The automotive aftermarket industry is dealing with a number of disruptive trends, including:
Global demand for aftermarket parts continues to grow due to aging vehicles, less-than-optimal road conditions, and frequent technology updates.
The growing eCommerce channel produces smaller orders that are more expensive to fulfill. And eCommerce has made it easier for manufacturers to sell directly to consumers, bypassing distributors in some cases.
Channel consolidation has led to a shift of power in the industry. The lines are blurring between the “Do-It-Yourself” and “Do-It-For-Me” channels, and both are being challenged by eCommerce upstarts. As vehicles become more complex, work is shifting to the “Do-It-For-Me” channel.
New competition is coming from unexpected places as Amazon and other eCommerce firms enter the market, and big box firms chase market share. To compete with “generic” firms, auto aftermarket companies must leverage customer relationships and demonstrate their specialized automotive knowledge.
Brand loyalty is declining as customers grow more price and service sensitive.
SKU proliferation continues to be a problem as manufacturers add more complex parts and companies expand their “good, better, best” approach to compete with big retailers.
Distributors are putting pressure on manufacturers to store slower-moving inventory upstream.
In this constantly shifting industry, it is vital to find a partner who can help your business stand apart from the competition. Fortna can help.
“The automotive aftermarket is a hyper-competitive business fueled by SKU proliferation and technology advances, all of which demands attention to both what is happening today and what is coming in the future.”
John GiangrandeAutomotive Aftermarket Industry Leader