E-commerce will rapidly become new player in wholesale parts distribution
Chicago—The manner and methods of how the aftermarket sources parts — and where to source them — are constantly shifting. Take, for example, e-tailing, which is the fastest growing channel in the aftermarket supply chain with 17 percent year-over-year growth, outperforming analyst projections. Further change is now afoot, according to a recent presentation at the AASA Vision Conference.
“Electronic ordering in the aftermarket commercial space has lagged behind e-tailing, but that’s going to change very rapidly, and suppliers can prepare themselves for that digital transition,” said Greg Kirber, who is president and CEO of PartsTech, an auto parts search engine and ordering system.
As a former parts counterman, Kirber said he would spend as many as three hours a day on the phone trying to source parts. “It was a time-consuming, expensive process and we were returning between 22 to 25 percent of everything we purchased. I felt eCommerce had the potential to change that process by creating new efficiencies in the industry.”
At present, 80 percent of local hot-shot commercial orders are still made over the phone, he said. “It’s astounding when you consider a person can now order a five-topping pizza from a mobile app and have it delivered in under an hour, but the aftermarket is still using the phone.”
Many successful e-tailers are building digital content around their products in order to create a better consumer shopping experience, and as eCommerce gains footing in the aftermarket wholesale, larger players are entering the space with their own strategic initiatives, Kirber said.
While aftermarket eCommerce companies are successful at what they do, they all use different systems with different user experiences, interfaces and how their products are displayed and organized. “During a survey [conducted by PartsTech] of shops, the No. 1 reason they were picking up the phone was because learning four or five ordering systems was the equivalent of learning four or five different languages,” he said.
The survey also revealed that shops were spending an average of 92 minutes every day ordering parts. In most instances, the majority of the ordering process began with online research, but ended with a phone call, for several reasons.
“Shops want to know when their parts will arrive — they want confirmation that parts will be on the delivery truck in 10 minutes,” Kirber said. “They also want accountability for the parts that have to be returned due to mistakes, and shops largely don’t trust the inventory stated online.”
In the early days of eCommerce, there were many mergers and acquisitions, consolidations and brand transitions, which would result in a shop often receiving a different brand part and warranty than was ordered.
“It left a bad taste, but things are changing,” Kirber said.
Earlier ordering systems had few images, limited digital content and inconsistent abbreviations that are now in stark contrast with today’s customer experience, through which the quality of a company’s data reflects the quality of its brand.
“It allows shops to make adequate purchasing decisions and assess exactly what parts they need for a specific vehicle. The more content that’s offered, the better,” he said. Rich-content online ordering sites that are successful selling products are using multiple high-resolution images that can be rotated, as well as videos.
The transition from phone to online ordering will occur as Millennials mature into the industry, Kirber said. He offered an anecdote regarding a PartsTech distributor-customer and its largest shop customer: Phone orders would suddenly drop once a year and they experienced a three-week burst in online ordering, then phone ordering would mysteriously return just as quickly. This went on for three years before the distributor asked what was going on. The response was that the shop owner was going on their annual vacation and the younger crew was handling parts ordering.
“This change is happening and it’s going to happen very quickly, especially when age demographics are analyzed,” he said.
Other immediate future trends in eCommerce include GPS tracking from major distributors to allow estimated parts delivery in real-time. As artificial intelligence technology advances, Kirber added that, in the future, shops could be recommended specific parts and afforded the ability to build complex orders in real-time through voice commands as a technician performs maintenance and repairs on a specific year, make and model vehicle.