-shopping was a real thing. Aftermarket auto parts ecommerce businesses experienced surge beyond anyone’s wildest imagination.
Even after over a year of COVID-19, there is still conflicting news about what’s true of the pandemic and vaccines, and what’s not. And it’s that very same uncertainty that has inspired many vehicle owners to fix their cars up on their own. Essentially, since many aren’t too confident with being back in public, face-to-face with others without a mask, they’re more inclined to stay isolated and take care of any repair issues they’re facing on their own.
The Drop in Auto Sales
Despite resurgence in the SUV and pickup truck markets, auto sales in general have been wishy-washy for the past few years to say the least. That is until COVID-19 hit and the overall market sharply fell. This trend thus put vehicle owners into the new position of keeping their cars and trucks for longer-than-average periods of time than ever before.
Now that the average age of an owned vehicle is around 11 years, owners have been more inclined to do their own repairs, upgrades and parts replacements at home. This has led to a spike in aftermarket auto parts ecommerce, and has helped bolster the industry even more.
It also doesn’t help that we’re now in the midst of a very weird, unsure era of transitioning from petrol-powered vehicles to (EV) electric-powered, futuristic vehicles. In the next three years alone, there are over 50 new models of electric vehicles set to hit the market which could also further bolster the aftermarket auto parts industry, or conversely, cause it to dip. Unless, of course, the aftermarket industry innovates and begin to explore how they can work with electric vehicles.
Though there is some uncertainty, we’re hedging that ecommerce for aftermarket auto parts will continue to grow since the bottom-line trend of owners holding on to their cars for longer than before remains strong.
Auto Design
Along with the transition from petrol-powered vehicles to electric-powered comes the very uneasy phase auto design is in right now from normal or even flashy looking to futuristic. If you peruse any future automotive articles, the claimed looks of prototypes for cars coming in the next two or three years shows that what we’ll be driving soon if we buy something new will be vastly different than what we’ve ever seen before.
Take, for example, the BMW i8. It was already pretty impressive both in tech and design, but BMW are already redoing its look from the ground up. Why? For passionate car enthusiasts, this kind of redo makes them more apt to wait to purchase. And with each passing year with totally new designs and announcements of possible “coming soon” new models, the hesitation to purchase becomes very real.
We should also address lackluster response to recently over-hyped new models that have been released. Ford has long been successful even after the 2008 market crash. But ever since the Raptor, sales for their new models such as the Bronco and the Ranger haven’t been great. In fact, their total sales have dropped fairly significantly.
Ford is just one example of pre-launch ballyhoo that fell way short of expectation. There are many other auto design failures that saw a ton of hype before launch, and not a lot of sales after launch. It also doesn’t help that marketing hype for new models seems to die off completely once they’re available.
Bottom line: auto design in general is in a very weird state, and it’s only pushing owners of vehicles to keep their cars longer than average. These owners thus tend to shop for aftermarket auto parts online, and are pushing sales to new heights. (Don’t forget, nearly half of all online shoppers are using a mobile device.)
Financial Uncertainty
It may seem obvious while being not-so-obvious at the same time, but financial uncertainty is playing its part in bolstering the aftermarket auto parts ecommerce industry.
Ever since COVID-19 hit and lockdowns were put into place, many were extremely uncertain about life in general, let alone their finances. As the days and weeks rolled on, more and more people started settling into the “new normal” of DIY lifestyles.
Working out at home, learning Zoom meeting etiquette from your “home office”, and fixing and/or replacing parts on your own vehicle are just a few “new normal” routines that more and more people have embraced.
Financial uncertainty which directly stems from social contact uncertainty isn’t necessarily a bad thing. A lot of good stuff has come from a society that has had to keep life going while being told to stay away from others and stay at home. Remaining connected and doing your part for society is still very much human nature.
Think about all of the entertainment that’s now available for free or with greater access. Think about all of the content that’s been shared showing you how to do various at-home projects or DIY fixer-uppers.
In the same way, access to things such as aftermarket auto parts and a willingness to do install them on your own are becoming more widely accepted.
Wrapping It Up
The world works in mysterious ways and consumers react accordingly to the ebb and flow of retail.
All of our aftermarket auto parts ecommerce clients reported record-breaking online sales as consumers are demonstrating a high willingness to buy parts for replacements and performance upgrades. Will the aftermarket auto part industry slow down in the coming months? Perhaps. But the lows will set the trend for a new high moving forward. That’s our story, and we’re sticking to it! 🙂
