Internet is 20 to 30% of Car AV Market

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The Internet now represents about 20 to 30 percent of the car electronics aftermarket as a ballpark estimate, said several industry members we polled last week.

Car audioSome vendors said the figure was lower, at least two industry members said the figure was higher, but others said the range is a good working estimate.

The figure is higher than that of general consumer electronics sales, according to the Consumer Electronics Association (CEA), which predicts the Internet will account for 13 percent of CE sales by Q4 this year, up from 12 percent a year earlier.

Industry members also note that sales may be higher on the Internet than are officially reported, as some products that are sold into retailers, are then moved  “sideways” on the Internet.

A number of facts about Internet sales, some of which were highlighted during KnowledgeFest last week, bear repeating:

In Q2 of this year, Internet retail sales in the U.S. climbed 14 percent over the previous year to $37.5 billion. This compares to sales of $27.1 million in Q2 of 2007. Consumer electronics was the top performing category, according to comScore.

59 percent of people shopping online start on a search engine, and 90 percent of those are seeking out a low price, said John Haynes of Al & Ed’s during a seminar he led at KnowledgeFest.

Amazon does almost $8 billion in annual sales of consumer electronics, which has become a top category for the Internet seller, reported TWICE magazine.

As of March 2010, a CEA study found that 32 percent of consumers prefer to shop for in-vehicle technology online. And 32 percent polled prefer to shop at a car stereo specialist (compared to other outlets such as a general electronics store or mass merchant). The CEA estimated that by this year, those preferring to shop online will surpass those preferring to shop at an electronics specialist.

Amazon has the largest global audience of the shopping sites. Amazon received more than 282 million visitors in June. representing 20.4 percent of the global Internet population. The runner up is eBay with 16.2 percent of Internet visitors, says comScore.

Suppliers at KnowledgeFest encouraged specialist retailers to beef up their Internet presence with a web site that is updated frequently and delivers a one paragraph message on why your store is different from the guy down the street.    Other suggestions: post YouTube videos of your installs, buy Google Adsense ads and advertise on Pandora, Sirius XM, Twitter or on other non-traditional media outlets.

Source: CEoutlook

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7 Comments

  1. It is truly amazing that this info came out of Knowledgefest….the same venue that is owned by the internets’ best friend for 12 volt….Installer Net !
    We are being sold a bill of goods that ‘Well, at least you still get to make some money on the install’….they are aiding and abetting the sale of Brand mdse by offering a way to have it installed….Then they throw a ‘KnowledgeFest’ at us to hide their shame. Any one come up with a number on how many installs ‘Installer Net’ aided for EBay and Amazon….Just a wild guess….We won’t see those numbers.
    I may be a little cynical about this, but….why not?

  2. It all starts at the top (manufacturers). Any manufacturer who allows their product to be sold at (or sometimes) below dealer cost online ABSOLUTELY DESTROYS any chance a retailer has at builder trust with a consumer. It’s a rather difficult thing to get 200% more money from that same consumer. I would guesstimate online purchases are a minimum of 30% and likely closer to 50%. It’s not a problem explaining the quality difference of a $100 1,000W amp to a $500 1,000W amp, that’s rather easy. But telling that same person to give me $500 for that better amp versus the $239 shipped to his door TAX FREE is another story.
    +1

  3. I agree with you all, and we’ve all addressed it before. My biggest beef with this article? Why is it even posted and emailed to us? A ‘guesstimate”? I can guess all day long about what business I’m not getting because of the internet, and I don’t think having anything less than hard numbers and bonafide sources is worth printing and telling us in such obviousness.

    Let’s get back to providing some REAL useful industry information here Amy, stop emailing us the fluff articles that really have no relevancy to anything called “our business”.

  4. It all starts at the top (manufacturers). Any manufacturer who allows their product to be sold at (or sometimes) below dealer cost online ABSOLUTELY DESTROYS any chance a retailer has at builder trust with a consumer. It’s a rather difficult thing to get 200% more money from that same consumer. I would guesstimate online purchases are a minimum of 30% and likely closer to 50%. It’s not a problem explaining the quality difference of a $100 1,000W amp to a $500 1,000W amp, that’s rather easy. But telling that same person to give me $500 for that better amp versus the $239 shipped to his door TAX FREE is another story.

    Oh, it might break and not be under warranty you say. How about he can buy another brand new amp if it does and still be a few lunches ahead. I submit avoid any manufacturer that allows their product online.

    Oddly enough, with the drastic decline in head unit prices and the little markup in the head unit category, our sales have been increasing in that category. Now I just need to figure out how to keep the doors open on 18% gross profit. Yuck.

  5. The analysis does not address the root causes, and therein lies the rub. They buy online at least in part because they do not trust the specialty retailer, have had a bad experience with one, or have no understanding of why 1 amp is $400, and another rated the same power is $99. Our failures as an industry are stunning. And still we claw away at what is left of the market. Reducing prices, and profit margins, and doing nothing to stop the hemmoraging. The internet is, and always will be a major factor in our business. But it doesn’t have to be a killer. We are letting it be.

  6. Well… That number seems low to me. If is true as reported that better than 80% of consumers at least research their purchase intentions on line AND 90% of those are looking for a lower price it seems to me that the actual purchases that occur on line is likely to be higher than 25%.

    That being said the Internet is NOT A BAD THING in and of itself. What is BAD is the surprise that brick & mortar retailers are faced with when they realize their consumers are purchaseing brands that the brick & mortar retailers are endorsing and authorizing their consumer to buy, on the Internet. This, after the manufacturers are assuring the brick & mortar retailers about their “strict” Internet and MAP policies.

    Then manufacturers lament the decline of the brick & mortar installing specialty retailer. I wonder why a brick & mortar retailer would take any inventory risk at all when he can’t be sure his selling and education efforts will be rewarded buy an actual sale to the consumer. Instead it seems to me that the retailers feels more like an information and confirmation source as opposed to a product source.

    A brand who takes time to manage the Internet and informs the brick & motar guys of what to expect of that brand on the Internet is a GOOD thing. In such an environment a brick & mortar guy can make informed decisions.

    Manufacturers: Take control.

    Retailers: Depend on brands who take control.

    Ray Windsor
    German Maestro

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