Report Details How Amazon is Disrupting the Automotive Aftermarket
Sept. 8, 2017—One Click Retail published a report that details Amazon's impact on the automotive aftermarket.
As average vehicle age continues to go up, the automotive aftermarket is thriving and has become one of the fastest-growing segment in online sales, the report stated.
Amazon introduced auto parts to the platform back in 2006. Last year, Amazon expanded its automotive arsenal by launching its own car research site and a parts marketplace, which allows shoppers to punch in their make and model to search for the correct parts. This and other conveniences reveal that the automotive aftermarket is not escaping Amazon's notice and the impact of Amazon on the market is already disruptive.
In 2016, Amazon reached $2.4 billion in automotive sales. Year-to-date in 2017, Amazon has achieved a 16 percent increase in automotive sales, currently standing at $1.4 billion in sales.
In 2017 so far, specialty auto parts companies such as O'Reilly Automotive, AutoZone and Advanced Auto Parts have underperformed in the stock market, according to Canton Rep, despite expectations to the contrary. This has caused many investors to reassess the market and look elsewhere for disruptors. After long overlooking its ability to compete in the automotive aftermarket, industry analysts are finally starting to recognize Amazon as a serious player.
Two major trends in automotive aftermarket sales are that owners of older cars exhibit desirable maintenance behaviors, while new car owners tend to invest in appearance products.
With the fleet of vehicles on the road aging rapidly in the U.S., more and more car owners are turning to Amazon for their replacement parts, with underhood and undercar replacement parts generating nearly $300 million in sales during the first two quarters of 2017 alone, a growth of 20 percent year over year.
Beating out both replacement parts categories is truck accessories with $185 million.
Sales are driven by towing accessories, making up over a third of the total category sales and responsible for the two top items: an electronic brake control from Tekonsha and a 9,500-pound capacity winch from Smittybilt.
Growth in truck accessories is low, however, with most gains in the product group coming from appearance products such as wheel and tire accessories (55 percent) and appearance chemicals (30 percent).