How Amazon Impacts Dealerships and Consumer Behavior

How Amazon’s Influence Impacts Dealerships and Consumer Behavior

Decades ago, Amazon started as an online bookstore, growing into a giant that reshaped how we shop. Log onto the site today, and you’ll find anything, from clothes to cleaning products – and even cars. Customers prefer a simple, instantaneous shopping process, with same day results in some cases. This is known as the “Amazon Effect”, because it’s quickly changing customer purchasing behaviors. The Amazon Effect has led customers to value an online experience with thousands of especially accessible options.

Dealerships must understand how Amazon is changing customer expectations. Without adapting, dealers risk falling behind. Buying cars online isn’t a new concept – companies like Carvana use next-day vehicle delivery or pick-up to meet demands. How are these online experiences impacting consumer behaviors and dealerships?

What Makes This Online Giant Successful?

The success of Amazon relies on simplicity and personalization. It’s evolved into a marketplace where online shoppers can find anything at the click of a mouse. Customers also get fast shipping, personalized recommendations, and easy returns. These features make Amazon the ultimate model for convenience.

However, Amazon goes deeper, using neuromarketing tactics to understand and predict customer behaviors. In summary, neuromarketing is cracking the consumer code of preferences, motivations, and decision-making. This code impacts ad placements, pricing, and other incentive areas. Amazon also uses color psychology, personalized ads, and product recommendations based on marketing data they collect. The method clearly works: more consumers begin a product search on Amazon than search engines like Google.

How Do Customer Expectations Impact Vehicle Shopping?

Convenient online shopping is so common that consumers want the same experience when buying a vehicle. Customers want the ability to research, compare prices, and buy online without having to visit a dealership. 95% of car shoppers rely on online information to start the buying process, skipping the dealership as a starting point. Amazon’s transparency and speed makes many expect the same from dealerships, and the traditional dealership model is under significant pressure to adapt to these changes and expectations.

Dealerships also face challenges related to customer retention over time. With the rise of online shopping, customers are no longer limited to the inventory at the dealership closest to them. A recent study by Quantrell Subaru surveyed customers online, and many would drive over 400 miles to get the exact vehicle that they want. With the option to get pre-approved and start the vehicle buying process online, it would be incredibly difficult for a local dealership to compete. This creates disparities between consumer expectations and what dealerships can offer, creating customer retention concerns.

Amazon’s Automotive Initiatives and Services

While Amazon sells vehicle parts, accessories, and tools through its platform, it is now expanding its reach by partnering with auto brands and online automotive shops. Amazon Autos even allows customers to browse, finance, and arrange the delivery of Hyundai vehicles on the online platform – a completely online transaction that ends with picking up a vehicle at a dealership location.

What Does This Mean for Dealerships?

Overall, Amazon has made shopping more convenient for consumers with a focus on lower prices, quick delivery, easy returns, and a huge product selection. This has changed what customers expect, pushing industries including automotive dealerships, to adapt. Customers want a seamless, user-friendly experience, fast delivery, and easy price comparisons, just like they get on Amazon.

With consumers seeking online convenience, transparency, and ease of purchase, dealerships must address this to remain competitive. Dealerships must offer a seamless online experience and allow customers to complete the buying process remotely, including financing and trade-in evaluations. However, they should also continue to provide exceptional in-store service and a positive, personal experience to attract and retain customers after the initial vehicle sale.

Evolving to Meet Customer Expectations

The huge influence that Amazon has continues to change and evolve how customers shop. In the future, it will be necessary for dealerships to rethink how they sell vehicles and market their benefits to consumers with myriads of purchasing options. They will have to gather more customer data, analyze it, and use personalized print and digital marketing to attract vehicle buyers, F&I customers, and service drive visitors. By doing so, they will be better prepared to compete and be successful as the world of shopping changes and evolves.

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