Note: this article was originally published in April 2014, for an updated forecast, click here for a more current article.
If you’re marketing automotive parts online, parts and accessories once again showed a significant sales increase over traditional brick and mortar retail sales in 2013. The dramatic transition in the automotive industry from brick and mortar to online continues to be one of the important auto parts industry trends to watch.
This year will be our industry’s first year over $5 billion in online auto parts sales.
Online sales in 2013 (excluding auctions) showed nearly a 16% increase over 2012 and online sales will continue to show aggressive growth over the next several years.
Online auto parts sales growing
Online sales of auto parts and accessories hit $4.3 billion in 2013. Recent years have shown increases in online sales of between 12% and 16%. Hedges & Company is forecasting annual increases of between 13% and 14% for the next several years and we’ll reach $6.5 billion in 2016.
We’re counting online sales of auto parts and accessories, excluding online auctions. Adding online auctions would dramatically increase total online sales.
We consider auction sites like eBay Motors to be a sales channel because of the number of online retailers that sell through that channel; including eBay or other auction sales would result in double-counting.
Auto industry statistics on auto parts retail sales
In a note-worthy auto parts industry statistic, brick and mortar retail sales struggled through most of 2013 and ended up with an overall decrease of 1.5%, according to the US Census Bureau.
The chart at the left shows the dismal results where most of the year was very soft, with October, November and December being the only positive months.
Without the strong winter 2013 sales it would have been a very bad year. Traditional auto parts stores and chain stores saw a boost from the harsh winter that continued through February as replacement products, like electrical or exhaust parts, got a sales bump. Performance and accessory retailers probably had a much different outcome.
Online sales of eBay and Amazon auto parts
Amazon continues to show a very high growth rate in automotive parts and accessories, around 25% over the previous year. A high growth rate like that on top of their massive volume is a very, very big number. Amazon is now our industry’s biggest online retailer and many of our industry’s other online retailers have realized Amazon is the one to watch. These online retailers are continuing to push for better websites to compete with Amazon and are getting aggressive with auto parts SEO and PPC marketing.
Auction site eBay continues their tremendous growth through eBay Motors and are moving an estimated 550,000 to 575,000 auto parts and accessory products each week. “Auction site” is a misleading term as most auto parts and accessories are sold at fixed prices, not in auctions.
Auto aftermarket projections…Advance Auto Parts, AutoZone and O’Reilly: Chain stores push for DIFM business
As our industry transitions to online sales, the chain stores have found a clever way to continue to increase same store brick and mortar sales with an additional benefit of not having to compete head-to-head with Amazon: pushing for more DIFM business, or commercial business, by selling to auto repair and service retailers. DIY sales, or selling to the end user, do-it-yourself customer, are around 44% of our industry’s total sales. DIFM sales, or sales to commercial accounts, are around 66%.
As DIY parts sales soften at the retail counter, chain stores like Advance Auto Parts, AutoZone and O’Reilly have pushed themselves into the DIFM commercial business, eating into distributors’ and jobbers’ market share. Since 2007, DIY sales at the chain stores have fallen a total of 3% to 5%, while commercial sales have brought in a double-digit sales increase. AutoZone’s DIFM sales over the last 12 months alone have increased over 13%. (For more details on publicly-traded retailers contact our friends at Cleveland Research Company, an independent equity research firm in Cleveland.)
About 42% of O’Reilly’s sales are DIFM commercial sales now. At the end of 2013, DIFM sales at Advance Auto Parts were just over 40%, up from 38% a year ago, but with Advance’s recent acquisition of General Parts International they’ll soon be around 55%.
Do you need help competing online? Hedges & Company is an automotive SEO and Google Partner paid search agency. We can help with your automotive SEO and PPC marketing. Please read more about Hedges & Company digital marketing services. Or, if you have questions on our market research capabilities, call us: we love to talk about automotive market research!
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