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Jared Hamilton
From: Jared Hamilton
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Joe Orr

Joe Orr President / CEO

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You Might Consider Becoming the Amazon in Your Area… And Fast!

By now, I’m sure you’ve heard about Amazon’s entry into the automotive world… something I predicted quite a while ago and covered in previous blogs.

For the moment, Amazon is functioning as simply a new research portal where consumers can find information and communicate with each other about vehicle models, features and reviews. However, this is simply stage one. Amazon is a VERY successful and trusted brand and will eventually seek to monetize this operation. How they choose to do that or, better yet, how they choose to EVOLVE this service remains to be seen…. but I have my ideas.

Speculation and opportunity run the gamut from becoming a third-party lead provider, to partnering with OEMs (for example, the Hyundai partnership currently in operation whereby Amazon Prime delivers an Elantra to consumers for a weekend test drive), to perhaps a dealership direct subscription model where dealers pay for branded geographic areas. There is even a scarier platform potential that I won’t share quite yet.

Regardless of which path is taken, OEM and dealer-specific ads are already appearing on vehicle information pages delivered by third party advertising networks. So Amazon is already actively collecting a little money through those partnerships.

However, right now, Amazon is simply in an information provider mode.

Because reviews are an important piece of the information that Amazon provides, I did some research on this and discovered that in fact, reviews for vehicles go back as far as March 2016. As this service was officially launched on August 25, 2016, I was curious to know how these individuals left reviews and whether they are legitimate. Through a quick, brief investigation of reviewers, I came across one reviewer of a 2016 Toyota Camry who also left reviews for a 2012 Chevrolet Volt, a 1989 Toyota Corolla, a 2016 Toyota Camry and a 1991 Toyota Previa, all in a 3-hour time period! Whether this is a case of false reviews, or simply an over-ambitious reviewer, is yet to be determined. Regardless of which, the biggest key here is that everything is done under the Amazon branding. However, I do not believe Amazon would want to open their brand to any criticism if false reviews permeated their platform.

What does that mean for dealers? For many years, Amazon has been the innovator as far as making the whole buying process easier for consumers – from two-day delivery, to next day, to one-hour delivery – Amazon is completely focused on being the go-to source for everything a consumer could want, be it groceries, liquor or restaurant orders delivered direct to their doorstep in under an hour in some cities!

Amazon’s entry into the automotive world is not unlike their disruptive entries into these other markets. I am sure their ultimate goal is for consumers to ONLY BUY GOODS THROUGH THEIR WEBSITE AND APP! So given this fact, wouldn’t it be logical to conclude that Amazon’s long-term play is for consumers to buy cars through their e-Commerce site – even if they choose to own brick-n-mortar stores?

I’ve been tracking this progression and have warned dealers for quite some time now that this was coming down the pipeline. It really is time to get better at the whole online vehicle selling process!

Collectively, we must continue to earn back the confidence and trust of the consumer, or be subject to a massive change in one of the greatest industries in the World. Remember, today almost every business thrives or dies depending upon the consumer demand. Today they demand convenience, simplicity, trust and a friendly environment. Amazon has it all and now, so can we – it’s all about relationships and delivering the experience today’s customers want!

You need more than just a third party app. I believe that a very high percentage of car buyers still want to communicate with a trusted advisor at a dealership. Do you offer your customers an online buying experience that actually converts, that consumers embrace and which enables you to retain your fair profits?

If you want to be competitive, now and in the future, you must give people what they want -- which is very simply an Amazon-like car buying experience. So, I strongly suggest that you get ahead of the competition and, just as importantly, protect this industry for our future generations. Start giving it to them now before Amazon beats you to the punch. It is inarguable that that is the direction.

Cheers to the greatest business in the World today! Let’s preserve it and better yet, enhance it for all.

Joe Orr

Dealer Guy, I appreciate your input / outlook and 100% agree that we as a dealer body must protect our earned margins (this is a business after all) but maybe there are other opportunities that are unveiling themselves via all these new 'wall street' companies that are emerging and jumping into auto sales. I believe we as an industry will go through the largest transition in automotive history (since the internet itself). I also believe it will be a very positive evolution for those dealers that contemplate the real opportunity that is ahead. I am excited for our industry and our dealers. I feel for a myriad of reason this next evolution will create a greater profitably and simplify our entire operation.

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