Wal-Mart Dabbles Toes in Auto Sales Market
It’s no longer car shopping as usual. With Wal-Mart, Costco and potentially Amazon in the car sales arena, consumers are being given an increasing number of choices on how to purchase their next ride.
Just about anything you need, or don’t need, you can pick up at Wal-Mart. With more than 142,000 stocked items in the average Wal-Mart Superstore, it should come as no surprise that the world’s largest retailer would want to broaden its wide-range goods and services to jump on the automotive sales bandwagon.
Wal-Mart is not directly going into the car selling business per se, but instead has partnered with CarSaver, an online automotive retail platform. CarSaver will then operate information centers and kiosks at Wal-Mart locations.
By using the CarSaver website at the kiosk, Wal-Mart shoppers can add car buying to their shopping list. Right in the store they can select a car, get financing and line up auto insurance. Yet despite the convenience, it’s not quite the one-stop shopping experience Wal-Mart customers are used to. Shoppers will still need to visit a local certified car dealership to pick up their car. And if a sale is made, the dealership will pay a $350 fee to CarSaver.
Though Wal-Mart is teaming up with dealership groups to provide car-buying centers within their stores, the mammoth retailer isn’t about to convert part of its store parking into car lots.
CarSaver in turn is partnering with Fort Lauderdale-based AutoNation, one of the United State’s largest automobile dealership groups and leading new vehicle retailer. CarSaver is also engaging Detroit-based Ally Financial to provide the program’s auto lending services.
Wal-Mart spokeswoman Molly Blakeman says a pilot program is under way in Stuart, Florida, where Wal-Mart is leasing space in one of its stores to CarSaver and giving the new partnership a test drive. CarSaver, Wal-Mart, financial lenders and 20 certified dealerships have teamed up in this small town on South Florida’s Treasure Coast to try out the new program. “It is a one-store pilot program that has been in progress for around a year and we’re still evaluating customer response,” Blakeman says. At the Stuart location, more than half of the appointments resulted in a sale, and on average shoppers pocketed at least $3,000 off the sticker price, CarSaver CEO Sean Wolfington told Automotive News.
On April 1, CarSaver will open car kiosks in 25 select Wal-Mart stores in Dallas, Houston, Phoenix and Oklahoma City, where car shoppers can choose their vehicle and set up financing and insurance, on either CarSaver’s website or the kiosk’s touch-screen. At this time there are no plans to expand the program into additional states.
CarSaver patterned its Wal-Mart program on a similar business model offered by fellow retail giant Costco, whose website offers its members a “smooth, seamless buying experience.” Members are also offered prearranged pricing, along with available national manufacturer incentives and access to more than 3,000 dealerships nationwide.
Tom McParland, a columnist for Jalopnik.com, a website for news and opinion about cars and the automotive industry, believes that despite Wal-Mart’s market leverage for inexpensive goods, consumers will not necessarily get a bargain on their next car. “Wal-Mart is not actually getting into the business of selling cars,” writes McParland. “They will not stock inventory, they will not be a dealership. You will not be able to get Rollback pricing on your new Corolla and buy it alongside your jumbo-sized package of paper towels.”
In addition to its partnership with CarSaver, Wal-Mart is making strides in the e-commerce market in its efforts to compete with Amazon. So, it just might be a matter of time before Amazon joins Wal-Mart and Costco in the car buying business. Though consumers cannot yet purchase cars online, Amazon offers a site called Amazon Vehicles, described as a “car research destination and automotive community” that allows consumers to research when shopping for their next car.
Shoppers can view specifications, images, videos and customer reviews for thousands of new and classic car models. Shoppers can search for vehicles by body styles or browse by brands. Consumers can also conduct searches based on towing capacity, seating capacity, color, miles per gallon and more. Users can review the cars they have previously owned and leave car-related questions for others to answer.
John Rosevear, senior auto specialist for Fool.com, calls Amazon’s new portal “a sign that Amazon is thinking about ways to insert itself into the car-sales process, and that has implications for a lot of players in the business of cars.”