Updated 7/28/20: Coronavirus and Automotive Aftermarket eCommerce News
Note: See related article, click here: Auto parts chain store sales trends.
Aftermarket eCommerce maintaining big increase from 2019
(July 28) Data shows the aftermarket eCommerce channel has a significant year-over-year (YoY) revenue increase due to the coronavirus pandemic. That trend has been holding steady for four months.
The data pulled from over 20 million web sessions in 2020, compared to a similar number from 2019, shows a 64% increase in eCommerce revenue since May, covering 12 weeks. (NOTE: revised 7/28 to fix an error calculating the last three weeks.)
The first week of March, before widespread shutdowns, showed a typical increase of 17% from the previous year. The second week of March showed a slightly larger YoY increase, at 21%. The third week of March appears to be when uncertainty suppressed retail sales: the Dow dropped 2,997 points, the pandemic was declared a national emergency, there were major school and business closings and lawsuits to delay state elections.
Scott Luckett of GCommerce participated in an Auto Care webinar Thursday, June 25, where some of this data was discussed.
33% increase in automotive eCommerce from March 2020
(July 27) Hedges & Company analyzed over 20 million online user sessions and about 369,000 online purchases for parts and accessories websites in the US and Canada. Online revenue the week of July 19-25, 2020 had a 33% increase from the first week of March 2020.
By contrast, this same week last year (July 21-27, 2019) was down 3% from the first week of March 2019.
Our weekly analysis now covers 21 total weeks of eCommerce.
Our analysis includes both retailer websites and manufacturers selling direct to consumer (DTC) in the US and Canada.
We pull data to track the percentage increase/decrease in online sales, starting the week of March 1-7.
Here’s what we found for the 21st week of this analysis for various aftermarket segments, through the week of July 19-25:
Overall aftermarket eCommerce sales, including parts and accessories for automotive, light truck and powersports, sold through websites in the US and Canada: A 33% increase in online sales from the first week of March.
OEM replacement parts sales: A 44% increase from the week of March 1, 2020. Over the past 21 weeks, OEM replacement parts were negative for five weeks, went positive the week stimulus payments first showed up, and have stayed in positive territory since then. The last several weeks have been trending up.
Light truck and off-road parts sales: A 38% increase from the week of March 1, 2020. Truck parts and accessories have been strong since mid-April.
Performance/racing parts sales: Up 21% from the week of March 1, 2020. This includes performance parts, what some people may refer to as the “SEMA Show” market, as well as racing parts that some people may call the “SEMA Show” or “PRI Show” market. Several weeks of a consistent upward trend.
Powersports: 60% increase from the first week of March, one of the lowest increases for this category since April 2020. Powersports parts & accessories have been on downward trend for the past several weeks, down from a peak of 159% eight weeks ago.
Automotive aftermarket accessories: A 22% increase from the week of March 1, 2020. The “aftermarket accessories” product category is what some people may refer to as the “SEMA Show” market.
(May 12) Comparing the first 10 days of May to March, the pages per session metric on eCommerce websites was up only 0.8%, while average session duration dropped 1.4%. At the same time, overall average conversion rates improved 11.1%. All of this suggests shoppers had an idea what they wanted to buy online since they weren’t spending more time simply browsing. We’ve also seen the number of new visitors to eCommerce websites increase by 6% from March.
In paid search the average cost per click has dropped 31% from one year ago. That’s a weighted CPC across Google Ads and Microsoft Advertising. That’s the result of CPC staying fairly unchanged since January 2020 vs. an increase through May 2019.
Other aftermarket or eCommerce COVID-19 trends
Updates are sorted newest to oldest.
(July 7) FedEx beat its 4Q earnings expectations, thanks to a massive surge in eCommerce. FedEx parted company with Amazon last year but seems to be doing just fine. “In Q4, FedEx total U.S. domestic residential volume was 72% vs. 56% a year ago. Since the end of April, however, we have seen week-over-week growth in our business-to-business segment,” said Brie Carere, FedEx Executive Vice President and Chief Marketing and Communications Officer.
(May 20) Search Engine Land reports on an analysis by Reputation.com that showed the automotive category is a bellwether for the U.S. economy, as well as an industry to look at to see what is likely going to happen on Google My Business for other industries. Automotive-related views and clicks are rebounding on Google My Business, ahead of other industry categories.
(May 14) According to commerce solutions company, GCommerce, a panel of diversified eCommerce fulfillment distributors experienced 38% total sales growth in the period April 13 – May 13, from the prior 30-day period – month over month. This period includes the time that many Americans received their Federal stimulus checks and some eTailers reported that “every day is like Black Friday.”
(May 12) According to Bloomberg there are signs that people will shun public transit and resort to driving their own cars, as the world comes out of the coronavirus shutdown. A quote from Patrick Pouyanne, the CEO of a European oil company: “People are using more their cars because they are afraid to use public transportation.” Some parts of the world are not seeing a rebound in public transportation use, but are seeing an increase in miles driven. Another trend will be people choosing to drive on summer vacations instead of flying: road trips are back.
(May 5) Social security recipients were to receive stimulus payments last Wednesday, April 29. The Washington Post reports payments for Social Security retirement, survivor or disability, and Supplemental Security Income (SSI) recipients were due. SSI recipients who did not file tax returns and veterans benefits recipients will receive payments in early May. $50 billion in stimulus payments and tax returns went out last week.
(May 4) Automotive News reports new light truck pickup sales were only down by about 10% in April. There’s actually a concern in the automotive industry about a shortage of new pickup truck inventory because that could hurt the automobile industry’s recovery. The automotive industry is crediting the 84-month, 0% interest financing that started in March with propping up pickup truck sales.
(April 29) Parking and traffic analytics firm Inrix reports that travel is rebounding slightly for the week of April 18-24. While all passenger vehicle travel is down 41% from March, that’s better than two weeks ago when it was down 46%.
(April 29) Axios reports interesting changes in electricity consumption during the coronavirus shutdown (chart at left). No surprise, electricity consumed by auto dealerships, dry cleaning businesses and restaurants is down significantly (all down more than 50%). On the other hand, hospitals, liquor stores, pizza shops and storage units are up, with storage units leading the way at 23%. Axios reports one reason for the increase in storage unit electrical consumption is from college students leaving campuses. OK, that makes sense, but we’re speculating that enthusiasts are also using storage units to work on their project cars.
(April 28) Distribution automation company GCommerce reports that automotive eCommerce is up significantly. Amazon is running low on inventory with first-party (1P) Amazon warehouse shipments down. While Amazon 1P/warehouse orders are down, Amazon 1P/drop-ship and Amazon 3P fulfillment orders are way up. Rick Main, EVP of Sales & Marketing reports, “This supports the trend that the [Amazon] marketplaces focused their warehouse orders on COVID-19 essential products, and deflected non-COVID products from warehouse to drop-ship.” GCommerce has had several distributor customers get four times their average volume of Amazon drop ship orders in the past few weeks. Data guru and VP for Industry Strategy Scott Luckett adds that Amazon’s extended delivery times has driven auto parts buyers outside of the “Amazon ecosystem,” to other retailers.
(April 28) A confidential source told us today that eBay Motors sales in April have been tracking slightly ahead of Amazon auto parts sales.
(April 23) Auto News, in their Fixed Ops Journal section, posted a checklist for dealership parts and service departments to follow during the coronavirus crisis. It includes helpful tips that would apply to any automotive service repair business. Tips include sanitizing a car’s interior, leaving a sanitized card letting the customer know the car is “covid-19 clean,” a paper-free check-in process, and more. If you have a repair business it’s worth checking out.
(April 15) Research firm MacKay & Company held a webinar with the Heavy Duty Manufacturers Association (HDMA) on the outlook for heavy-duty truck industry and commercial vehicles. Sales for commercial vehicles have been declining for two years but now HDMA is forecasting a Class 8 heavy-duty production estimate of below 200,000 units for 2020, down from 310,000-315,000 one year ago. Richard Anderson, director of market research for HDMA said construction, agriculture, mining and off-highway industry segments are all down, leading to an “overall very pessimistic outlook.” MacKay & Company is also forecasting a 19.4% decline in heavy-duty parts.
(April 14) Investment firm Jefferies LLC published a report that indicates demand for aftermarket repair and maintenance services declined about 30% in the first part of April.
(April 13) BounceX, an email technology firm, reports that since March 1, email open rates have increased 23%-35% depending on the day of the week. Click through rates have not changed very much. (BounceX is not exclusive to the automotive industry.)
(April 13) Industry sources tell us the major automotive chain stores have an approximate 30% drop in revenue year over year, comparing the last week of March and first week of April. We’re also hearing the first indications that the DIFM market is taking a bigger hit than the DIY market.
(April 9) Automotive News magazine reports Michigan governor Gretchen Whitmer added employees at auto dealerships who work in online vehicle sales and deliveries to the list of “critical infrastructure workers.” Previously Michigan was one of four states that banned all auto sales during the coronavirus shutdown, but now allows online sales. Currently, 23 states restrict auto sales to online only.
(April 8) Klavio, an email marketing platform, is tracking sales of what they call “new essentials” (toys and hobbies, health and fitness, beauty and cosmetics, hardware, housewares, and sporting goods) with a survey of eCommerce companies. Although “new essentials” doesn’t specifically include auto parts & accessories, 50% of eCommerce companies reported sales are going up, about 26% reported sales going down, and about 24% reported sales are about the same (no specific date range is part of the survey).
(April 8) Amazon auto parts news: Several sources are telling us that Amazon has temporarily dropped all promotions and most advertising on automotive parts. All inbound traffic on Amazon is being pushed to products related to the coronavirus crisis, such as disinfecting wipes, sprays, and other health items.
(April 8) Inrix, a parking and traffic analytics firm, reports a sharp decline in vehicle traffic and travel, but the decrease has slowed. Personal travel the week of March 28-April 3 declined 47% from the week of Feb. 22-28, 2020. The week of March 21-27 declined 42% (Inrix uses a Saturday through Friday week). Long haul truck travel for March 28-April 3 declined 6% from Feb. 22-28, and March 21-27 declined 2%.
(April 7) Automotive News magazine reports that despite the recent plunge in new vehicle shipments, full size pickups are up 3% in Q1. Ram was one of only three OEM makes that reported an increase the week of March 22-28. Mid-size pickups didn’t fare as well, with a 36% drop in Q1. The South had nearly flat shipments, most of the decline was in the East, Midwest and West.
(April 7) Comscore’s in-market shopper data for new vehicle shoppers (not parts shoppers) shows the in-market audience fell 33% in the last week of March. One estimate for annual unit sales of new vehicles is 11.4 million in 2020, down from an original forecast of more than 16 million units.
(April 6) The Adobe Digital Economy Index reports a 25% increase in daily eCommerce sales, comparing March 13-15, 2020 to March 1-11.
(April 6). American Family Insurance Mutual Insurance Company reports that car accident claims are down 20% to 40%, comparing March 11 through April 3 to the previous year. American Family is estimating that is coming from a 20%-40% reduction in miles driven.
(April 2) We hear from industry sources that sales at the major auto parts chain stores dropped 20%-25% in the last two weeks of March, as consumers stay in their homes.
(April 2) New car sales are down in March an estimated 40%; we haven’t seen numbers from all OEMs yet. Previous forecasts have been calling for a drop of -40% to as low as -80% in March. We’ll continue to monitor this and post update on sales trends as they become available. Update afternoon April 2: Ward’s is reporting 992,392 cars and light trucks “sold” in March, down from 1.4 million in February or about 39%. The seasonally adjusted annualized rate (SAAR) dropped to 11.4 million units in March, down from a SAAR of 16.8 million in February.
The replacement parts aftermarket does well when the average age of vehicles goes up; miles driven will be down and we don’t know the impact that will have on repair parts. Check back and we will update these trends as data comes in.
(April 22) Here’s a graphic of what we see for the week of April 12-18, 2020 vs. the previous year and previous week. We looked at overall paid search impressions and clicks, and cost per click (CPC) as a “barometer” of consumer demand for automotive and powersports parts & accessories.
This is for seven days across all our paid search accounts. The numbers still remain very encouraging.
Paid search impressions are up significantly, with an 86% increase from one year ago and up 14% from the previous week. Paid clicks are up 54% from a year ago, and up 12% from the previous week.
We found that CPC was down 24% from a year ago. CPC has been trending down for the past several months so we can’t link a lower CPC to a decrease in demand. There’s been a 4% increase from last week, too. Amazon has still pulled back paid search ads for aftermarket parts & accessories, as they focus on other products, reducing online competition.
We look at CPC as a potential proxy for consumer demand…if cost per click is down, that might mean lower demand for search or fewer competitors. It may also mean things are running more efficiently, too. We don’t have a definitive conclusion on that yet.
Overall conclusion: Positive signs for the automotive aftermarket and eCommerce.
Auto parts organic trends
(April 22) We also wanted to create a “barometer” of organic eCommerce trends, like we did with paid. This helps us look for any impact from COVID-19 and the coronavirus pandemic.
This data is more of a challenge to pull. So, it was off to the drawing board again and we came up with organic conversion rate and organic revenue.
This graphic compares these organic metrics for the week of April 12-18 vs. April 14-20, 2019 and vs. April 5-11, 2020. Organic revenue for the week is up a whopping 35% vs. one year ago, and up 12% from the previous week. Organic conversion rate is up 58% from a year ago and down 7% from last week. We’ve seen very little correlation between organic visits and organic revenue: some sites are down for visits, some are up, but these sites are generally up for revenue and for conversion rate.
We’re seeing eCommerce perform well during the coronavirus crisis. Fortunately the aftermarket is recession resistant. Some experts are predicting a dramatic spike in eCommerce traffic pushing even more consumers into shopping online. In a very recent Yotpo survey about a third of consumers reporting spending more time online shopping as a result of the coronavirus shutdown. Only 38% reported no change in their shopping behavior.
We can’t predict the future but we can look at what’s happening today. Consumers are changing their shopping behavior from the coronavirus pandemic and shutdowns. Having the best automotive eCommerce platform is more critical than ever.
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Archive: stats and dashboards
We will update these stats periodically, so bookmark this page and check back. Below are the previous dashboards we posted.
April 15 update:
April 6 update:
March 31 update:
March 25 update:
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There are quite contrasting reports all over the internet. few of them say that the automotive market will be affected the worst, others say that the damage won’t be as much. We will have to wait and watch.