Hyundai’s Going Deeper With Amazon And Alexa, And Car Shopping Sites Should Be Worried
Hyundai is the first carmaker to launch a digital showroom on Amazon.com’s Vehicles hub. Let the disruption begin.
Before anyone who despises the car dealer experience thinks that you’ll be able to buy a car completely through Amazon.com any time soon, think again. After a car shopper hits the Hyundai page, or any of the product pages for Honda, GM or the other manufacturers that have joined the site, the would-be customer is linked to the inventory of a local dealer who can then hook you up with the car you want.
So, for now, dealers are not the ones being disrupted. But the many car buying sites–like AutoTrader, KBB.com, Cars.com, TrueCar.com, etc.–out there are going to increasingly feel the pinch on their business models.
Car buying sites realize a good portion of their revue from generating leads for dealers and car manufacturers, as well as selling ad space on their sites. Each markets itself as being the destination for car shopping, and each tries to outdo one another on search-engine-optimization (SEO) so that when one of 17 million new-car shoppers and about 20 million used-car shoppers a year Google’s “2018 Honda Civic,” they come up highest in the search results.
Indeed, when I Googled “2018 Honda Civic,” the first organic results were Honda’s own model pages on Honda.com. After that, in descending order were Honda Civic pages on Cars.com, Edmunds.com, MotorTrend.com, CarandDriver.com, TheCarConnection.com, CNET.com, Kbb.com.
Amazon.com is the tenth most popular website in the world, and fourth most popular in the U.S. after Google, Youtube and Facebook, thus making it the number-one merchant site in the U.S. and second in the world after China’s Toabao, according to Alexa Internet.
The Amazon Vehicles portal was launched in 2016 and visits have been growing as it provides extensive product information, comparisons to competing models, links to local dealers, “news and accolades,” recall information, etc.
Hyundai’s Vehicle Page goes further by providing links to showroom test drives, a pricing calculator, and more; plus, Hyundai’s in-car telematics system BlueLink is connected to Amazon’s virtual assistant, Alexa. Hyundai owners can access just about everything Alexa has to offer in their car. And when someone, for example, asks for the nearest ATM, Alexa will put the location on the car’s navigation.
Hyundai is moving to be an early adopter of Amazon’s aspirations in assisting in car purchases. “Over time, as consumers learn that Amazon has an auto section worth utilizing, the traffic [will] continue to grow. We think that Amazon autos will become the No. 1 auto research destination you can go to online,” Hyundai chief marketing officer Dean Evans told Automotive News.
Too, while Amazon and Hyundai can curate reviews from journalists, Amazon’s community of users are free to leave their reviews of the cars and their experiences, a feature that has become valuable to Amazon shoppers in every other category the merchant portal deal in.
For Amazon’s part, it wants to become the most customer-friendly shopping site. Hyundai presents its pricing under its “Shopper Assurance” umbrella, which says it presents only legitimate pricing information including rebates and incentives.
Hyundai is no stranger to trying new things with Amazon. In 2016, the South Korean automaker marketed on-demand test drives whereby Amazon customers were able to reserve 45-minute test drives through Amazon Prime Now, with the car delivered to their door, workplace, cafe, etc.
The real threat in all of this is not to dealers, whose distribution of new vehicles is protected by state franchising laws, but to shopping sites that can’t match Amazon’s brand power. On Amazon Prime day this week, the site sold 100 million products in one day, and it has over 100 million Prime members. The power of Amazon Prime, which has been decimating the traditional department store and mall industries, is the saving of time for consumers. As Amazon keeps adding services and products to its online catalogue, consumers deepen their relationship with the site as their default merchant to save time. Additionally, Prime members believe they are getting the best prices available–a serious advantage in the car buying space where lack of trust about pricing is a huge issue with consumers.
How deep is Amazon driving its brand? A growing trend among Prime shoppers: ordering their staple and non-perishable groceries from Amazon, such as toothpaste, paper products, toiletries, pet food, etc., and leaving just the purchase of fresh food for local stores. A consumer that increasingly defaults to Amazon for something as stressful as a car purchase is not hard to imagine.
Online car shopping sites can collect a few hundred dollars per vehicle for their leads and conversions from shoppers to buyers. To Amazon, that’s real revenue for Amazon to be chasing considering the market share it could grab.
The overall Internet car shopping market looks like this, according to J.D. Power & Associates: The most frequently accessed content on automotive shopping websites are model information (89%), vehicle pricing (88%) and photo galleries (81%). Automotive internet shoppers find that automotive brand sites are most useful for their model information, vehicle configurators and photo galleries, whereas dealer websites are found to be most useful for inventory searches. Vehicle pricing and third-party sites are most useful for vehicle ratings/reviews and vehicle comparisons.
Amazon fits into that last bucket of websites. And given the increasing penetration of Amazon into our shopping lives, there is bound to be a coming shakeout of designated third-party shopping sites.
“Alexa, tell me all about the Hyundai Kona.”
Read the story on Forbes.com.