retail news in context, analysis with attitude

Motor Trend reports that Walmart is partnering with automobile dealership groups, including AutoNation, to begin selling cars.

The program begins April 1 in Walmart Supercenters in Houston, Dallas, Phoenix, and Oklahoma City. If successful, the company foresees a national expansion within two years.

According to the story, Walmart's CarSaver program allows car buyers to "select their desired new or used vehicle and apply for financing and insurance. Walmart will host CarSaver kiosks inside 25 of its Supercenters at launch, although customers can also go through the process on their own online or by calling an 800 number. After this initial stage, CarSaver links the customer to a local dealership so they can complete the transaction."

Walmart's CarSaver program gets a a $350 piece of the action in most states, but in others will charge a subscription fee.

Meanwhile, Barron's reports that Amazon is "pushing more aggressively" into the auto parts category.

In recent months, the story says, "the online retail behemoth has signed deals with auto parts makers Robert Bosch, Federal-Mogul , Dorman Products , and Cardone Industries ... That should send a chill down the spines of executives at auto parts retailers like Auto Zone and O’Reilly Auto Parts."

The story notes that Amazon seems to be significantly undercutting traditional auto parts stores on price, and even is offering same-day delivery in a number of markets. And, "it’s even paying the parts makers more than they generally get from retailers. In the short-run that could hurt Amazon’s results. But in the long-run it will only cement Amazon’s reputation as the 'everything store,' and could give it a chance to get even more access to the average consumer’s wallet."
KC's View:
The lesson here is that as Walmart and Amazon do battle with each other, they are going to be looking for new categories in which they can disrupt traditional players and generate growth and revenue. I have to wonder if the list of categories is going to get smaller, which is going to make the competition even more intense ... which, I think, is only going to create more collateral damage among the traditional retail class.