The proliferation of eCommerce and online marketplaces have influenced all industries and sectors – including the auto parts industry. Car enthusiasts and professionals alike spend a lot of time and energy finding the right parts at the best prices.
But as with any online sector, it’s important to distinguish the authentic from the fraudulent. Not only do auto parts retailers need to confirm that the orders they receive are legitimate, but consumers must also be vigilant to ensure they are buying from actual retailers, and not from shady shops selling counterfeit or stolen parts.
The rise of fraud has outpaced regulations to combat it, especially within the auto parts industry, so it’s more important than ever for auto parts manufacturers, retailers, and auto parts suppliers to maintain their reputations and ensure they have a means of authenticating transactions and protecting customers.
Shifting from brick-and-mortar to online
While the auto parts industry is thriving, it’s still relatively slow to support online transactions. According to a report from Automotive Aftermarket Suppliers Association and SAP, most auto parts manufacturers aren’t yet equipped to accept online orders from service repair centers or individual shops. The same report found that fewer than 10 percent can receive online orders from individual consumers.
As businesses and consumers continue to favor convenience by purchasing their auto parts online, there’s ample opportunity for auto parts suppliers and manufacturers to boost their sales. They’re catching up now, but becoming a target for fraud along the way.
According to the Financial Times, while U.S. auto sales grew only 1 percent per year over the previous decade, sales at the major aftermarket auto parts chains grew 7 percent per year. The industry sees high value orders with high shipping costs, and often involves many hours of labor.
Where consumer demand goes, fraud follows. According to Forbes, card-not-present fraud losses total to just under $22 billion and automotive/power sports accounts for approximately 1.5 percent of that, costing the automotive/power sports industry more than $300 million. This equates to almost 2 percent of total industry revenues that are lost.
As auto parts retailers build-up their online offerings, the customer experience becomes extremely important. With more options available to them, customers need to be continually reassured throughout the purchase process that they are transacting in a safe environment.