Revenue Forecast

The estimated revenue for the base year 2020 is $37.11 billion for the study period 2020-2030.

The Impact of the Top 3 Strategic Imperatives on Electronic Retailing (eRetailing) in the Automotive Aftermarket

Transformative Megatrends

Why

• In the past decade, digitization of the retail landscape has emerged as a major industry trend, and the COVID-19 pandemic has accelerated this process.
• Consequently, consumer buying behavior has drastically evolved in response to heightened exposure to different platforms.

Frost Perspective

• As vehicle ageing continues and inflation is influencing vehicle ownership behavior, this increased exposure to the online channel can help supply target customers with cost-competitive options.
• Cost competitiveness is likely to be derived from the direct-to-consumer (D2C) selling media, and online sales is one of the more popular options.

Disruptive Technologies

Why

• Access to high-speed internet and improving smartphone penetration globally are facilitating the adoption of digital channels in retail.
• Technologies such as augmented reality (AR), virtual reality, and 5G connectivity will boost the application of these channels in retail.

Frost Perspective

• While the retail channel is digitizing at a steady pace, more relevant solutions could accelerate adoption in the automotive aftermarket channel.
• Such solutions include integrated remote diagnostics and artificial intelligence (AI)-enabled models that can help ensure accurate diagnosis and parts identification.

Competitive Intensity

Why

• While pure-play eRetailers primarily dominate in European markets, mass eRetailers and marketplaces are popular globally.
• To improve adoption of the eRetailing channel in the automotive aftermarket, companies need to invest in robust fulfillment solutions, including same-day or even faster delivery.

Frost Perspective

• Under pressure to perform and become profitable, companies will need to reduce customer acquisition costs and optimize their business.
• The need to make fulfillment more effective will add to this pressure and lead to market consolidation.

Research Scope

Growth Drivers

• Post-pandemic customer behavior: Exposure to online channels during the pandemic has permanently altered buying behavior, leading to increased online searching, researching, comparing, and purchasing.
• O2O integration: Companies are targeting addressable markets beyond DIY customers by offering fulfillment services (e.g., installation and oil change).
• Innovative fintech solutions: Payment solutions, including financing options such as buy now, pay later, help improve affordability for a larger portion of the population.
• AI and related digital solutions: AI-enabled customer purchase journeys will foster increased customer confidence and facilitate the transition toward online purchasing channels.
• Customer support enhancements: The aftermarket is gradually adopting best practices, such as ensuring accurate cataloging, implementing effective return policies, and establishing seamless customer contact support mechanisms.

Growth Restraints

Restraint:

• Lack of standard catalogs: Inaccurate and non-standard catalogs are among the biggest roadblocks to improving adoption; they can lead to incorrect orders, making the entire channel unviable.
• Local regulations and taxation policies: Local governments’ constantly evolving policies can undermine seller confidence, and the resulting ambiguity can create an unstable environment.
• Uncertain geopolitical events: eCommerce relies heavily on cross-border relationships, and any uncertainty can hamper the movements of goods, resulting in supply disruptions and price inflation.
• Lack of distribution: Speed of service will become increasingly important, particularly when targeting B2B and DIFM customers; markets and sellers that lack a robust distribution network will evolve slowly.
• Data privacy concerns: Concerns about data privacy can deter customers from making online purchases, as these transactions require access to personal and financial information.