By Nathan Rigby, VP Sales and Marketing at One Click Retail

The U.S. Automotive market peaked in 2016 with a record year, falling slightly in 2017 to a total sales of about $17.25 million. This put an end to a seven consecutive years of growing sales, but the volume remains close to an all-time high. Despite the strong sales of new vehicles, the average age of vehicles on the road is also at an all-time high of 11.6 years. Together, these two trends are driving a boom in the automotive aftermarket and, like in so many other industries, the most growth is taking place online.

Of course, Amazon is well aware of this fact. The company has clearly been putting a lot of thought into vehicles these days, with such varied new ventures as developing Alexa-powered Echo speakers designed for cars, collaborating with Sears Auto Center to install tires purchased on Amazon, and even beginning to deliver packages directly to customers’ vehicles.

These investments will naturally attract more car owners to Amazon and make it easier for consumers to associate Amazon with automotive products. The company is already selling vehicles in Italy, and their latest strategic partnerships with GM and Volvo put them one step closer to selling cars in the US as well. Until then, Amazon’s sales of aftermarket products is going strong, earning an estimated $1.8B in first-party sales last year and growing at a rate of 18% year-over-year. Let’s have a look at the top trends in the Amazon.com Automotive market.

Automotive: The Amazon Effect

 

Auto Parts

With so many aging vehicles on the road, it’s no wonder replacement parts are driving sales. Today, more American car owners than ever are getting their replacement parts from Amazon, with Underhood and Undercar Replacement Parts generating over $350 million in estimated first-party sales during the first two quarters of 2017 alone, a growth of about 20% YoY. In total, replacement parts make up approximately 44% of Amazon’s total Automotive sales – much higher than in most of Amazon’s other markets.

Today, many car owners are opting to perform basic maintenance themselves rather than going to an expensive professional. DIY mechanical skills are more accessible than ever thanks to a wealth of online tutorials, forums and YouTube guides, and its easy self-taught consumers to quickly open a new browser tab, go to Amazon and buy the parts and tools they’re going to need. The DIY trend is taking place across all demographics but is most pronounced among millennials. By 2020, millennials will account for 40% of the automotive market, so their buying power is the most valuable to brands today.

However, brands that market primarily to auto shops can also benefit from selling on Amazon. Not only are consumers are more educated than ever (and will often choose a professional-level product when possible), Auto Parts is also driven by professional mechanics and automotive business owners. Amazon is becoming increasingly attractive to professional buyers, as their competitive pricing algorithm, economy of scale, and free shipping make it a reasonable alternative to traditional B2B suppliers.

Automotive: The Amazon Effect

 

 

Truck Accessories

As in 2016, Truck Accessories remains the largest Automotive category on Amazon, dominated by Towing Accessories, but is also one of the slowest growing categories. The next two largest categories, Underhood Replacement Parts and Automotive Equipment & Tools, are both growing at least twice as fast and are likely to overtake the leading category in 2019.

Amazon’s largest Automotive brand is ACDelco, which leads both the Underhood and Undercar Replacement Parts categories and ranks as one of the top 5 brands in almost every subcategory. ACDelco’s broad range of products results in total sales greater than any other brand – in comparison, CURT Manufacturing specializes in Truck Accessories and is the largest brand that category, but total overall sales are limited due to their niche appeal.

Automotive: The Amazon Effect

 

 

These categories primarily represent the aftermarket sales driven by an aging fleet of vehicles on American roads. However, there’s another major trend in the Automotive market, driven by the huge influx of new vehicles on the road in the last three years:

Appearance Products

While owners of older cars invest in parts and maintenance, new car owners spend more on appearance products and accessories. Each of the three fastest-growing Automotive categories on Amazon were driven by this trend: Appearance Chemicals, PBE, Oils and Fluids, and Automotive Accessories.

Appearance Chemicals, the fastest-growing category, is dominated by the Chemical Guys brand. Even with the category’s rapid growth, the leading brand is growing even faster, increasing its category share from 22% to 29% of 2017 1P sales. Smaller brands including Meguiar’s, 303, Griot’s and the private brand AmazonBasics are growing slower, but still benefitting from the category’s success.

Appearance Chemicals remains relatively small. The other top growing categories, Automotive Accessories and PBE, Oils and Fluids, are much larger in size and represent the popularity of consumable products on Amazon. While Auto Parts are significantly larger than chemicals and fluids in the US, the most growth is taking place in consumables, which is consistent with trends we see across nearly all product groups on Amazon.

2017 was the year when Amazon’s disruption of the Automotive market became clear. Amazon’s diverse investments in this space, including private brand items under the AmazonBasics label, have caused the industry to prick up their ears. The combination of three key market forces – aging vehicles, DIY mechanics, and three consecutive years when US vehicle sales were above $14 billion – are driving a boom in the automotive aftermarket and Amazon is well positioned to be key retail partner for brands in this space.

 

 

One Click Retail is the industry’s most accurate source of sales data for the world’s top eCommerce marketplaces. Using a combination of website indexing, machine learning and proprietary software, OCR estimates weekly online sales figures with market leading accuracy in order to deliver the best insights, analytics and strategies to their brand manufacturer clients. To catch a glimpse of how OCR gives brands critical edge on online platforms with our unique data and expertise, subscribe to our weekly eCommerce insights blog, and follow us on Twitter and LinkedIn.

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