News that Amazon Marketplace is withdrawing from the Chinese domestic e-commerce market has important lessons for UK dealers, says iVendi.
It has been reported that a key factor behind Amazon’s decision has been its inability to compete successfully with local suppliers who often offer free overnight delivery.
James Tew, CEO, said: “Online shopping across the world is making buyers habitualised to expect that everything will happen as close to instantly as possible. Ironically, Amazon have been one of the main instigators of this trend in the UK, Europe and US through their overnight and same day delivery services.
“Where this doesn’t happen, retailers find they can’t compete because buyers go elsewhere and this appears to be exactly what has happened in China.”
The lesson for dealers, Tew explained, was simply that speed of response was one of the key ways in which dealers of all sizes can win over customers.
“This is a way that car retailers of almost any kind can compete successfully with almost any competitor – by meeting the customer’s expectation for rapidity. This holds true whether the conversation is taking place online or in person.
“It is no secret that this has not been an area of strength for the motor industry over the years, where a 24-hour response time to an e-mail query is often seen as good. However, working to drive down that figure has genuine benefits. Arguably, in a modern retail process, the dealer that answers fastest is the one that has the best chance of making the sale.”
Tew said this thinking could be applied not just to handling customer enquiries but also to the way in which cars were retailed, especially when it came to new vehicles.
“The online new car sales experience is generally designed in a way that simply doesn’t reflect real world customer behaviour, asking them to configure a car and wait for months for it to be built and delivered. It is a dated retail model and one that very few consumers actually follow.
“If you look at dealers in the US, more than 90% of their new car sales are typically made from stock or from other dealers, which are then delivered in days. This is much closer to how the vast majority of consumers expect retailers to behave in 2019 and it is little bit of a mystery why more UK retailers don’t have a sales approach built on this pattern.
“For us, the lesson of Amazon China is that by working to meet the expectations of 21stcentury consumers about speed of response and delivery, dealers of any kind can compete with almost anyone. If you don’t, you are making yourself vulnerable to competitors who have a much better grasp of customer needs.”