o2o Growth Is Changing the DIFM Market
o2o eCommerce is disrupting the relationship between consumers and repair outlets as it expands the range of automotive products that can be purchased online and installed offline. o2o auto repair is changing the Do-It-For-Me (DIFM) market across the U.S.
New consumer research by Lang Marketing provides powerful insights into the fast-growing o2o DIFM market and how the changing perceptions and needs of different generations of consumers are fueling o2o expansion.
Online to Offline
Online to Offline (o2o) DIFM sales involve the online purchase of auto parts installed offline at repair outlets. o2o auto repair has generated the most significant increase in the eCommerce business mix across the aftermarket between 2016 and 2022.
o2o’s share of eCommerce auto parts transactions soared by more than two-thirds between 2016 and 2022, with o2o sales exploding by nearly five-fold at user-price.
o2o’s Expanding DIFM Reach
Today, o2o auto repair has potential access to over one-third of the DIFM market. Over the next five years, the reach of o2o auto repair will expand significantly, propelled by advanced vehicle diagnostics, artificial intelligence (AI), intelligent components and the use of “big data.”
By 2028, the reach of possible o2o repair will extend to over half of the DIFM light vehicle market.
Average Annual Growth: eCommerce and o2o
eCommerce auto parts sales topped 12 percent average annual growth between 2016 and 2022. This was over five times the growth rate of the overall light vehicle aftermarket.
o2o auto parts sales climbed even faster, surging at an average annual rate of more than 32 percent between 2016 and 2022.
o2o increased its share of eCommerce sales by two-thirds between 2016 and 2022, as it significantly topped the average annual rate of eCommerce auto parts growth.
o2o transactions generated nearly 36 percent of total eCommerce auto parts growth between 2016 and 2022, much more than its average annual share of eCommerce auto parts sales.
Generational Differences
Lang Marketing’s cutting-edge consumer research explores generational differences in consumer preferences in purchasing auto repair and deciding where work is performed. Special attention is given to o2o auto repair’s role in raising the DIFM strength of different types of o2o sellers.
Many consumers, particularly Generations Y and Z, accounted for a greater share of o2o repair than their corresponding strength in the overall Do-It-For-Me market.
More analysis of the significance of generations in the surge of o2o purchasing will be presented in future issues of the Lang iReport.
Trust Is a Critical Difference
Lang Marketing has found in its ongoing consumer studies that Millennials and Generation Xers have more trust in purchasing auto repairs from Platforms and large eSellers than in dealing with local repair shops directly.
Convenience and No Hassle
The convenience of ordering parts and repairs online, thus avoiding direct contact with repair outlets and unnecessary travel to mortar and brick shops to discuss automotive work, is a significant consumer benefit of the o2o auto repair model.
o2o auto repair offers the added convenience of an approved Installer network, enabling consumers to choose the time and place of repair.
Future Developments
Large platforms and eSellers recognize that o2o auto repair provides a means for expanding their penetration of the enormous vehicle repair business.
This offers an alternative to the more complex approach of supplying parts to installers, who often demand rapid delivery that requires significant warehousing and delivery resources.
In contrast, the o2o model allows several days between the time parts are purchased and when a member of the approved installer network conducts the repair.
The growth of o2o will be propelled by its great appeal to Millennials and Gen Zers, who are the future of the DIFM market.
Six Major Takeaways:
• Online to Offline (o2o) auto repair is growing at a faster pace than the overall auto parts eCommerce sector and rapidly expanding its eCommerce auto parts share.
• o2o repair enables consumers rather than installers to select the product brands used in the repair. This is a major change from the current DIFM market, where installers make most brand decisions. This could have significant implications for the brand marketing of auto parts.
• Advanced vehicle diagnostics, artificial intelligence (AI), intelligent components and the use of “big data” will increase o2o’s potential reach from one-third of today’s DIFM market to over half by 2028.
• Significant generational differences influence how consumers select when and where to have their vehicles repaired and how to purchase that repair. Gen Y and Z consumers represent a substantially larger share of o2o auto repair than Gen Xers and Baby Boomers.
• Lang Marketing’s ongoing consumer studies have found that Millennials and Gen Xers prefer purchasing auto repairs online from platforms and large eSellers rather than local repair shops.
• See the all-new 2024 Lang Aftermarket Annual for an in-depth analysis of the rapid growth of o2o repair and the differing perceptions of consumer generations driving this growth.
2022 Sales Analysis in All-New Lang Annual
In 2020, COVID-19 hit the aftermarket hard as it suffered the most severe annual product downturn since World War II. However, the aftermarket proved resilient, and by 2022 product sales were significantly higher than before COVID-19.
The 2024 Lang Aftermarket Annual presents the annual volume and growth of 80 product categories and the sales performances of many key aftermarket sectors, including eCommerce versus brick and mortar, Do-It-For-Me and Do-It-Yourself, foreign versus domestic nameplates, car and light truck parts sales and the five major channels, to name just a few.
2020 Aftermarket Gut Punch
COVID-19 hit the aftermarket as never before, with 2020 product sales in the U.S. plunging over seven percent. This was many times greater than any annual decline since vehicle use was curtailed dramatically by fuel restrictions imposed to support the military effort in World War II.
2021 and 2022 Recovery
Light vehicle product sales rebounded smartly in 2021, up over seven percent, with 2022 volume showing continued strength and topping car and light truck product sales before the onslaught of COVID-19 by $7 billion at user-price.
80 Products Analyzed
The growth of 80 product categories is presented in the 2024 Lang Aftermarket Annual.
Thirty product categories topped five percent growth in 2022. At the other end of the sales spectrum, 10 products failed to achieve growth in the car and light truck aftermarket.
Product growth was distributed across several key products, with 40 percent of the 80 product categories exceeding the annual growth rate of the overall light vehicle aftermarket.
2022 Sales in Major Markets Sectors
Differences in product sales performances among several key aftermarket product sectors are examined in the 2024 Lang Aftermarket Annual: eCommerce versus brick and mortar sales, DIFM and DIY volume, foreign and domestic nameplate sales, cars versus light trucks and the sales of five distribution channels are covered, among other significant aftermarket sectors.
eCommerce Auto Parts Sales
eCommerce in the light vehicle aftermarket is presented in over 13 pages in the 2024 Lang Aftermarket Annual. Analysis is provided for each year back to 2016, with eCommerce growing at an average annual pace more than five times that of the overall car and light truck aftermarket.
Three types of eCommerce are analyzed: DIY, B2B (business to business) and o2o (online to offline).
Foreign Versus Domestic Nameplates
Foreign nameplates continued to set the pace for car and light truck aftermarket 2020 product growth.
Foreign nameplates (Imports and Transplants) generated most of the aftermarket product growth during 2022 as they expanded their aftermarket product share, topping 53 percent and up from less than 40 percent of car and light truck product volume ten years earlier.
DIY Versus DIFM
After declining in share for many years, Do-It-Yourself (DIY) product volume received a dramatic boost during the COVID-19 onslaught, as DIY sales increased their product share for the first time in more than 20 years.
The Do-It-For-Me (DIFM) sector rebounded in 2021 and 2022, accounting for more than 80 percent of 2022 light vehicle aftermarket growth.
A 10-year history of DIFM and DIY product sales is presented in the 2024 Lang Aftermarket Annual.
Light Trucks Dominate Cars in Aftermarket Growth
Their expanding new vehicle share has enabled light trucks to play the dominant role in aftermarket product growth.
This has boosted the growth of accessories because light trucks generate most of their volume. The VIO growth of light trucks has fueled the aftermarket since they average much higher annual product use per vehicle than passenger cars.
Distribution Channels
Five major distribution channels supply the car and light truck aftermarket in the U.S. In 2022, there were greater differences in the sales performances of these channels than in any year in over two decades.
The differing sales performances of major distribution channels reflect the varying participation of each channel in eCommerce and foreign nameplate product volume.
Six Major Takeaways
• In addition to the 2022 sales analysis of 80 product categories, the 2024 Lang Aftermarket Annual covers the performances of key aftermarket sectors: eCommerce versus brick and mortar, Do-It-For-Me and Do-It-Yourself, foreign versus domestic nameplates, car and light truck parts sales, and the volume of five major channels, to name just a few.
• eCommerce analysis is presented for each year back to 2016, showing an annual growth pace more than five times that of the overall car and light truck aftermarket.
• Foreign nameplates (including imports and transplants) generated most of the aftermarket product growth during 2022, topping 53 percent of aftermarket product sales.
• Reversing a long-running trend, Do-It-Yourself 2020 product volume was given a dramatic boost by COVID-19 as DIY sales increased their light vehicle aftermarket share for the first time in more than 20 years.
• Light trucks continued to generate all aftermarket product growth as they dominated new vehicle sales and boosted their share of the VIO.
• The onslaught of COVID-19 created greater differences in the 2022 sales of the five major distribution channels supplying the U.S. light vehicle aftermarket than at any time over the past two decades.
Want more? Check out the November 2023 issue of AASP-MN News!