E-Commerce Will Significantly Change the Automotive Aftermarket
26 October 2000
E-Commerce Will Significantly Change the Automotive Aftermarket According to Lang MarketingWYCKOFF, N.J. - The automotive aftermarket, an industry exceeding $110 billion in 2000 product volume, is in the early stages of a long-running e-commerce revolution in which many aftermarket structures, business practices, and players will be changed or replaced. Lang Marketing (www.langmarketing.com) has concluded an extensive examination of e-commerce and formulated ten predictions covering its aftermarket impact.
1. E-COMMERCE WILL INCREASE AFTERMARKET VOLUME
B2C (business-to-consumer) e-commerce will significantly increase
accessory volume, with DIY replacement products and chemicals
getting a sales boost as well. The Service market
(installation by mechanics) will also increase as a result of
a variety of e-commerce initiatives.
2. E-COMMERCE WILL CHANGE THE AFTERMARKET PRODUCT MIX
Accessories and other discretionary aftermarket purchases will
receive a substantial sales boost from B2C e-commerce through
increased product selection and buying convenience.
3. E-COMMERCE WILL GENERATE A BRAND RENAISSANCE IN THE
Manufacturer brands took a beating in the brick-and-mortar
aftermarket during the 1990s. E-commerce will help reverse
this trend. Brands serve as a guarantee of quality and value
on the Internet. This will raise the standing of manufacturer
brands throughout the aftermarket.
4. E-COMMERCE WILL REDEFINE THE KEY ELEMENTS OF COMPETITIVE
E-commerce is causing a shift in the competitive paradigm from
physical assets such as locations and stores to knowledge and
information conveyed through the Internet regarding products,
customers, brands, pricing, etc. Brick-and-mortar businesses
which leverage their physical assets on the Internet will gain
5. E-COMMERCE WILL BRING GREATER CHANGE TO THE SERVICE MARKET
THAN TO THE DIY MARKET
While B2C activity will initially focus on DIY sales, e-commerce
will play a pivotal role in determining when and where
consumers have vehicle service performed as well as how that
service is done. In particular, the Internet will bring about
a reduction in the vast amount of unperformed light vehicle
maintenance (estimated by Lang Marketing to top $43 billion
6. AFTERMARKET BUSINESS-TO-BUSINESS (B2B) E-COMMERCE WILL GROW
MUCH LARGER THAN AFTERMARKET BUSINESS-TO-CONSUMER (B2C)
Within three to six years, B2B aftermarket e-commerce volume will
be more than ten times the size of B2C e-commerce aftermarket
7. AFTERMARKET DISTRIBUTION WILL BE MORE CHANGED BY E-COMMERCE
THAN AFTERMARKET RETAILING
While B2C e-commerce will grab the initial headlines, the
distribution of aftermarket products will be changed more in
the long run by e-commerce than will aftermarket retailing,
particularly by the dynamic growth of B2B e-commerce.
8. E-COMMERCE WILL TEARDOWN BUY-SELL BARRIERS IN THE AFTERMARKET
Sales and product flow in many aftermarket segments have become
increasingly controlled by "gatekeepers": organizations,
agencies, and programs controlling buy-sell relationships. The
direct nature of B2C and B2B e-commerce will teardown many of
9. BRICK-AND-MORTAR AFTERMARKET PLAYERS WILL STRIKE BACK WITH
INNOVATIVE E-COMMERCE INITIATIVES
While pure-play e-retailers have grabbed the initiative
(particularly in the B2C sector), the brick-and-mortar
aftermarket establishment is building an e-presence of its
own, combining local product availability with innovative
e-commerce strategies that will not only sell products over
the Internet but also bring customers to their stores.
10. E-COMMERCE INITIATIVES BY AUTOMAKERS WILL DRIVE AFTERMARKET
B2C AND B2B CHANGES
From Internet-ready cars to selling new vehicles on the Internet
and setting up parts exchanges for their suppliers, automakers
are rushing to transform their companies from rust-belt
legacies into high-tech cutting-edge companies. All of these
changes will fuel the e-commerce aftermarket revolution.
About Lang Marketing
Lang Marketing is a leader in research and analysis of the vehicle products industry, providing a wide-range of multi-client reports and proprietary services to manufacturers, distributors, and retailers of vehicle products, as well as the financial community. Lang Marketing's newest intelligence report, eAftermarket(TM), focuses on the e-commerce aftermarket revolution (published the 1st and 15th of each month). The monthly Lang Report(R) is a primary information source for the vehicle aftermarket.