Amazon pushed product retail online, can Tesla do the same for cars?

Posted on March 10, 2019 by Matt Pressman

It's not uncommon to see Tesla compared to Amazon. There's also a bit of a rivalry between Jeff Bezos and Elon Musk. Bezos has systematically extracted mass market product retail out of traditional brick-and-morter stores and into its industry-dominating Amazon marketplace online. Could Musk be taking a page out of the Bezos playbook — going all-in with Tesla's online sales strategy?

Above: Ordering a Tesla online (Image: Tesla)

Furthermore, could Tesla be the first automaker to have the moxie to attempt such a bold Amazon-esque move? In the article, In 1 Astonishing Sentence, Elon Musk Just Revealed the Sheer Insane Power of the Tesla Brand, Chris Matyszczyk writes in Inc., "Musk offered several statistics that might stress the minds of traditional automakers," but one particular sentence stood out to him: 82 percent of customers bought their Model 3 without ever having taken a test drive. 

Matyszczyk says, "How many brands can possibly inspire consumers to part with vast amounts of money simply on their cachet and hearsay? It's one thing iPhone buyers being prepared to sacrifice $1,000 on the altar of self-regard. It's quite another to part with, say, $40,000 in order to buy a car."

Above: Carvana's CEO says he "wouldn't be betting against" Tesla's recent push for online sales (Youtube: CNBC Television)

Talking Tesla, Analyst Gene Munster told Fox Business, "Basically you don't need that sales force... actually no one likes buying a car in the current [dealership] model." With online sales, Munster concedes that Tesla might actually "find a way to improve the buying experience." 

Indeed, Forbes published a report that found car salespeople remain "one of the least trusted professions in America today." And Bloomberg predicts that Tesla's move to online sales "will turn out to be prescient... [as] 78 percent of all Model 3 sales were already online last year. And millennials — one of the key targets for the Model 3 — have highly favorable views of the Tesla brand and are keen to buy products over the internet."

Above: The only group of professionals less trusted than car salespeople are Members of Congress (Chart: Forbes; Source: Gallop)

In turn, Markets Insider reports that "Millennials are piling into Tesla" stock after the company announced the base price Model 3 and its transition to online-only sales. It's reported that, "Users of the free trading app Robinhood, which is popular among younger traders, increased their holdings of Tesla by nearly 20% over the past week... just behind Amazon."

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Sources: Inc.CNBCFox BusinessForbesBloombergMarkets Insider

Posted in Elon Musk, Tesla, Tesla Model 3, tesla news, Tesla Stores, TSLA


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