Amazon has Auto Shops Worried
Recent news reports from AOL and related industry buzz suggest that Amazon is poised to enter the auto parts replacement business — and local repair shops should be worried.
While many of us have focused on Amazon’s online retail dominance, and its more recent foray into groceries with the acquisition of Whole Foods, the auto world might also present a tasty new target for the online juggernaut.
Here’s why: Cars and related maintenance are a bigger cash drain for the average American household than groceries, says the U.S. Census Bureau. What’s more, while online sales of auto parts are still relatively small, they’re growing at 16% per year — which is much more quickly than traditional channels.
And get this, the New York Post has reported that Amazon has inked deals with a number of new auto parts vendors.
Connecting the dots, top companies like AutoZone and O’Reilly have reported lower sales this quarter.
AOL says: “Nicholas Farhi, an automotive services consultant at strategy firm OC&C, thinks car repair could be Amazon’s next move. The company has already begun to offer various standard installations and fixes through its larger home and business service arm.”
Here’s how it might work according to Farhi: “Amazon is likely to enter into car services—annual maintenance, broken windshields, replacement tires, etc.—before sales of the car itself.” He added: “The consumer experience of buying automotive services is a mess, and the suppliers are fragmented.”
So, for example, if you were to order a car radio or battery through Amazon, conceivably it could arrange for installation at your home by virtue of your zip code, or send you to a related Amazon partner establishment.
Now that’s a “prime” new market for Amazon and its customer base.
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