Like most industries, the automotive industry has seen a shift to digital in the past year due to the pandemic. The aftermarket business is no different.
The used-vehicle and CPO markets have been hot throughout 2021. According to TrueCar, the used-vehicle and CPO market industry expected 3.7 million sales of used cars and trucks during July. And the SAAR for used-vehicle sales stood at 39 million, according to recent reports from Cox Automotive. With that momentum, the market is expected to remain strong for the foreseeable future.
New vehicles are commanding historically high prices due to inventory shortages. This is increasing focus on used car and truck sales, and in some cases causing consumers to hold onto their existing vehicles. This has the potential to significantly raise the demand for aftermarket parts and services.
In addition, today’s consumers are keenly aware of the need for preventive maintenance, repairs and scheduled servicing to extend the overall value of their vehicles. This has increased demand for aftermarket parts and services, resulting in new growth and revenue opportunities for many businesses such as independent auto repair shops, collision shops and OE-franchised dealerships.
Digital Opportunities and Challenges for the Aftermarket Business
In response to market changes, aftermarket businesses have had to shift to more digital-centric experiences through apps and loyalty programs and more robust online experiences with enhanced search capabilities, online ordering and more.
Businesses are also building out their digital-centric experiences with online transaction-friendly technology, scheduling appointments and the ability to book vehicle pickup and drop-off online. Mobile service providers are leveraging online and digital more today, such as oil changes and scheduling windshield replacement services.
All of this means aftermarket businesses and service providers are looking for ways to leverage digital technologies that enable smoother, consumer-friendly transactions online, build digital-based target marketing programs that offer a more personalized experience for customers – and just like their dealership partners, they need technology that is designed to help protect against the threat of online fraud growth.
Finding Partners in an Unlikely Place
To accomplish all of this, aftermarket businesses are turning to companies they haven’t traditionally leveraged in the past for these types of expanded services to gain a better understanding of their consumers. Companies with robust marketing data capabilities can provide insight in each of these key areas to help aftermarket businesses grow and take advantage of today’s digital-centric driver.
New partners are working with aftermarket businesses to truly leverage sophisticated and targeted marketing data, especially in today’s vehicle diagnostic-heavy connected car space. As an example, this type of data can help aftermarket business owners better identify when customers are due for an oil change, and it can help business owners look at a specific geographic region to find buyers most likely to buy in their market based on vehicle and demographic data.
With digital retailing strategies being implemented in more aftermarket locations, technology and analytics partners are deploying solutions to help with the onboarding experience and digital retailing technologies. This includes solutions for everything from cart abandonment and false leads to appointment setting and parts ordering.
More importantly, analytics partners are helping to deploy solutions to protect against online fraud and risk from digital fraudsters who are savvy enough to create false identities for fraudulent transactions. This can help protect aftermarket businesses and reduce chargebacks and checkout while also reducing synthetic identity fraud scenarios.
Lastly, aftermarket businesses are using data and analytics partners to add significant value for customers in the commercial and fleet spaces. These solutions are helping leverage maintenance opportunities on fleet vehicles, as well as managing credit risk and even fraud on the commercial side.
Like dealers, aftermarket businesses and service providers are looking for ways to cater to a new digital-centric customer. To successfully accomplish their digital buildouts, they’re turning to companies that once only provided credit file solutions but today offer a wealth of digital retail, data technology and analytics solutions that help enable, identify and authenticate customers, provide target marketing and facilitate online transactions while reducing the threat of fraud.
Brian Moates (pictured above, left) leads the market development in the automotive aftermarket industry for Equifax.