Our blog: Amazon and Volvo: what does it mean for the retail trade?

  30 May 2018 - 7:00am |    Jack Carfrae

A threat or an opportunity: what is the trade to make of Amazon and Volvo’s tie-up for immediate test drives?

Sure, it’s an experiment on a tiny scale, allowing Amazon customers in just four cities over the next several weeks to book a slot and have a V40 delivered to their doorstep for a quick spin, accompanied by a product genius. Should they want to proceed further, they are handed over to the local dealer.

On the one hand, you could argue that it’s good on two fronts. Such convenience should generate goodwill and a warm feeling about the manufacturer who appears to be trying harder to please. It also saves the dealer time and effort in arranging the test.

Alternatively, you could say that (a) it removes, by one step, that relationship between customer and dealer, (b) it lets Amazon near the UK new car market and (c) it shows the willingness of a manufacturer to let them into their distribution process.

Volvo is not alone. We know Mazda trialled a similar operation within the M25 and no one has yet said that is the end of it.

This is the kind of thing that would keep me awake at night if I ran a dealership. As one such person said to me this week, taking a car to a place and a time convenient to a potential customer for a test drive is what they do anyway – so what’s the difference?

The difference, I would argue, is that very few dealerships can afford to do that, to have staff and demo cars running around on what may turn out to be a dud. The other is that Amazon has become the giant it is on the promise and delivery of convenience and its brand strength, while customer pull is way, way above that of any car dealership or manufacturer.

Convenience is a huge selling point. I write for a company that fits tyres at customers’ homes, and the business is booming, while home shopping and deliveries are very powerful marketing tools – and no one does that better than Amazon.

John Swift

Editor

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