A Look at the Growing Online Auto Parts Industry
Online sales for auto parts are growing, which means retailers in this industry need to be prepared to cater to their digital customers. In addition, auto part retailers need to be prepared to compete with Amazon, which already carries more than 2 million products in this category.
Fortunately, price and product intelligence provider 360pi is shedding light on the trends in the online auto parts industry, as the company analyzed a sample of more than 30,000 Amazon SKUs for available products (before shipping). According to the data, tradition is still very important in the budding automotive market. In fact, the data shows that in many cases auto part retailers still have exclusive relationships with brands and feature unique assortments of products. What’s more, many auto parts brands are specialized in one or a few specific product sub-categories.
Additional data from 360pi shows that brake components are leading online auto parts sales when it comes to available assortment and competitive pricing. Amazon has likely taken notice of this, as the marketplace offers the same or lower prices on brake parts 75 percent or more of the time when compared to retailers AC Delco and Wagner. Moreover, the data found that core charges are a fee or deposit required at the time of purchase that is then refunded when the old or replaced part is returned to the retailer to be recycled, manufactured and sold again. For online-only retailers like Amazon, core charges create a price disadvantage because they cannot accept a returned part.
“As we have observed across several categories with significant e-commerce penetration, Amazon does not aspire to be the lowest price, but rather the fastest follower of the lowest price to reinforce perceived price leadership in the market and maximize margins,” said Jenn Markey, vice president of marketing, 360pi. “We expect that Amazon will apply this proven strategy to the entire auto parts category once they learn the dynamics in key sub-categories like brakes and refine their algorithms accordingly.”
This is just one of 360pi’s category-specific benchmark reports, which can be very valuable to retailers looking to learn more about the digital trends in their industry.