In this post we talk through the opportunity and rationale for the launch of ecommotors, our online multichannel initiative for aftermarket brands and resellers.
The market for selling parts, tools and accessories for cars that have left the show room – otherwise known as the aftermarket – is fascinating and unique. It’s a huge industry and many businesses play in it to serve the end customer: original equipment brands (like Ford), original equipment manufacturer brands (like Bosch), distributors, factors, resellers, dealerships and garages.
Like many B2B industries, they’ve relied on the skills of the salesperson to move products through the supply chain to the business that’s going to fit the part or supply the tool or accessory to the consumer, who might be unskilled in automotive or else a hobbyist or ‘DIYer’. Salespeople know which product is right for which car make and model.
Automotive has been a late category entry to online commerce, but in the last few years this sector has grown rapidly. That growth accelerated even more rapidly, out of necessity, in the second quarter of 2020 when physical outlets were forced to close. Of course, selling online means selling direct to consumer, at least about 80% of the time, since there are also B2B buyers using online channels.
Going direct means replacing the skill of the B2B person. It means organising product data so that a part number corresponds to the particular vehicle types that it will fit. Consumers search for parts for their vehicle make, model, year, fuel type and so on; they don’t search for a specific part number. It demands a major rethink and reorganisation for many firms who traditionally never had to worry about the end consumer.
This isn’t the only challenge, however. Far from it in fact. As well as understanding the end consumer, aftermarket providers need to understand the places where the end consumer buys. These places can be web stores, but in the UK they’re mainly the two online marketplaces Amazon and eBay, each of which brings enormous traffic but has its own rules and procedures that you must follow to be successful.
Furthermore, companies occupy different roles in the industry and are subject to different pressures. Brands and manufacturers, for instance, worry about how their brand is perceived online, especially if other companies are already selling branded products. Quite rightly, they want to protect and control that perception where they can. They also worry about channel conflict. If they sell online, will this growth simply eat away at their traditional routes to market, and their traditional and hard-earned relationships?
Distributors and resellers also have a concern around channel conflict. Added to that, they tend to represent a whole range of different brands. They have broad industry knowledge and they know what sells, so they often capitalise on this by developing ‘white label’ offerings which have much more attractive margins. Their problem is volume; how do they find the time and resources to cost effectively list enough of their large inventory to make online channels profitable?
Moving to online channels doesn’t cannibalise your traditional channels. It allows you to build incremental revenues since you’re tapping into new markets with new buyers. It turns out that there are many other strategic advantages to selling direct to consumers via ecommerce. You have a greater say over the protection and projection of your brand online. You also build business resilience since you’re present on more channels, and who can say that further waves of coronavirus won’t force further physical lockdowns.
Partnering with ecommerce experts allows you to ensure your product data and your online ‘store fronts’ are properly organised for how marketplaces sell and how the end customer searches for, finds and buys what you have. These partners can also manage the protection of your brand, tailor your offerings for each channel and take care of the order management, shipping and customer service elements once the sales start coming.
All of this means that you can simply get to market more quickly with data-optimised listings. Underpinning all of this trading activity are systems providers like Volo who can connect into your existing systems or become the backbone of your business, with ecommerce software and sales analytics software that are geared to companies whose requirements are sometimes for millions of SKUs and thousands of orders per month.
At Volo Commerce, we already serve a lot of customers selling parts tools and accessories across multiple online channels. Our partner E-Motive is also deeply steeped in automotive, having provided the full aftermarket managed services offering globally for over 20 years. So why have we set up ecommotors?
Well, until now, you would have to go to one provider to outsource some expertise or the full set of managed services, and another provider for the system for transacting and managing your ecommerce business across more than one channel. There was no single provider of the ‘whole product solution’, with systems and services wedded to each other and to automotive.
As we’ve already mentioned, the sector is unique, with particular ways of working and requirements that you don’t share with other sectors. Similarly, until now, there was no provider dedicated to serving the complete spectrum of aftermarket sellers – OEs, OEMs, distributors and resellers of all types – all with slightly differing challenges but with the common goal of getting closer to the motors consumer.
So this is both the opportunity and rationale for ecommotors – to provide a strategic focus for aftermarket multichannel ecommerce and the integrated technology, expertise and resource to fully digitise your business.