A UPS expert explains keys for success.
The online retail market for automotive parts and accessories continues to explode. Kristin DeBates, a UPS marketing manager, shares her insights on this industry trend and how UPS can help customers succeed.
Staying in tune with shoppers' habits, preferences and needs can give sellers a rare competitive advantage.
What is the biggest trend you're seeing in the automotive aftermarket industry?
Kristin DeBates: The growth in e-commerce, selling direct to consumers, is undeniable. Hedges & Company forecasts online sales to grow between 13 and 14 precent for the next several years. They're projecting online sales of auto parts and accessories to be nearly $6.5 billion in 2016, up from $4.3 billion in 2013. Brick and mortar sales are up slightly, but only about 1.5 percent. So, the growth is really in e-commerce. We're also seeing more interest in the online channel from manufacturers, and we're seeing traditional retailers adopt a more omnichannel strategy.
So, what should companies consider before jumping in?
KD: First, if you're just getting into the online space, I'd suggest you map out what your channel strategy looks like today and how this would change with e-commerce. You'll want to keep distributors and retailer networks happy, because selling direct to customers can be seen as a threat to both. So, two ideas to consider: Should you move less profitable customers online? Do you offer a different brand online than you do through brick and mortar retail? Early and constant communication of these strategies with valuable distribution partners will go a long way in maintaining relationships, while developing an e-commerce business.
And, we're UPS. So, we think you need to consider your supply chain. Will e-commerce increase the amount of inventory and warehouse space you need, or decrease it? Will it change your customer base and, therefore, require changes to your distribution network? With the web, your offerings will now be visible to overseas markets, but are you ready to export? These are just a few of the many questions to ask and answer. And, we can help.
What do online buyers of auto parts and accessories want most?
KD: Obviously, customer satisfaction is centered on the product you're selling and the price point, but logistics can't be overlooked. We released a new UPS Pulse of the Online ShopperTM study conducted by comScore, and automotive parts and accessory buyers were among those surveyed. Most online buyers of auto parts and accessories said they were satisfied with their overall shopping experience. But rapid changes in competition and technology are likely to cause even faster changes in consumer expectations. Staying in tune with shoppers' habits, preferences and needs, and – whenever possible – staying ahead of them, can give sellers a rare competitive advantage.
The study also found that automotive parts and accessories shoppers were less satisfied with the returns process. They said they want to know upfront what the seller's returns process is, and they expect it to be clear and fair. Restocking fees are often a deal-breaker, and they have a negative impact on a shopper's willingness to purchase. Free or discounted shipping is expected, but so is having a wide range of shipping options at checkout.
You mentioned earlier that UPS can help. So, what is the UPS approach?
KD: Every customer has a unique set of needs, so our primary goal is to listen to our customers. We want to understand their goals and objectives. What keeps them awake at night? What challenges are they facing? From there, we craft an approach that speaks specifically to that customer, highlighting the UPS solutions or capabilities that will help them achieve their objectives. Key areas we focus on include how we can help them grow their business, streamline operational processes to save time, and improve end-customer satisfaction. We might suggest the UPS Developer Kit, which offers a variety of APIs that can be integrated into your e-commerce site. For example, you can offer UPS tracking on your site so the customer stays engaged with your site – and can return again. And, of course, we try to leverage the right UPS services. If you're emphasizing a direct-to-consumer model, UPS My Choice® can make a lot of sense for end consumers. They'll gain greater control of the final delivery, which is something our research shows is important.
So, how does a customer get started?
KD: If you are still in the formative stages, I suggest doing research to determine how saturated the market is, and evaluate what sites or marketplaces would be most advantageous. Ultimately, once you have made the decision to move to an e-commerce solution, we want you to call UPS. We have the expertise, tools and partnerships to get you up and running.