One of the staples for service department is tires, including sales, mounting, balancing and alignments. Tires are a price leader for your dealership and a great way to get customers in, providing you the opportunity for additional service work revenue.
Well, what if your customers no longer need to buy tires from your dealership? What if they could simply go on Amazon and buy them cheaper – just like everything else on Amazon? Cheap doesn’t mean easy though. Who wants tires delivered to their home or office, where they must pack them into their vehicle and get them to a service station to be installed? Here’s the deal…Amazon has just solved the EASY part of this equation. Now they own a cheap and EASY way for customers to order tires and get them installed.
How can Amazon, an online retailer with no physical stores, compete with your service department?
Easy, they partnered with Sears Auto Centers! Amazon tested the partnership at 71 Sears Auto Centers this winter/spring and have already expanded it to well over 150 locations nationwide. Now, customers that order parts on Amazon, including tires, can have them shipped directly to their local Sears Auto Center for installation. Not only is it super convenient for customers to order parts, the clear majority of Sears Auto Centers are located right next to a mall. Customers can drop their vehicle off, go shopping at the mall, or have lunch, then pick up their vehicle as part of a convenient day of errands and activity. This is a very different experience to waiting at a dealership or having to get transportation to and from the dealership, which is usually on dealership row, away from easily accessible fun activities for customers.
Naysayers may discount the importance of this development, but they shouldn’t. With the acquisition of Wholefoods, Amazon has proven it’s no longer happy staying purely in digital e-commerce. And, while Sears was a retail giant last century, they have closed hundreds of stores over the last decade. I read about their financial troubles all the time and Amazon could easily buy Sears, or even just Sears Auto Centers, and create a whole vehicle service network to compete with dealerships.
Amazon is pushing even further into the bricks and mortar retail world. In fact, it recently announced that Amazon Prime members (which account for a whopping one-third of United States citizens at 100 million members) can now enjoy a healthy 10 percent discount on Wholefoods’ purchases.
There’s a reason behind everything Amazon does. It’s calculated, and they don’t care whether they disrupt or destroy a whole industry. And, it appears, it isn’t slowing down on its entry into the automotive industry. From parts, to at-home repair services — and now tire and parts sales installed at a Sears Auto Center retail location — the path ahead can only lead to more disruption in the auto service industry.
How are you as a dealer supposed to counteract this? The only way is to ensure customers choose your dealership for service work and tires is by providing a superior customer experience. As dealers, you must start looking at all your services the same way Amazon looks at things – from the customers perspective! You must analyze every step in your service process, remove the friction points and be extremely CONVENIENT for your customers.
The times they are a changing. The time to get ahead of the competition is now – well actually it was yesterday. But, if you act now, you can create your own superior customer experience and avoid the fate so many other retailers have suffered thanks to Amazon’s disruption.
Sales alone will only get your dealership so far. You need to retain your other profit centers to remain viable, both financially as well as in the minds of your customers.