Automotive > Infotainment & Telematics Blog

Best Buy, AddOnAuto Rewiring Auto Dealer Aftermarket Opportunities

by Roger Lanctot | Feb 22, 2013

Best Buy is kicking its Commercial Division automotive aftermarket efforts into overdrive in 2013 with plans to more than double the number of major metro areas covered from 12 to 27.  For the past two years Best Buy has been working with AddOnAuto to build an auto dealer-focused program of vehicle upgrades around a cloud-based platform capable of matching any car with a nearly comprehensive catalog of compatible accessory gear including everything from mud flaps to navigation systems.

The program is unique for a variety of reasons including the fact that it encompasses most aftermarket stereo brands and integrates the installer capabilities of Best Buy’s own 3,000-strong Geek Squad.  Most notable is that the program only includes products that cannot be shopped in retail stores or online, which is one reason for Sony not being included since the company lacks a two-tier program.

The program is operated by Best Buy’s Commercial Division and targets fleet, insurance and car dealer markets.  But the insurance program, for replacing stolen or damaged equipment, is not yet up and running and the dealer program is by-far the largest business segment. 

Kicked off in Boise, ID, more than two years ago, Best Buy’s mobile electronics program for dealers provides a subscription-based, Web portal where dealers and their customers can browse for compatible aftermarket products and even see what a sample vehicle will look like following installation.  The subscription is $450/month.  The portal replaces physical catalogs or more generic online ordering systems that lacked the car-level detail and visualization tools.

The program is currently operating in Los Angeles, Phoenix, Atlanta, Miami and Minneapolis among other markets.  AddOnAuto is separately recruiting dealers with a less robust offering, but the company claims in its promotional materials that 9 out of 10 consumers buy accessories for their new cars; six out of 10 spend as much as $1,500 per car; but that auto dealers capture only 10% of this business, even though 75% of consumers tell AddOnAuto that they’d prefer to buy from their dealer.

Best Buy will also provide sales training, marketing support and sales tools along with free concierge pick-up and delivery, according to company literature.  The group was recruiting dealer participation at the recent National Automobile Dealer Association convention in Orlando with a discounted subscription offer of $149/month.  Aftermarket mobile electronics suppliers contacted by Strategy Analytics confirmed the success and high expectations for the program thus far.  Best Buy representatives declined to share program revenue information.

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