When a car breaks down the first thing the car owner will do is take it to a mechanic or fix it themselves - either way, someone needs to buy the parts. Within the auto parts industry, parts can be divided into two types, the original equipment, or OEM parts and aftermarket parts.
The global ecommerce movement continues to grow. In the past, you would have to go to the dealership or mechanic, check the catalogue, and someone would need to go through a painstaking process to find the parts that would fit your car. These days as sales direct to consumers become more and more common, you only need to go to an online website, enter your vehicle details and easily see the correct part that fits. Often with multiple options from multiple brands and suppliers.
This is only made possible through a centralised database of vehicles and a global catalogue of car parts. Accessing this database is the first step for any business in the automotive industry wanting to sell car parts directly to consumers online.
Online automotive parts market outlook
The aftermarket auto parts industry is facing several great changes. As customers turn towards online platforms to buy the parts that they need, online businesses are expected to see an exponential boom in the years to come. Here are a few things to keep in mind regarding the market outlook.
Automotive aftermarket structure
The automotive aftermarket industry usually includes automotive services and parts businesses. The services industry generates 45% of the total revenue of the aftermarket industry while car parts businesses fill up the remaining 55%. Together, these two sectors play an important part in the automotive industry in general, generating a revenue of $760 billion globally.
In the auto parts business, there are five main stakeholders:
• Parts manufacturers: This category includes OEMs, OEs, and aftermarket manufacturers.
• Parts distributors: This includes buying groups, online distributors, retailers, etc
• Workshops: This category refers to the small garages or the chain centers that sell the parts
• Intermediaries: These are often automobile clubs, leasing companies or routing portals
• End consumers: This category includes car owners, businesses or fleet markets
A few years ago, the car aftermarket industry was valued at $760 billion, with most of this value being spread among three regions. The leading region is North America, accounting for 35% of the total market size, which is more than a third of the global market. The next leading market is Europe, accounting for 31% of the total value. The third-largest market is China, whose market share sits at 10% of the global market.
The recent five years have seen healthy and stable growth in the industry. McKinsey & Company expects to see the same level of growth until 2030. The expected growth per year is roughly 3%. Though this is still 1% lower than the past growth rates given the present conditions, the market size is still expected to grow healthily.
The aftermarket industry is bracing itself for great changes. In the McKinsey report, the researchers have highlighted six disruptive trends that can potentially change the entire industry forever:
• Consolidation among parts distributors: With the aftermarket industry becoming more mature, consolidations will be more common and widespread. In fact, consolidation in Europe has already started.
• OEMs aggressively expanding their aftermarket activities: Other players are beginning to expand their operations, and OEMs have significantly lost their market share in older segments in the industry. This means that OEMs will double on their attempts to expand their aftermarket activities to recoup the loss.
• Digitisation of channels and interfaces: Online sales as well as online communities will play an important role in the future, as people turn to online platforms for purchasing decisions and advice.
• Access to car-generated data: The advent of big data has made it possible for companies to gain access to a huge amount of car-generated data. It is estimated that a single vehicle now generates 25 GB of data per hour.
• Increasing influence of the digital intermediaries: Newer companies with tech-savvy experts and tech-integrated services will enter the market, challenging long-standing pillars.
• Higher price transparency and greater diversity of supply for customers: The rise of online channels means that customers gain easier access to prices, resulting in better price transparency.
In spite of these disruptive trends, almost every expert agrees that the industry is growing healthily. The global outlook for the industry is bright.
Handling automotive parts data
One of the most important aspects of an ecommerce website dealing in auto parts is how to handle automotive parts data. There are two types of data the website will have to keep an eye on.
Parts data refers to the basic information about the product. This includes attributes such as brand names, part types, dimensions and weight, etc. It can also include warranty information and pricing data for retailers.
Vehicle data in the online parts ecommerce space is much more complicated than parts data as it includes fitment data. Fitment data is the link between a part and a vehicle. This can be based on information such as the trim level, submodel, transmission code or other engine-specific information.
Fitment data will determine what kind of vehicles are compatible with the parts, so it is important to input the most accurate fitment data into the system. Wrong fitment data could end up with the customers returning the parts due to mismatches.
The problem is that fitment data is extremely complicated and vast. A part can fit multiple vehicles, so some parts can have thousands of fitment data pieces. Without a car parts database, handling fitment data will be extremely difficult.
Benefits of using a car parts database
A car parts database is a smart central hub of fitment data for your website. With this database, managing fitment data and improving customers’ experience will be much easier.
Seamless integration into an eCommerce website
A car parts database can take some effort to be integrated into an ecommerce website. But software such as PartsPal helps to streamline this process.As a result, your website will only use the data it needs, significantly reducing the amount of money you have to pay.
Easier curation of fitment data
Some car parts databases with a parts compatibility module allow the website owner to list out the cars that are compatible with the parts, making it easier to curate fitment data. Furthermore, integrating a car parts database into a website means that the website owner will not have to constantly update the catalogue. The database will automatically do so whenever there is a data change.
More convenience for customers
In the past, customers had to go through a catalog in order to find the parts that actually fit their car. With a car parts database integrated into your ecommerce website, navigating through the sea of data will be considerably easier. Customers can now cross-check and cross-search for the parts that will fit their car.
Efficient management of stocks
Inventory management can be a nightmare for many ecommerce businesses. Without a dedicated tool, it is quite easy to miss an item here or there. Failing to manage the stock means that you will have a hard time figuring out which parts to buy more from the supplier.
With an auto parts database, the stock management process will be considerably streamlined. The database automatically updates what is still in stock and what is out of stock, allowing you to easily buy new products.
Improving sales volume
The great thing about a car parts database is that it can also be used by other departments as well. For example, the marketing department can use the data generated by the vehicle parts database to recommend other products that might be compatible with the customers’ car. This will help to drive sales even further, bringing more customers to your website.
Integrating a car parts database into your ecommerce website opens up a whole new door to new opportunities to ecommerce websites. A wave of changes is coming, but with tools like auto parts databases, your business will be ready to take on new challenges.