CarParts.com is making bold moves to expand its reach and reduce marketing costs as economic challenges impact its traditional customer base. Historically catering to cost-conscious consumers through paid search advertising, the online auto parts retailer saw a significant escape in spending throughout 2024. In response, CEO David Meniane announced a strategic pivot during the company’s latest earnings call on March 25.
Despite these efforts, CarParts.com reported a decline in financial performance. Net sales dropped from $675.7 million to $588.8 million, and gross profit fell from $229.4 million to $196.7 million. Gross margin also dipped slightly from 33.9% to 33.4%. While sales were below expectations, Meniane noted that gross profit and margin remained near the upper end of guidance.
Expanding the Customer Base
To counter declining revenue, the company is diversifying its product range and scaling its wholesale operations. Key investments include last-mile delivery solutions and a more personalized B2B sales approach. Additionally, CarParts.com launched a premium paid membership program, already attracting 3,000 members. Meniane expressed confidence that this initiative will improve long-term profitability.
Driving Mobile App Adoption
CarParts.com is also strengthening its digital presence. The company is focusing on improving its website conversion rates, enhancing search engine optimization (SEO), and driving more traffic to its mobile app. The app, which has amassed over 800,000 users in under 18 months, now accounts for more than 10% of eCommerce revenue.
As part of its transformation, CarParts.com recently announced an investigation of strategic alternatives, including a potential sale. While no details have been disclosed, the company’s board is leading the process with financial and legal advisors.
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