The rapid expansion of Online-to-Offline auto repair will transform the light-vehicle aftermarket in several significant ways, states new analysis
Fort Wayne, Ind.—Online-to-Offline (o2o) auto repair is surging in share of the Do-It-For-Me (DIFM) market as younger consumers are increasingly receptive to buying auto repair online, and the availability of online auto repair expands.
In its latest nationwide consumer research, Lang Marketing found that Millennials and Gen Zers are far more receptive to o2o auto repair than older generations (Generation Xers and Baby Boomers).
“Millennials and Gen Zers (the fastest-growing DIFM segments) provide fertile ground for online auto repair sales to grow,” states the study. “The rapid expansion of o2o auto repair will transform the light-vehicle aftermarket in many significant ways.”
The following are highlights from the latest Lang Aftermarket iReport.
eCommerce Auto Repair Growth Potential
So far, eCommerce has not focused on the largest and fastest-growing aftermarket segment. The DIFM market generates nearly 80% of car and light truck aftermarket product volume and over 95% of growth. However, eCommerce aftermarket transactions are concentrated in the Do-It-Yourself (DIY) sector.
The DIFM market offers eCommerce its greatest aftermarket growth potential, and o2o transactions are the most likely way this will happen, according to Lang.
Online to Offline
o2o DIFM transactions link offline consumer buying with offline auto repair shops, which perform the work. In o2o DIFM auto repair, consumers buy auto repair online (from large platforms such as Amazon and eSellers of various sizes), with authorized networks of local repair outlets conducting the work.
For o2o auto repair to expand its DIFM share, consumers must be receptive to buying auto repair online, and platforms and eSellers must expand online auto repair availability.
Four Generations Dominate the DIFM Market
Four consumer generations generate over 95% of today’s automotive DIFM market: Baby Boomers, Gen Xers, Millennials, and Gen Zers.
Baby Boomers were born between 1946 and 1964 and are currently 62 to 80 years old. Gen Xers were born between 1965 and 1980 and are 46 to 61 years old. Millennials (Gen Y) are expanding their share of the population; they were born between 1981 and 1999 and are 27 to 45 years old.
Gen Zers, born between 2000 and 2016, are beginning to have a significant impact on the DIFM market. They are the second-largest generation and will soon surpass Baby Boomers in their impact on the DIFM auto repair market.
Growing Receptivity to Online DIFM
Nearly 60% of those four generations said they would likely purchase auto repair online if a large platform like Amazon offered it. Just six years ago, less than half had such a positive attitude toward online auto repair.
Along with this underlying shift in how consumers view online auto repair, attitudes differ significantly among the four generations.
Nearly two-thirds of Millennials said they were very likely to purchase auto repair online from a company such as Amazon, compared with less than 60% of Gen Xers and only one-third of Baby Boomers. Gen Zers stood apart from the other three generations with about 75% likely to buy auto repair online.
Online Auto Repair Versus Local Shops
Generations have different opinions when asked if they would likely purchase auto repairs online through Amazon or another large eSeller rather than deal directly with a local repair shop,
• Over 35% of Millennials said they were extremely likely, and 33% said they were very likely, to purchase auto repair online from Amazon rather than from local repair shops.
• More than half of Gen Xers said they were extremely or very likely to purchase auto repairs from Amazon rather than from local shops. That number jumped to over 75% of Gen Zers.
• Baby Boomers were less likely to be on board with o2o auto repairs: only 20% were extremely likely and 14% very likely.
Authorized Repair Outlets
Millennials and Gen Zers were nearly twice as likely as Baby Boomers to feel more comfortable with an Amazon-approved local shop than a local repair outlet with a good reputation. Gen Xers were 50% more likely than Boomers to prefer an outlet approved by Amazon over a local shop with a good reputation.
These findings indicate a sizable percentage of DIFM consumers trust Amazon’s selection of repair outlets more than local shops, even those with a good reputation. “This is key to future growth in o2o auto repair,” states Lang.
Aftermarket Impact
The growth of o2o DIFM will significantly impact the aftermarket.
• Consumers buying online from platforms and eSellers, rather than connecting with local shops to purchase auto repair, will change how consumers relate to repair shops and how auto repair is marketed.
• o2o auto repair growth will change auto parts distribution by enabling large platforms and eSellers to supply repair outlets with the parts needed to work on an o2o customer’s vehicle.
• Increased o2o auto repair will shift auto parts profits among platforms, eSellers, distributors, and auto repair shops.
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