My first reaction to Amazon’s recent release of their Vehicles department was, “Wow: The absolute last thing the world needs right now is another automotive research portal.” Because, really, that’s all that Amazon Vehicles is at the moment: a research portal chock-full of vehicle information, but devoid of any inventory. As a consumer, my first reaction might be, “This is great info, but where’s my One-Click order button?”
Although I doubt we’ll see drones flying in a 3,000-pound sedan for curbside delivery any time soon, Amazon’s surely taking a methodical approach to eating up a chunk of the very lucrative, and insanely frustrating, auto purchase process. The company will do so by leveraging its core strengths, which, in my opinion, no other retailer or entity, online or brick-and-mortar, can touch.
These strengths include a unique nexus of user base, consumer data, and data mining capabilities, all at an almost unmatched scale. Companies like Google and Facebook come close, or even surpass it, in areas like user base and overall wealth of personal data, but neither of these companies have the purchase transaction history. Wal-Mart and Target have data warehouses full of purchase history for millions of consumers, but lack the online omnipotence.
Amazon has 300 million active users and 35 million users who have stored their vehicle information in Amazon Garage, myself included. From a scale perspective, 300 million users is dwarfed by Facebook and Google, but is an order of magnitude larger than the largest consumer portals in automotive.
As this Motley Fool article points out, Amazon Vehicles could ultimately have a negative impact on TrueCar’s fortunes. I’d argue that the same could hold true for Cars.com, Autotrader, Edmunds, etc., if, and when, Amazon expands beyond research into its bread-and-butter capabilities of product inventory listings.
For anything transactional or purchase-related, Amazon has everyone beat. They even have product reviews for millions of products that I, for one, usually find very helpful. The amount and diversity of purchase information, and the wealth of product information within Amazon, puts the company in a very strong position over the long term.
Sure, you might say, what does ordering a book, some toothpaste and a TV have to do with buying a car? Everything. Amazon has the capabilities to determine patterns in large data sets where a human on his or her own would never be able to see them. A person can only look at so many data points, but a computer can look at millions or billions and look for meaningful patterns in all of the data.
Remember also that Amazon is the company that was issued a patent for predictive shipping, which is just a complex way of saying Amazon could ship you items before you order them – or even before you know you need them.
The Vehicles experience may be underwhelming at the moment, but the long-term potential is not in the user interface, or even in the vehicle info because let’s be honest, you can find that information on hundreds of other research sites. Instead, Bezos and company’s competency is making the shopping process as seamless, and as painless, as possible so that shoppers never want to go anywhere else…perhaps even for the second-largest purchase of their lives.