From 2020 to 2021, the global automotive aftermarket size grew from $380 to $408 billion in revenue.
It’s expected to grow at the compound annual growth rate (CAGR) of 3.8% and reach a forecast revenue of $529 billion by 2028.
There are two primary segments in this market, automotive replacement part suppliers and service enablers. With the digitization of these segments and the enablement of ecommerce stores (distributor portals), it’s expected that global expansion and investment in this sector will continue to rise.
The COVID-19 lockdown has impacted the product demand within this industry. The demand for commercial vehicle parts has started to decline whereas the demand for used vehicles and aftermarket auto parts has increased. It’s projected that the recovery of the automotive parts supply and demand will not be a typical V-shape as in the previous financial crisis, but rather a gradual recovery until 2025. This pandemic has brought some new factors that are the cause for this slow recovery, such as:
- Less vehicles on the road
- Less collisions
- Low use of public transport
- Significant increase of digital channels and ecommerce sales
With that said, let’s review one of the ways in which your company can ensure that your digital channels have the information and functionality it needs to stay ahead of the competition and support revenue goals. More specifically, does your business adopt the data formats set forth by Auto Care Association (ACA), and are there systems in place that allow cost-effective ways to aggregate and distribute rich product content to your ecommerce store and other channels? Let’s find out.
Understanding the ACA Data Standards
ACA serves the entire supply chain of the automotive aftermarket (manufacturers, distributors, and sellers). It provides advocacy, educational, networking, technology, market intelligence, and communications resources to serve the collective interests of its members. They possess expertise in each of the areas listed.
Within the ecommerce and technology space, ACA provides access to the most used standards in North America and best practices around its usage to help lower costs and increase efficiency. ACA provides the following data standards that help companies globally to communicate effectively between trading partners across the world:
- ACES – Aftermarket Catalog Exchange Standard
- PIES – Product Information Exchange Standard
- IPO – Internet Parts Ordering
- iShop – Integrated Shop Standard
- Super Spec
More specifically, regarding the ACES and PIES data standards, any company that wishes to do business in the Americas is required to adopt them, as well as their best practices. For this, the standard communication method adopted by all trading partners is a machine-readable XML. The benefits of using these standards are:
- Removal of duplicate communication and distribution efforts
- Saving time and cost
- Lower supply chain cost
- Increase product introduction and speed to market
- Contributes to increased sales, operational efficiencies and reduce returns
These benefits are similar to those that come with a Product Information Management (PIM) system in place. Let’s discover why.
The Importance of Utilizing a PIM to Support Data Standards
A PIM is a collection of processes supported by best practices that allow product managers, marketers, digital artists, and other key stakeholders to create, aggregate, manage, and distribute rich product content to multiple distribution channels. A PIM solution is a software application that allows users to configure workflows and perform activities such as create, aggregate, enrich, and distribute product content. It’s a collective mix of people, processes, and technology that provides the following benefits within the organization:
- Single source of truth to manage product information
- Improve data integrity and streamlined product enrichment workflows
- Improve conversions & reduce returns via integration to ecommerce channels
- Faster time to market the new and updated products
- Replacement of manual process with automated workflows and notifications
Since companies within the auto industry have to adopt the ACA data standards, it’s an extensive process to stay current and maintain data integrity. The industry is constantly updating vehicles, manufacturers, assemblies, and fitment, and coverage. Every time the data format or the rules/best practices change, the companies have to make sure to modify their internal templates and mappings to make sure they are in compliance.
Having a PIM system in place helps in managing data and costs much more efficiently and effectively. Workflows can help define tasks, accountability, and dependencies. Templates and mapping can quickly be updated within the tool and reduce exhaustive manual steps. Underlying data won’t need to get updated all the time since the field level mappings and the file formats will take care of the source to destination data accuracy.
It’s highly beneficial for companies managing the automotive aftermarket product content to leverage the power of a PIM system to bring operational efficiency, increase accuracy, and achieve faster time to market the product information onto the distribution channels. For more information about the benefits of leveraging a PIM system and your commerce strategy, download our guide, The Power of PIM: Achieve Experience-Driven Commerce With Product Information Management, and contact our PIM experts for more information.