Nic Carnell's blog: Are Amazon's plans to offer online car sales a challenge or an opportunity for the industry?
29 June 2017
Earlier this month, e-commerce leviathan, Amazon indicated it was planning to pilot car sales in the UK market as it started a drive to recruit car sales executives.
There appear no limits to the retail sectors that Amazon will extend it feelers into - perhaps cars purchased on the site will come with a hamper from Whole Foods?
As someone who has long campaigned for the car industry to catch up to a digitally minded consumer, there's no doubt that the platform is one that is known and trusted by consumers and an established way to buy and sell online.
And, with its scale and resources, it might also be well-placed to branch out into car financing or even leasing options. The brand recognition and trust that is enjoyed by Amazon can go a long way to break down the barriers for consumers making such a high value transaction online.
However, it's not a venture without risk, for the online marketplace, the motor industry or consumers.
Unless Amazon plans on turning over a huge volume of its warehouse real estate to stashing motors, waiting for a consumer to purchase that exact model online, it seems likely that they will look to build a network of relationships with manufacturers or car dealers to use the platform as an online shop window.
The issue then is, who owns the customer? For Amazon, they face considerable damage to their brand if there are issues with a car purchased via them. For the dealers and manufacturers, is the value and reach of Amazon really worth the hefty commission they will need to fork out and will they keep a customer touchpoint afterwards or is their relationship merely transactional?
Unlike a DVD, a car isn't something you can pop in the post if you change your mind. The platform works best when it is purely transactional - click, pay, collect. We know that with car purchases it is often more complex and a consumer will probably require more hand-holding.
Recently, we had a customer who had their heart set on a certain car but, due to issues with an insurance payout, in the end it took almost a month for them to complete the purchase and then just 48 hours for us to deliver that car.
This wouldn't have been possible if our team wasn't able to be in constant contact with the customer to reassure them that the car would not be sold elsewhere. Think you'd get that level of service with an online marketplace? Try finding a phone number for customer services first, then ask that question again!
It goes without saying that their returns policy has to be robust and consistent across cars, whatever their source. With hellocar, we offer a 7 day money-back/ guarantee but is this something that all manufacturers and dealers would be prepared to adopt?
Innovation in the industry and new ways to reach the digital consumer are always to be welcomed but must be properly thought out - throughout the customer journey. Although if the scale and dominance of Amazon's platform could be tempting to the industry, as way to shortcut the sales process, it could be a short term return rather than a long-term win.
By potentially devolving themselves of responsibility for customer service and detaching themselves from the customer relationship at the point of transaction, the industry risks losing the opportunity for long-term engagement, building their own brands and establishing an online presence of their own.
Nic Carnell is the founder of Hellocar.