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E-tailing is changing the aftermarket, AASA says

Tuesday, September 10, 2013 - 15:24
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While e-tailing is not as large in the aftermarket as some other industries, it has grown rapidly in recent years. The importance of e-tailing extends well beyond sales – it will transform the aftermarket.

Dramatic changes are already underway across buying behaviors, brands, channels, prices and content – and the future holds more impactful changes. The AASA-exclusive e-tailing analysis by Booz & Co. released earlier this year, states “The potential opportunities and threats from e-tailing are too great to not address.”

What are some of these challenges and threats? Consider that more than half of all do-it-yourselfers (DIYers) start their parts purchase process online today. In five years, it’s predicted that nearly all DIYers will start parts purchases online.

The impact isn’t limited to DIYers due to the biggest impact of e-tailing on every sector: price transparency. Many do-it-for-me (DIFM) consumers are already researching prices online. As more DIFMs do online research, they will exert more influence on service professionals’ buying and pricing decisions. Service professionals are already influential online parts consumers, actively using the Internet for information about products, brands and prices.

The biggest potential e-tailing provides suppliers is to serve as a platform for engaging with all these consumers – DIY, DIFM and service professionals. Suppliers can gain valuable information about customers’ paths to purchase – research, product and price comparisons, selection and, in some cases, purchase and delivery.

AASA’s exclusive e-tailing report by Booz & Co. noted that suppliers who understand and leverage the Internet have much to gain: better innovation, higher brand equity, faster and more profitable sales growth and more clout with channel partners.

Clearly, AASA member companies are recognizing e-tailing’s potential. The annual AASA Technology Council (ATC) “IT Spend and Trends” survey, first conducted in 2012 and recently completed in 2013, shows that IT spending has increased at a faster pace than other manufacturing sectors. The results further reveal that the growth of e-tailing is contributing to significant changes in aftermarket IT spending.

Suppliers can ill afford to pass up the opportunities that e-tailing offers – but at the same time they cannot take rash actions that incur the wrath of current customers. With sufficient planning and execution, the channel conflict and pricing risks can be managed.

Editor’s note: Paul McCarthy, AASA vice president of industry analysis, planning and member programs, is a keynote speaker at the AASA Technology Council (ATC) Fall Conference, set for Sunday, Oct. 13, through Wednesday, Oct. 16, in Marco Island, Fla.

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