Millennials’ dedication to Amazon has significant implications for its future success in selling auto parts and repairs
Fort Wayne, Ind.—Amazon has an advantage with Millennials, who will generate the largest share of light vehicle aftermarket parts and repair volume over the balance of this decade. Millennials rank Amazon as the most relevant product/service brand in the U.S., according to a new report by Lang Marketing. In their minds, Amazon overshadows tech giants such as Apple and Google and product/service companies like Sony, Starbucks, and Nike, to name only a few.
“Millennials’ dedication to Amazon has significant implications for this eCommerce giant’s future success in selling automotive parts and repairs,” states Lang. “Equally important to Amazon’s future direction and success in the aftermarket is its growing interest in using the aftermarket as a foothold for gaining access to the massive, trillion-dollar mobility market of the future.”
The following are key takeaways from the analysis.
Millennials are a Key to the Aftermarket
Millennials (born between 1981 and 2000) range in age from 24 to 43 and are the largest U.S. generation. Through this decade and beyond, Millennials will be the key generation driving the U.S. economy as Baby Boomers fade and Generation Z consumers gain economic traction.
Amazon is the Millennials’ Most Relevant Brand
Millennials rank Amazon as the top relevant product/service brand. Brand relevance is determined by its benefits to consumers and how it addresses their key needs, wants, and desires. Relevance is the most significant factor in determining a brand’s economic success and impact.
Amazon grew up with Millennials throughout their formative years. Accordingly, it has become their go-to buying source for all kinds of goods and, increasingly, services. As digital natives, Millennials have not known the internet without Amazon.
From Books to Everything
Started on July 5,1994 as an online marketplace for books, Amazon was run by Jeff Bezos from his garage in Bellevue, Wash. Since then, Amazon has rolled out its offerings to encompass virtually all types of products, transforming from an internet bookstore to an internet everything store. In recent years, Amazon has expanded into services, with o2o (online to offline) transactions growing in volume and the range of services offered, including auto repair.
Unique Appeal of Amazon to Millennials
In addition to its product array and quick delivery (which appeal to all consumers), Amazon has two features aimed directly at key Millennial values, which have helped it earn its status of top relevance among Millennials.
• Product Reviews
Amazon’s product review feature allows users to rate products that they have purchased. This taps into a primary Millennial value: peer-to-peer opinion sharing. Millennials strongly rely on peer-to-peer opinions when they choose among products and services. This information provided by Amazon plays into Millennials’ core value of sharing.
This sets Amazon apart from many other buying sources (especially brick-and-mortar businesses) and gives Millennials the feeling of extra value from Amazon, which makes their product selection much easier and more likely to be “on target.”
• Brand and Price Alternatives
Amazon’s wide range of brand and pricing alternatives is another feature that makes it the first choice for many Millennials. This differentiates Amazon from most brick-and-mortar stores, which cannot provide a similar range of options. This is important to Millennials who often prefer value (competitive pricing) over merchandise branding. Some analysts have stated Millennials lack brand loyalty.
Aftermarket Impact
Amazon’s appeal to Millennials will have significant aftermarket consequences as Amazon increasingly targets auto parts (retail and wholesale) and expands its automotive repair offerings. Millennials already play a critical role in DIY parts buying, and they are a growing force in the Do-It-For-Me (DIFM) market partially due to the increasing number of Millennial technicians and repair shop owners.
In its recent study of repair shops’ internet buying activities, Lang Marketing has documented significant differences in the internet buying practices of Millennial technicians and shop owners compared to those of their older counterparts.
Aside from this wholesale aspect of the DIFM market, Millennials are changing the role of the internet in the retail purchase of automotive repairs.
Parts Delivery Speed as a Market-Entry Barrier
Many analysts regard the rapid delivery of auto parts by brick-and-mortar stores to repair outlets as a requirement of the DIFM aftermarket. They believe that this delivery barrier will prevent internet buying from expanding beyond only a small collection of aftermarket repairs.
However, o2o (online to offline) transactions change these delivery-barrier dynamics. In fact, o2o reduces the need for rapid parts delivery since consumers schedule auto repairs through Amazon (online) at approved outlets. This provides lead time for the necessary parts to reach the outlet from Amazon before the scheduled repair (offline).
This o2o strategy shifts the focus of consumers’ auto repair buying decisions from local repair outlets to large platforms, such as Amazon.
Millennials Put Amazon in the Driver’s Seat
With its position of reliance and trust among Millennials, Amazon is ready to expand its already substantial auto parts DIY sales base and increase its offering of auto repairs (using an o2o model). Its growing aftermarket foothold has positioned Amazon to gain access to the massive, trillion-dollar mobility market of the future.
Comments are closed.