When Lev Peker became CEO of CarParts.com in 2019, he immediately began making changes to the company, a digital re-tooling process that only accelerated when the pandemic hit the following year.
Today, CarParts.com has recorded six consecutive quarters of record sales and its CEO told PYMNTS about his plans to keep that momentum going.
“The pandemic accelerated a lot of trends and we are lucky to be in an industry that is benefiting from those trends,” Peker said.
Under Peker’s watch, the company has taken a new corporate name (it used to be called US Auto Parts Network), a new management team, and has streamlined 17 different websites into a single digital storefront.
The Way Forward
The newly overhauled website is mobile friendly and delivers a personalized user experience to consumers who are buying parts and repairing vehicle themselves.
To get those parts to customers faster, CarParts.com added a distribution center in Texas in 2020 and plans to open one in Florida in the first quarter 2022. With that in place, the company will cover 55 percent of the country with one-day shipping and over 98 percent with two-day shipping.
The company also resolved the “paradox of choice” faced by customers. Other websites offer many choices for each part, which can be overwhelming for the consumer. CarParts.com now offers no more than three choices; it offers at most a good, better and best and explains the differences.
“We want to replicate the customer experience of going to a store or a mechanic,” Peker explained. “There, a professional brings out the one that is best. Or, at most, a limited selection. We want to replicate that experience online.”
Payment Choice Matters
To facilitate purchases, CarParts.com also added PayPal’s Pay in 4 and is currently looking to add other providers of buy now, pay later (BNPL) solutions.
“Most Americans don’t have money saved for an emergency [auto repair],” Peker noted, explaining why the company implemented BNPL.
It also offers Apple Pay and Google Pay but says digital wallets haven’t been as popular. CarParts.com said less than 1 percent of its sales are B2B so its payments solutions are driven by the needs of consumers.
Like other retailers, offering a range of digital payments also facilitates and simplifies customer reimbursements when products are returned.
“If we guaranteed a part would fit a vehicle, we should take it back if it doesn’t,” Peker said, noting that its return rate was in line with industry averages.
Pandemic-Driven Trends
Much of Peker’s tenure as CEO has been shaped by crisis, although the pandemic has proven to be great business catalyst for this digital e-tailer which has seen improved demand for online auto parts and DIY repairs.
During the lockdowns, consumers had free time and spent it watching YouTube videos and learning new skills. Peker noted that a consumer can type in the name of any car or part and find many videos showing how to do a repair.
“That is leading a shift, with people saying, ‘Maybe I can do that myself.’”
Worried about COVID-19, consumers who used to take public transportation instead used a car they already owned or bought a used car.
The ongoing semiconductor chip shortage that has crimped new car production also led consumers to either keep their own cars longer or buy used cars instead. In either case, Peker said, older cars need repairs and more parts.
And, as in other industries during the pandemic, a lot of activities that had been done offline moved online. Peker noted that the auto parts industry is one of the last to be disrupted by eCommerce.
While overall eCommerce penetration stands at about 20 percent, in the auto parts industry, Peker said it’s less than 5 percent.
Given the size of this $20 billion industry, Peker added, “every percentage point is a big deal.”
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