Is ‘digital’ the future for the independent aftermarket?
Research conducted by McKinsey claims that the automotive aftermarket industry has a current business value of about €800 billion and is expected to grow at a rate of 3% annually, to around €1.2 trillion by 2030.
As our lives appear to become increasingly digital, driven greatly by this year’s turn of events, it is difficult to deny that the independent aftermarket will not follow suit in terms of digitisation for some aspects of its operations.
Advances in technology are set to impact upon the independent aftermarket in a number of ways. Based on the estimated effect of trends such as electric vehicles, connected cars, and e-commerce, more than €100 billion, or 30% to 40% of aftermarket profits, could be subject to redistribution along the value chain in 2030.
What is causing this shift in distribution?
Put simply, technology.
Software and electric-vehicle component manufacturers will now enter at the beginning of the value chain. E-commerce and digital players will disrupt the traditional parts-distributor business. While software start-ups will jump at the opportunity to connect customers with services in new ways.
Furthermore, increases in vehicle complexity will also result in shorter maintenance intervals and connected vehicles will enable predictive intelligence maintenance services, thus boosting demand and workload for workshops.
The increasing importance of software in the independent aftermarket requires a revision of skills and additional training for workshops, in which failure to complete will result in outdated procedures and an inability to meet the heightening demand.
An expansion in e-commerce will produce a call for price transparency and a focus on customer experience in the automotive aftermarket. The combined efforts of these factors are set to disrupt the aftermarket value chain. Garages must urgently move with the times in order to profit from these value shifts.
What can garages do?
To meet increasing demand, upskill our technicians, and offer a transparent, high-quality customer experience, it seems that we must fight fire with fire and use new technology to our advantage in the independent aftermarket.
In order to cope with the increasing technological complexity of next-generation vehicles, workshops must invest in training and equipment enabling them to cash in on shorter maintenance intervals and predictive services.
In terms of customer journey, garages should look to employ digital platforms and software to ensure customer experience is both fully informed and completely connected, making use of digital tools to focus firmly on quality customer service.
Lastly, workshops should explore ways to clearly position themselves versus competitors; consider what you provide and how, aided by digitisation, you can go above and beyond in terms of efficiency and customer service in comparison with those sticking to more traditional business methods.
For help with this, and for more information about how to effectively digitise your garage, and get ahead in the independent aftermarket, contact GaraShield today.