Amazon made motor oils available under its own brand Amazon Basics Full Synthetic Motor Oil last year. And it can take significant market share in the motor oil and lubricants categories in the coming future. What makes Amazon such a dangerous competitor to established brands in the motor oil category is the fact that Amazon can sell its private-label oil online at a much cheaper price.
The advent of E-commerce is among key trends shaping the motor oils industry now. Kline & Group gives the following explanation in its recent report.
Changing consumer behaviors and the ease of access to e-commerce platforms have created an important channel to customer for lube marketers.
There are three types of online stores:
1. Marketplaces such as Amazon.com
2. Online auto parts stores
3. Traditional retailers that have added an online store to their existing business
For example, online sales are offered by traditional retailers, but the rise of purely online auto parts stores is where new customers for lube marketers are expected. Online stores, such as rockauto.com and jegs.com, saw over 19 million and 5 million visitors, respectively, in the month of November 2018.
While lubricants constitute a small part of sales, consumers move to buy more products online, and lube sales on these sites will continue to grow. It is estimated that online sales will grow in the United States at a compound annual rate of 12% through 2020 and at 9% over the next decade.
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