21 November 2016

Is Amazon the real online elephant in the room for auto retailers? The Internet giant’s growth from books to, well, almost everything else has been the subject of many discussions in recent years. No longer a benign, friendly company, its expansion into once non core activities has caused many a retailer to worry about its very existence. 

Booksellers might be an obvious example, but lately Amazon has been taking bites out of the food retail industry. Predictably this started in its homeland, but the basic premise – order online through the Amazon website, receive your purchases the same day – has proven appealing to customers and a source of concern for established rivals. Our news that Morrisons’ fortunes have improved following a strengthening partnership with Amazon, includes the tit-bit that same-day grocery deliveries will be rolled out to select parts of London. That sound you hear is Tesco, Sainsbury’s and Asda management furiously chewing their nails.

It’s true that Amazon has sold a growing selection of grocery items for a while. And it’s also true that its sold an expanding selection of car accessories and consumables for some time. You know where this is going, don’t you? The company’s occasional dabble into car retailing has centred on limited edition models in a handful of territories. News that it’s embarked on a larger project to sell three Fiat models through its Italian website at considerably discounted prices is unlikely to please local retailers.

The bigger question, and one that Amazon so far refuses to answer, is if this activity is little more than a hobby or part of a slow burning plan to enter auto retailing on a grand scale. Amazon’s influence and buying power is legendary within retail circles, which poses the question; if it decided to fully commit to the auto retail space, would it threaten to destabilise the entire market – retailers, OEM web businesses and aggregators?

Although a hypothetical scenario at present, this doomsday view is something booksellers have already faced and only the fittest or more creative have survived. Another negative view would be to resign yourself to becoming a ‘click and collect’ partner service. Although that option doesn’t seem to be hurting Morrisons. Food for thought, perhaps?

Iain Dooley

Editor, Agenda

Auto Retail Network

Tags: Amazon, click and collect, Fiat, internet retailing, Morrisons, online