E-commerce expands in auto sector

Dec. 7, 2015
According to the eBay Motors survey, consumers expect their car and parts buying experiences to be augmented with technology, and they will use more mobile and online tools to purchase vehicles and parts.

In October, eBay Motors released its "Future of Automotive Shopping Survey." According to the findings, consumers expect their car and parts buying experiences to be augmented with technology, and they will use more mobile and online tools to purchase vehicles and parts.

Roughly half of consumers have purchased auto parts online, and nearly one in five consumers have purchased a vehicle online in the past five years. The overall interest in online vehicle buying is projected to grow, as nearly 1 in 5 of consumers said they are “likely” to purchase their next vehicle online as well. In fact, only 34 percent of consumers said they “don’t think” they would ever consider purchasing vehicle(s) online.

"Growth in vehicle and auto parts sales online is much higher than for regular e-commerce," says Sree Menon, general manager of eBay Motors. "Retailers have to understand that they can't ignore having a digital strategy in place. Many retailers in the automotive space are focused on foot traffic. They use their online presence to drive more foot traffic to the store. We're in an era where online and offline really have to come together."

Parts retailers have to adopt an organizational strategy to address these changes in consumer behavior so that their online shopping experience can include all of the elements necessary to secure a sale. "There has to be enough content there so that consumers can research and buy, or research and buy later," Menon says. "You have to be relevant at all levels."

Mobile technology is also playing a larger role in online vehicle purchases. According to the study, 67 percent of consumers have researched vehicles via mobile devices, and 70 percent have searched for dealership information on their mobile devices. One in five consumers are likely to purchase vehicles via mobile devices, or leverage wearables to research or purchase vehicles. Of the consumers that bought vehicles online, 31 percent used their smartphone as part of that process, and 15 percent used a tablet computer.

"The use of mobile has become all encompassing," says Menon. "More people are likely to purchase a vehicle using their mobile device, which is very interesting. So many people are willing to make a major purchase using their phones."

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That's especially true of millennials, who are more open to using technology at all phases of the purchase process. Twenty-one percent of 18 to 29 year olds are even interested in trying augmented reality technology to shop for vehicles, and 52 percent are interested in virtually test driving vehicles.

"There's a generational element to this, but consumers in general see online purchasing as more pervasive," Menon says. "People have expectations that buying a vehicle or an auto part is going to be very much like buying shoes online. They expect free shipping, returns, warranty and all of those other elements."

Women are buying more auto parts

Online auto parts sales are also becoming more common. Nearly half of consumers (47 percent) have purchased auto parts online. Of those that have not made such purchases, roughly a quarter said they are likely to purchase parts and accessories online in the future. Respondents aged 30-39 (54 percent) have the highest percentage of people who have purchased automotive parts online.

The profile of the online auto parts purchaser is also shifting. The number of women purchasing auto parts has increased, with women accounting for 41 percent of online parts purchasers. Among the female purchasers, more than half (56 percent) install the parts themselves. Women are also more likely than men to use mobile devices to purchase vehicles online (36 percent, compared to 28 percent of men).

According to Menon, the increase in the number of women purchasing and installing parts has been enabled by access to more information about DIY repairs.

"Many women in the past felt like they needed to be more informed when they go to a dealer or a repair shop," Menon says. "They are already doing more research online and are more comfortable making those purchases. There's also been a proliferation of DIY content online. You can pull up a video that shows you how to install the part, which makes it much simpler."

Online shoppers in general are also highly likely to perform installation themselves, with 64 percent of those purchasers installing parts. Another 22 percent take those parts to an auto shop or dealership, while 14 percent tried both approaches.

Residents in the South are most likely to have purchased parts online (53 percent of respondents), followed by the West (50 percent), Midwest (46 percent) and East (45 percent).

Obstacles remain for e-commerce

There are still some challenges to purchasing vehicles and parts online that both dealerships and distributors will have to address. On the vehicle purchasing side, there are still a number of transactional elements that aren't currently addressed via e-commerce. Payment for vehicles on eBay Motors is still largely handled offline, as are things like title transfers, insurance, warranty and other elements. "Those are all of the things you go to the dealer for," Menon says. "If we can create a way to make those steps easier through technology, it could open up a really big market."

Menon expects video to play a larger role in online vehicle purchases. "Buyers will literally be able to see the vehicle they are getting online in a way that is very different than looking at a photo," Menon says.

For online parts sales, there will be closer integration of e-commerce and brick-and-mortar capabilities, along with service integration. "That capability could be useful for consumers who want to purchase parts but don't have the time or capabilities to fix their own car," Menon says. "For example, there could be a service available to take a tire to the installer for consumers that don't have the ability to haul it there themselves. The e-commerce provider could issue reminders about oil changes, and enable you to purchase the service online. All of that information can be presented in a very personalized manner, and that's another growth area that we see emerging."

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