By Mike Chung, director, market intelligence, Auto Care Association
Never have I ever … missed an AAPEX
Never have I ever … seen so many DIY pleas for help
Never have I ever … seen so many delivery delays
“So much has changed” is an understatement. Our last in-person AAPEX was held a year and a half ago and since then, we have seen the world change. A year ago, we were adjusting our seatbelts as we watched key indicators like vehicle miles traveled (VMT) change amidst an environment of home offices, remote education and activity restrictions.
Resilient Society and Technology
Since the first detected COVID-19 cases in the United States, innovation has been tangible in myriad ways – to name a few:
- Video conferencing technology has seemingly reached all U.S. homes (take a trip down memory lane here)
- Vaccines were developed (here and below)
Society has (generally) complied with changing restrictions and requirements, even if they were unpopular and imperfect. Whether adjusting to mask, distance and disinfection requirements, many people adjusted their behaviors as best as they could, recognizing that we were building the plane while flying it.
Our own industry responded with agility and “can do” enthusiasm, with factories, distributors, repair shops, warehousers, installers, retailers and everyone in between modifying processes, production timelines and communication patterns to adapt to a dynamic work environment and economy.
Learnings Along the Way
2020 was more than the year of Zoom – it was also the year of the webinar. As each month of the pandemic advanced, aftermarket leaders asked numerous questions, including:
- How is this year going to end? Will it really go down 8.8% as forecast?
- What is happening with VMT? When will it go back to normal levels?
IHS Markit produces the channel forecast model, the results of which are published in early June (i.e., coming soon). Given the numerous jolts to the economy, the importance of testing and considering each model input would become more critical for this year’s analysis. One interesting point that IHS aftermarket leaders shared was that VMT was not simply a catch-all for the light vehicle market – rather, VMT patterns of non-essential workers evolved as distinctly different from those of essential workers.
Throughout the year, we saw DIY activity climb (raise your hand if you engaged in a home improvement project that you ordinarily would not have done last year) along with parts and accessories purchases via online channels. Statista reports that 9% of U.S. consumers transacted online for the first time in March 2020 due to physical distancing and self-quarantining practices. Similarly, the average number of new online shoppers rose by 12% in the United States, Canada, Australia, Mexico, and Argentina between March-April 2020.
What will the future hold? Statista similarly found that 37% of U.S. consumers expected to increase online spending due to the pandemic. With the “first time” hurdle now cleared, the stickiness of e-commerce will be even more important for retailers and providers. eMarketer estimated that more than 7 million new ecommerce customers would emerge as a result of the pandemic. As illustrated below, the number of 45+ year-old individuals purchasing online at least once in a year is expected to continue growing in the next three years, toward 100 million in the United States.
As our industry (and others) watch how things unfold in 2021, I am confident that we will continue to not only adapt, but also learn from one another in a spirit of collaboration and mutual benefit. We continue to experience the unexpected – seemingly on a weekly basis – and respond as best as we can. After all, if we can survive, even flourish during a pandemic, supply chain disruptions, materials shortages and other “setbacks,” then I am confident that the aftermarket will continue to prove itself as a resilient industry.
A few weeks ago, I visited my local public library for the first time since the pandemic started. For reasons I cannot explain, I checked out a light fiction novel about a suburban mom’s adventures as class mom to her son’s third grade class (I’ve already shared too much). One of her dinner outings involved a game of “Never have I ever” with another couple.
Imagine the stories that will come at AAPEX in November: Never have I ever imagined our company would have to … Never have I ever extended payment terms because of a ship stuck in a canal halfway around the world … Never have I ever had to comb my hair before a conference call.
Aside from meeting new people and reuniting with others (“You haven’t aged a bit! Are you taller now?”), imagine the vignettes you’ll share with others and gain from newfound wisdom and relationships. No matter how instrumental technology has been to get us this far, you just can’t beat a face-to-face meeting. See you in Vegas! Registration is now open.
Mike Chung is director, market intelligence at Auto Care Association. With more than a dozen years of experience in market research, Chung provides the industry with timely information on key factors and trends influencing the health of the automotive aftermarket and serving as a critical resource by helping businesses throughout the supply chain to make better business decisions. Chung has earned degrees in chemical engineering, environmental health and business administration. He can be reached at email@example.com