Lang Aftermarket iReport: Amazon captures Millennials, plans to increasingly target auto parts

“Millennials love Amazon and rank it as the most relevant product/service brand in the U.S. In the minds of Millennials, Amazon overshadows tech giants like Apple and Google as well as product/services companies like Sony, Starbucks and Nike, to name only a few.”

“Amazon’s top ranking by Millennials has significant implications for the development of auto parts sales by Amazon, which has shown a growing interest in the aftermarket and the access it can provide to the trillion-dollar mobility market.”

— Jim Lang, publisher, Lang Aftermarket iReport

Millennials Are the Economic Future

Millennials (Americans born between 1981 and 2000) today range in age from 20 to 39 years. For the next twenty years, Millennials will be the key generation driving the U.S. economy, as Baby Boomers fade from the scene and Generation Z consumers began to gain economic traction.

Amazon Rated Most Relevant Brand

Millennials rate Amazon as the most relevant product/service brand. A brand’s relevance is determined by its benefits and how it addresses the key needs, wants or desires of a consumer group. Relevance generally is regarded as the most significant factor in determining a brand’s success.

Millennials have grown up with Amazon as it has become their universal buying source for all kinds of goods. As digital natives, Millennials have not known an Internet without Amazon.

From Books to Everything

Amazon began selling books as a testbed for its eventual rollout to virtually all types of products, moving from being the Internet bookstore to the Internet everything store.

Amazon is also expanding into services, with o2o (online to offline) transactions growing in the range of services it offers, even auto repair.

Amazon’s Unique Appeal to Millennials

In addition to its boundless array of products and quick delivery, which appeal to all consumers, Amazon has two features that are aimed directly at key Millennial values, features that have helped Amazon to earn its top relevance rating by Millennials.

Product Reviews

One characteristic of Amazon that makes it popular with Millennials is its product review feature, which allows users to rate the products they have purchased. This taps into a central Millennial value: peer-to-peer opinions.

Peer-to-peer opinion sharing is a key means by which Millennials choose among products. This information sharing provided by Amazon plays into the Millennials’ core value of sharing.

It sets Amazon apart from many other sources (particularly brick and mortar businesses) and gives Millennials a feeling of extra value from Amazon that makes their product selection much easier and more likely to be “on target”.

Brand and Price Alternatives

By providing a great variety of choices within individual product categories, Amazon offers brand and pricing alternatives to buyers.

This is very important to Millennials who often prefer value (competitive pricing) over merchandise branding. This has led to the accusation by many analysts that Millennials lack brand loyalty.

Aftermarket Implications

Amazon’s appeal to Millennials will have significant consequences as Amazon increasingly targets auto parts (retail and wholesale) in its expansion plans.

Millennials, who already play a key role in DIY parts buying, are a growing factor in the DIFM market through the increasing number of Millennial technicians and repair shop owners.

Lang Marketing’s recent study of repair shops’ Internet buying practices has documented significant differences in Internet buying by Millennial technicians and shop owners compared with that by older technicians and shop owners.

Delivery Time May No Longer Be a Barrier

The rapid delivery of auto parts provided by brick and mortar stores has often been seen as a requirement of the aftermarket that will keep the Internet (distance buying) from expanding beyond only a small portion of the aftermarket.

However, o2o (online to offline) transactions can reduce the need for rapid parts delivery, with consumers scheduling auto repairs through Amazon (online) at approved outlets, providing the lead time for the necessary parts to be shipped to the outlet by Amazon prior to the vehicle arriving for service (offline).

Such an o2o strategy shifts the focus of auto repair buying decisions by consumer from specific repair outlets to platforms such as Amazon.

Six Major Takeaways

• Millennials (ranging in age from 20 to 39 years of age) will be the key generation in the U.S. economy for the next 20 years.
• Millennials rate Amazon as the most relevant brand, beating out tech giants like Apple and Google, along with consumer product/service brands like Sony, Starbucks and Nike to name only a few.
• Amazon has two features that are pointed directly at key Millennial values: peer to peer ratings of products and wide selection of brands and prices.
• o2o (online to offline) transactions can overcome the need for quick parts delivery by enabling consumers to schedule repair at outlets several days in advance, allowing time for Amazon to ship the necessary parts to the repair site.
• This o2o strategy shifts the focus of auto repair buying decisions by consumers from specific repair outlets to platforms such as Amazon.
• Amazon’s interest in the aftermarket is based largely on the access it can provide to the much bigger mobility market, which in the future will amount to trillions of dollars.

Copyright 2020 by Lang Marketing Resources, Inc.

NOTE: Special thanks to publisher Jim Lang for granting us permission to publish the Lang Aftermarket iReport.