Study reveals e-commerce has significant role in aftermarket

Jan. 1, 2020
Recent research suggests the aftermarket may not be as behind the times as you think.

Some may think the aftermarket is behind the times with regards to e-technology, but a recent study conducted by Manhattan-on-Rouge Communications and Gorilla Polymedia suggests otherwise.

In fact, the aftermarket may be more of a leader in the auto industry than a follower with its Web-based strategies. That could be because the aftermarket foresees a far greater role for e-commerce in the coming years than the original equipment sector does, according to opinions held by the study’s participants.

Observations from the research study  state that “as the automotive aftermarket becomes increasingly comfortable and effective with the Internet, e-commerce is likely to become the dominant transaction forum for a segment of the industry characterized by intense competition among large numbers of relatively small, entrepreneurial businesses in one product area to several, but narrowly defined, markets.”

Forty-four percent of aftermarket respondents support the idea that e-commerce eventually will reshape marketing and automotive product sales functions. Surprisingly, only 18 percent of OEM respondents and 23 percent of tier suppliers agreed with this statement. The majority of these two audiences (81 percent of OEMs and 63 percent of tier suppliers) do agree that e-commerce will have a “significant place” in the auto industry five years from now, but they don’t see it changing the fundamental way in which business is transacted.

Yet only 54 percent of aftermarket survey participants share this same view, meaning almost half of the aftermarket executives responding to the survey believe that e-commerce will completely change the fundamentals of how we currently conduct business.

“There is a major difference in the way both segments responded,” says Rob Hilliard, principal at Manhattan-on-Rouge, a Michigan-based communications agency specializing in opinion research and marketing communications services. “When you take a look at the nature of aftermarket business compared to the OEM business, the aftermarket is far more transactional in nature and much more competitive with regards to contract bidding. One only has to go to SEMA and AAPEX and take a look at all of the businesses that offer very narrow product lines to see how competitive it is.

“There are a greater number of smaller businesses in the aftermarket and e-commerce is a way to level the playing field,” he adds. “Participating in online bidding or including an e-commerce link on a website is far more conducive than some other, more expensive, marketing efforts.”

This may be good news for our industry because even though aftermarket websites are at an earlier stage of development than their OEM and tier supplier counterparts, “aftermarket businesses appear to be ahead of the industry curve when it comes to comfort and effective use of the World Wide Web,” says Eric Walter, principal of Gorilla Polymedia, a full service organic Web solutions provider.

According to the study, only 33 percent of aftermarket companies had a website six years or more ago. Forty-four percent have developed theirs in the last three to five years and 22 percent just within the past two. Because of their timing, automotive aftermarket businesses, in general, are still in a first or second generation developmental stage, where much attention is being focused on fine-tuning website architecture like copy, photography and graphics. OEMs and larger tier one and two level suppliers, in a more mature phase of development, are focusing on adding elements like PDFs, video libraries, animation and interactive sections.

Despite these facts, the study says aftermarket executives seem to be more satisfied with Web-based communications than their vehicle production colleagues. More than 50 percent of aftermarket businesses rate their websites and Web-based strategies as either “extremely effective” or “effective” yet just fewer than three in eight OEMs and tier suppliers say the same.

What clearly seems to be a problem among all segments, however, is the actual utilization of the Web. “The shelf life of a website is virtually day-to-day compared to six months or a year for a print piece,” says Hilliard. “You can’t spend money on this valuable tool and then update it every three months.”

Seventy percent of all respondents confirm that with regards to communication quality and information availability that all too often, “information has not been updated.” And, five out of eight respondents say that information is “superficial.” However, the study suggests that issues related to  the quality of information may have capital and  budget allocation at the root. “In order to have an effective website, you need a dedicated resource,” says Hilliard, adding that though it may be harder for aftermarket companies to allocate the budget for it, the environment is much more conducive to the use of e-commerce.

And, says Hilliard when speaking of the aftermarket community, “They are more ahead of the curve in reference to using new tools. Their management are used to the fast-paced environment,” adding that while they don’t have that much experience with the Web, they are much quicker to move through and gain the experience. He says OEMs and tier suppliers are making far less strategic use of their sites.

The study also takes a look at how information contained in website traffic reports is used to help shape marketing strategies. If you’d like a copy of this 58-page report, call Manhattan-on-Rouge Communications, LLC at (248) 320-1846. The cost is $95.

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