Opportunity Analysis of eRetailing for Automotive Parts and Service in the North American Market

  • Publication Date:July 2013
  • Publisher:Frost & Sullivan
  • Product Type: Report
  • Pages:133
  • ISBN:1598592

Opportunity Analysis of eRetailing for Automotive Parts and Service in the North American Market

Digital Purchases Likely to Account for Over 10 Percent of Total Sales by 2020

The online retailing market for automotive parts and services in North America has grown rapidly in North America since 2009. While lower online pricing has been the key growth driver, fulfillment and other convenience factors are increasingly becoming key value propositions for parts eRetailing. The research study analyzed the market through extensive interviews with market participants and consolidated secondary data. The research examines total online parts sales revenue, category analysis, competitive positions, and existing/emerging business models. The study period is from 2009 to 2012, with a forecast period of 2013 to 2020.

Executive Summary—Key Findings

Automotive parts eRetail revenues were an estimated $Xbillion in 2012 and is expected to cross the $X billion mark by 2020.

Automotive Parts and Service eRetailing Market: Key Takeaways, North America, 2012-2020
1. Online sales account for aboutX% of total aftermarket retail level sales. By 2020, eRetail sales are expected to reach about X% of aftermarket revenue with a CAGR of X%.
2. Marketplaces such as eBay and Amazon accounted for about X% of gross merchandize volume (GMV) in 2012. Increasing eRetailing through bricks and mortar retailers' own Web site will lead to X% increase in GMV share for the direct channel.
3. Pure-play independent automotive eRetailers expected to lose market share, dropping from X% in 2012 to X% in 2020. Mass eRetailers and traditional automotive retailers/distributors will be neck-to-neck leaders with X% and X% shares respectively.
4. Exterior parts, performance components, braking, and filtration were the leading categories, accounting for nearly X% of all online sales. Tires, which is currently at about X% of overall sales, is likely to witness the strongest growth over the forecasted period.
5. Convenience factors such as fulfillment time and cost to customer will supersede lower online pricing as key value propositions for parts eRetailing.

The Automotive eRetailing Gap

Automotive participants are currently lagging in many areas, such as online penetration, mobile commerce, and fulfillment (shipping and delivery).

Automotive Parts and Service eRetailing Market: Automotive eRetailing Gap, North America, 2012

Key eRetailing Drivers: Bricks vs. Clicks
Overall eRetail: Close to X% penetration in certain segments, such as electronics, books, and entertainment.
Automotive eRetail: Only about X% penetration in parts sales; negligible market in service sales.
Gap Reduction Outlook: Participants are likely to target XX-X% online penetration.

Key eRetailing Drivers: Fulfillment
Overall eRetail: Free shipping; same-day shipping; emerging fulfillment modes such as self-collect locker boxes.
Automotive eRetail: Limited free shipping options; bricks retailers primarily relying on click ‘n' collect models from own stores.
Gap Reduction Outlook: Bricks retailers are stepping up efforts but are unlikely to be able to compete with mass merchants and hypermarkets.

Key eRetailing Drivers: Social Commerce
Overall eRetail: Several retailers exploring full social commerce - actual purchases through sites such as Facebook.
Automotive eRetail: Primary focus on loyalty generation through dedicated Facebook pages, promotions and contests.
Gap Reduction Outlook: Full social commerce likely to be explored by established participants such as AutoZone.

Key eRetailing Drivers: Mobile Commerce
Overall eRetail: Nearly X% of North American retailers are offering full mobile commerce.
Automotive eRetail: Mobile commerce mainly restricted to product and location search; eBay and AutoZone are notable exceptions.
Gap Reduction Outlook: Full mobile commerce likely to be available from most key participants in the short term.

Key eRetailing Drivers: Digitization Models
Overall eRetail: Digitization Models
Automotive eRetail: Most participants are in early phases of digital integration.
Gap Reduction Outlook: Augmented reality, location-based services likely to be adopted in medium and long terms.

Key Questions This Study Will Answer

• What are the current factors driving the growth of the Internet sales channel for automotive parts and service channel? How does this growth impact market entities in traditional distribution channels?
• Which aftermarket channels are most threatened by the growth of Internet sales? Which competitors are expected to benefit from entry and participation in this channel?
• What are the limitations and drawbacks of the Internet channel?
• What are the value propositions, strengths, and weaknesses of key competitors in the Internet channel?
• What are the emerging opportunities in this channel? What strategies should competitors adopt to grow their market share and revenue in this channel?

Table Of Contents

1. Executive Summary
2. Research Scope, Objectives, Background, and Methodology
3. Definitions and Segmentation
4. eRetailing Market Overview—Automotive and non-Automotive
• Global Online Retail Sales Outlook
• Online Retail Market Revenue—North America
• Online Product Penetration Rates - Automotive and Other Categories
• Key Retailers Bricks vs. Clicks Sales
• Key Legislative Developments in eRetailing—US
• Macro to Micro Implications in Bricks and Clicks Retailing in Automotive
5. Impact of Mega Trends on Automotive Parts and Service eRetailing
• Key Mega Trends Impacting Automotive Aftermarket
• Impact of Mega Trends—Urbanization
• Impact of Mega Trends—Connectivity and Convergence
• Impact of Mega Trends—Social Trends
• Global Social Commerce Users Forecast
6. Automotive Parts and Service eRetailing Demand Factors and Challenges
• Key Influencers of Parts-Related Online Research and Sales
• Key Reasons for Not Buying Parts Online
• Key Market Challenges Facing Automotive eRetailers
7. Automotive Parts and Service eRetailing Market Overview
• The Automotive eRetailing Gap
• Growth Influencers in Auto Parts eRetailing
• Digitization Expansion Trend in Automotive Parts and Service
• eRetailing Evolution
• Key Automotive eRetail Participants in Operation
• Automotive eRetailing Value Chain
• Automotive Parts Retail Value Chain Analysis—Core Participants
• Recent Strategic Developments in Automotive Parts eRetailing
8. Automotive Parts and Service eRetailing Revenue Analysis and Forecast
• Automotive Parts and Service eRetailing—Revenue Scenario Analysis
• Revenue Forecast Scenario Assumptions to 2020
• Online Parts Revenue vs. Total Aftermarket Parts Revenue
• Percent Revenue Forecast by Competitor Type
• Gross Merchandise Volume by Business Model Type
• Automotive eRetailing Revenue Discussion
• Automotive eRetailing Product Category Analysis
9. Automotive Parts and Service eRetailing Business Models
• Automotive eRetailing Business Models: Direct and Marketplace
• Why The Marketplace Model Works
• Case Study—Amazon.com Marketplace Model
• Case Study—eBay Motors Marketplace Model
• Case Study—Ahwooga.com Marketplace Model
• Business Model Analysis by Market Participant
10. From Bricks to Clicks: Digital Convergence Strategies in Automotive Parts and Service Retailing
• Future of Automotive Parts Sales: Bi-channel to Omni-channel
• Convergence Strategy: Social Commerce in Automotive Parts
• Case Study—AutoZone Social Commerce Strategy
• Case Study—Advance Auto Parts Social Commerce Strategy
• Convergence Strategy—Mobile Commerce in Automotive Parts
• Case Study—eBay Motors App
• Case Study—AutoZone App
• Convergence Strategy—Customized Fulfillment
• Impact of Emerging Fulfillment Models on Auto Parts Sales
• Fulfillment Comparative Analysis for Key Participants
• Convergence Strategy—Service Aggregation
• Case Study—DealerCoupons.ca's Service Aggregation Model
• Case Study—AutoMD's Service Aggregation Model
• Convergence Strategy—Digital Retailing
• Convergence Strategy—Telematics
• Bricks and Clicks Convergence Matrix for Parts Retailing
• Automotive Parts and Service eRetailing Competitive Analysis by Participant Type
• Comparative Benchmarking by Participant Type
• Automotive eRetailer Future Growth Outlook
• Mass eRetailer/Aggregator Future Growth Outlook
• Traditional Distributor/Retailer Future Growth Outlook
• Mass Retailer Future Growth Outlook
• OES/Dealers Future Growth Outlook
11. Automotive Parts and Service eRetailing Competitive Analysis and Key Competitor
12. Profiles
• Comparative Benchmarking by Key Participant
• Company Profile: Mass eRetailer/Aggregator—Amazon.com
• Company Profile: Aggregator—eBay
• Company Profile: Automotive eRetailer—US Auto Parts Network Inc.
• Company Profile: Traditional Distributor/Retailer—AutoZone
• Company Profile: Traditional Distributor/Retailer—NAPA
• Company Profile: Traditional Distributor/Retailer—Advance Auto Parts
• Company Profile: OES—Ford Motor Company
13. Conclusions and Future Outlook
14. Appendix

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