Over the past few decades, the automotive industry has undergone significant changes in the United States, with a downward trend in automotive sales and a rise in online marketplaces such as Carvana. The COVID-19 pandemic exacerbated this trend, leading to a significant decrease in physical car sales due to lockdowns and supply chain disruptions.
Trends in Automotive Commerce
In the past two decades, there has been a significant decline in total car sales in the United States. While around 9 million cars were sold in 2000, only 3.5 million were sold in 2020. This drop may have been further exacerbated by the COVID-19 pandemic, which had a negative impact on physical sales across various industries. However, sales had already been declining substantially in 2019 prior to the pandemic.
Despite the overall decline in car sales, the market for automotive eCommerce continued to grow in 2021 and 2022, as many potential car buyers had no other option but to shop online. Even as businesses reopened, the popularity of online sales persisted, as customers grew accustomed to the convenience of eCommerce solutions.
Prior to the pandemic, 32% of US car buyers were open to buying online, but in 2021, that number jumped to 61%. The automotive parts aftermarket has also experienced a significant increase in eCommerce revenue over the past decade, with sales growing from approximately $6 billion in 2014 to around $12 billion in 2019 and showing no signs of slowing down into 2023.
Furthermore, forecasts suggest that aftermarket eCommerce sales will continue to grow between 16% to 20% from 2019 to 2022. This indicates that there is significant potential for businesses to take advantage of the opportunities presented by eCommerce and that automotive eCommerce is not just a temporary trend, but rather a long-term shift in the industry.
This trend has prompted the auto industry to increasingly shift towards an online model in order to improve the sale of both auto parts and vehicles. Companies like Ford have been prioritizing their automotive eCommerce websites and bolstering their social media presence to revamp their websites, enhance functionality, and increase digital advertising efforts.
Watch the video below as Echidna CEO, Mike Pierce, explains more about the shift from electronic parts catalogs to modern commerce in the industry.
To succeed in this market, organizations should adopt an omnichannel approach that integrates physical and digital sales channels. Automotive eCommerce involves buying and selling cars and parts over the Internet using a variety of devices. eCommerce sales are often done alongside physical sales, such as selling a car on a lot while purchasing aftermarket parts on an eCommerce platform.
The Auto Industry’s Transition to eCommerce
As automotive sales continue to shift towards modern eCommerce platforms, businesses in the industry are looking for ways to grow their online presence and attract more customers. To achieve this, companies need to adopt a comprehensive strategy that involves both technology and marketing tactics.
Customer experience
Auto companies must ensure that their online shopping experience is easy to use, intuitive, and provides the right information to help customers make informed decisions. This includes developing a website that is easy to navigate, offering relevant product information and specifications, and providing customer reviews and ratings to help guide purchasing decisions.
For example, implementing a robust search function that allows customers to quickly find the products they are looking for is critical for this industry with its numerous SKUs and customizations. Search features can include filters by part number, auto make, model, year, and other specifications that are relevant to the industry.
Technology
Technology is a critical component of any eBusiness strategy. Auto companies should invest in the right technology and systems to support their eCommerce initiatives, including a modern eCommerce platform, payment processing solutions, and inventory management systems.
Additionally, the use of AI and machine learning can help auto companies better understand customer behavior and preferences, and personalize the shopping experience to increase customer satisfaction and loyalty.
Data analytics
Data analytics enables auto companies to gain insights into customer behavior, preferences, and purchasing patterns. Auto companies should leverage data analytics tools to optimize their eCommerce strategy, including developing targeted marketing campaigns, predicting demand for products, and improving the customer experience.
Partnerships
Partnering with other companies can be a powerful strategy for auto companies looking to expand their eCommerce offerings. This can include partnerships with manufacturers, distributors, and other auto industry players to expand product offerings, as well as partnerships with eCommerce platforms and third-party applications to improve the online shopping experience.
Fulfillment and shipping
Auto companies must ensure that they have a robust logistics and supply chain management system in place. This includes developing a system for tracking orders and inventory, optimizing shipping costs, and ensuring that orders are delivered on time and in good condition.
If working with a third party vendor for fulfillment and shipping, make sure your company fully understands the shipping policies and procedures in order to provide timely and accurate shipping information to customers.
Security
Ensure that your eCommerce platforms and systems are secure and protected against cyber threats. This includes using encryption, secure payment processing solutions, and developing protocols for handling customer data.
Remaining Innovative to Adapt to Changing Customer Needs
It's clear that eCommerce is becoming an increasingly important channel for businesses in this industry to reach customers and generate revenue.
As eCommerce continues to evolve and expand, companies must remain innovative and adapt to changing customer needs in order to stay ahead of the competition and capture a share of the growing eCommerce market for the automotive industry.
Auto companies will need to focus on optimizing their online shopping experiences, offering competitive pricing, and providing fast and reliable shipping and delivery options in order to stay ahead of the curve and capture a share of the growing eCommerce market.
Learn more about how Echidna is working with auto companies to drive the future of the industry and contact us to start a conversation.
