How to Compete with Amazon – An Auto Dealership’s Guide6 min read

Audrey Moistner Administrator

Most car buyers in the U.S. prefer to start their car-buying journey online but want to complete the process at the dealership. Help them help themselves with the best online shopping tools, and kick Amazon competition to the curb.

 

Most car buyers in the U.S. prefer to start their car-buying journey online but want to complete the process at the dealership. Help them help themselves with the best online shopping tools, and kick Amazon competition to the curb.

 

Amazon seems intent on selling just about everything, including testing the waters to sell cars directly to the consumer. When news broke this summer that the online giant may soon start selling cars in the U.K., the threat of Amazon competition became all too real for auto dealerships in the U.S.

 

“The likelihood that Amazon enters the U.S. auto selling market is inevitable”

 

-Russ Chandler, Product Marketing Manager 

 

Because the auto industry is prime for market disruption. “It’s this huge market that is kind of in a bottleneck around dealerships and they’re slow to change,” he says.

 

Many auto dealerships have resisted consumers’ demands to list their inventory and pricing online, which essentially gave birth to third-party brands, such as Kelley Blue Book, Auto Trader, TrueCar, Edmunds.com, eBay Motors, and now Amazon. “Consumers wanted transparency, and dealerships refused to do it,” Chandler says. “It kind of backfired on them.”

Auto Dealers Must Change To Compete With Amazon

Before the online information explosion, car shoppers typically completed steps 1 through 10 of the buying process at the dealership due to limited information available elsewhere. Today, consumers use Edmunds.com, TrueCar and Kelley Blue Book as the main resources toresearch cars and get pricing quotes from dealers.

 

Chandler says some people are willing to do all 10 steps online and never set foot in a dealership, but he thinks most car buyers aren’t there yet.

 

“I think the majority of people are doing the first seven or eight steps online, and then wanting to complete the last two or three steps in the dealership. The test drive, finalizing the exact dollar and financing of the vehicle,” Chandler says.

 

“The majority of people still want to be in the dealership.”

 

-Russ Chandler

John Nalley of Spring Hill, Tenn., says he always researches online before buying a vehicle to narrow down his choices for brands and models, and he leans heavily on Amazon competitor Edmunds.com, which gives detailed reviews and reports on vehicles. But his large, 6-foot-4-inch frame dictates he test drives a vehicle before buying.

 

“Years ago, we purchased a minivan for the family, which I ended up loving because it gives me the most legroom and headroom of any vehicle I’ve ever owned,” Nalley says. “But legroom and headroom are something you can only determine once you physically sit in the vehicle and drive it around. Manufacturers post numbers, but I’ve found those numbers don’t always match reality once I sit in the vehicle.”

Competitors Of Amazon Need To Guide Customers, Not Sell To Them

Our research shows consumers prefer a simplified car shopping experience that offers personalized information and transparency on a car dealer’s website, much like how Amazon treats its website customers, Chandler says. But he cautions auto dealers to avoid putting anything on their websites that consumers consider to be misleading or resembling a lead trap.

 

Instead, auto dealers need to focus on self-guided research and shopping tools, such as PERQ’s Web Engagement Software, that help guide the buyer through the process without requiring the involvement of a salesperson.

 

“To most people, you’ll have a much better chance of influencing and capturing their information if you just help them help themselves,” Chandler says. “Think more kiosk model, or more Amazon. They offer a lot of things that guide you through their process, and at no point are they trying to connect you with an Amazon salesperson unless that’s really what you need.”

 

The idea that some auto dealerships may ultimately decide to partner with Amazon isn’t much of a stretch in Chandler’s view, with Amazon competitors like AutoTrader, Edmunds.com and Cars.com already carrying inventory from multiple dealerships in the same market to produce leads and traffic for those dealerships. He compares it to ordering something online from Amazon, but a local business is actually fulfilling the order.

 

“I don’t think that’s much of a leap at all,” Chandler says. “It seems like a better medium than having Amazon try and take over the whole process as almost a franchise dealer themselves,” he says.

“Obviously, Amazon is a disruptor in every industry, which I don’t think is a bad thing,” Underriner says.

 

“I think that we, as dealers, need to be more transparent and welcoming to customers, and make sure that we’re selling in the way that they want to buy. It’s a relationship business.”

 

Chandler could not agree more about nurturing those relationships with consumers, “As intriguing as it is to buy a car completely online and have it shipped to your door, the vast majority of people just aren’t there yet,” said Chandler. “There is still a lot of assistance that’s necessary from a salesperson. It’s a matter of helping to find that sweet spot of answering a shopper’s questions online and guiding them into your dealership.”