Hyundai And Amazon: Steering The Auto Industry In A Digital Direction

Forbes Business Retail Hyundai And Amazon: Steering The Auto Industry In A Digital Direction Chris Walton Senior Contributor Opinions expressed by Forbes Contributors are their own. I write serious and sometimes comic musings on retail’s evolution Following Click to save this article. You’ll be asked to sign into your Forbes account.

Nov 26, 2023, 04:21pm EST Press play to listen to this article! Got it! Share to Facebook Share to Twitter Share to Linkedin TOPSHOT – Amazon Vice President of Worldwide Corporate Business Development Marty Mallick (L) and . . .

[+] Hyundai Global President and Chief Operating Officer Jose Munoz speak at the Hyundai press conference at Automobility LA, the media preview day for the LA Auto Show, on November 16, 2023 in Los Angeles, California. (Photo by Robyn Beck / AFP) (Photo by ROBYN BECK/AFP via Getty Images) AFP via Getty Images Amazon AMZN and Hyundai made big headlines last week when they announced a new partnership in which, starting in 2024, Hyundai auto dealers will be able to sell Hyundai vehicles through Amazon’s U. S.

e-commerce platform. According to Statista, the combined number of cars and trucks sold within the U. S.

annually stands at just under 14. 0 million vehicles, and the total revenue from the road vehicle and parts trade is also a whopping $1. 53 trillion per year.

That’s trillion, with a “t. ” The size and scope of what could be at play here is what makes this announcement so intriguing. After all, who was it that once said, “Your margin is my opportunity?” Oh yeah, good old Jeff Bezos himself.

There are three big reasons why this announcement could herald a new age for how U. S. consumers purchase automobiles.

#1 – Hyundai Is The Perfect Partner For Amazon MORE FOR YOU About That Mysterious AI Breakthrough Known As Q* By OpenAI That Allegedly Attains True AI Or Is On The Path Toward Artificial General Intelligence (AGI) Gmail And Photos Content Purge Starts In 5 Days Protect Your Data Now Samsung Leak Confirms Powerful Galaxy S24 Ultra Upgrade Hyundai, the South Korean automaker, is known for value and reliability. It is famous for its 10-Year/100,000 Mile powertrain limited warranty. Or, said another way, it is the basic of the most basic options of car brands.

It is utilitarian, a good value, and it will get you where you need to go. The same could be said, and this is no slight (quite the opposite, actually), of Amazon’s e-commerce experience. It too is about value and helping customers find what they need as quickly and easily as possible, without all the fancy bells and whistles of many competing websites.

Hyundai and Amazon are made for each other in that respect. It’s why starting with a fancy automobile brand, one that requires customizations, a level of hand holding, etc. , say a Mercedes or a BMW, would never be the right move.

The right starting partner for Amazon to sell cars online is a brand that is as true to utilitarianism as Amazon is, a brand that consumers can understand right from the get-go because, cognitively, the idea of buying a car online is already a big enough adjustment for most consumers. #2 – Amazon Is The Master Of The Press Release Amazon is famous for writing press releases of how they envision announcing new commercial experiences to disrupt the market and then working backwards to bring them about. In fact, it is literally a key part of their “ working backwards ” problem solving method.

No doubt Amazon has taken the same approach here. The key to success, the things that drive every car buyer mad, are pricing transparency and paperwork. If Amazon, through its reverse engineering process, can make a dent in either one of these two friction points, consumers will come, Ray.

They most certainly will come. Pricing transparency is already one of Amazon points of differentiation as is one-click buying. Should either of these concepts ultimately be grafted onto the auto buying process in some new fangled way, look out.

Because those two ideas, if combined in the right way for car buying, have the makings of something special. #3 – Consumers Are Ready For BOPID (Buy Online, Pick Up In-Dealer) The most interesting (and smartest) angle of the new partnership between Amazon and Hyundai is that Hyundai dealers still appear to be a key part of the car buying process. According to an Amazon press release , the envisioned “new digital shopping experience will make it easy for customers to purchase a new car online, and then pick it up or have it delivered by their local dealership at a time that works best for them.

Customers will be able to search on Amazon for available vehicles in their area based on a range of preferences, including model, trim, color, and features; choose their preferred car; and then check out online with their chosen payment and financing options—all within the Amazon experience they already know and trust. ” Translation: while the whole concept sounds cool and revolutionary, it is really just a reskin of a concept that found its legs across retail during the pandemic – BOPIS, aka “Buy Online, Pickup In-Store. ” Only in this case, “in-store” is replaced with “in-dealer.

” And, it is a big reason why the whole concept just might work. Customers, across every age group, are now comfortable with searching online and then going to a location to pick up their goods. The pandemic forced everyone to adopt this new shopping habit, and it, more than anything, is one habit that has stuck around.

For instance, recent studies suggest that in 2022 (nearly three full years into the pandemic), there was a 66% increase in the number of online shoppers that utilized curbside pickup over the prior year. This statistic, combined with the fact that now over 50% of large retail chains also now offer the service, indicate that BOPIS and curbside are here to stay. Imagine, just imagine how delightful a car buying experience would be if the only steps required at the dealership were to go there to inspect the car, take it for a quick test drive, and then one-click to purchase.

It sounds too good to be true because it is, and therein lies the power of the Amazon press release, one that, in this case, has no doubt been pre-written in a similar vein and shared internally across Amazon. Amazon isn’t so much a retailer as it is the infrastructure provider for how retail can be done better. From its online marketplace to AWS to its Just Walk Out technology, Amazon’s brilliance lies in figuring out what makes consumer experiences better and then honing them to the point where consumers can no longer live without them.

The process for buying a Hyundai may very well become just that – the first vertebra of an Amazon-created backbone for how car shopping can and should be done better in the 21st century. Follow me on Twitter or LinkedIn . Check out my website or some of my other work here .

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