In a guest blog, Vertu Motors chief executive Robert Forrester suggests the way franchised dealers have upped their game on customer service could help the high street avoid further major collapses.
"2013 started as badly as 2012 ended for high street retailers; several national names closing and consumers, according to instant media analysis, taking flight to the internet. So what, if anything, can our retail brethren learn from the experiences of the motor retail sector since the dark days of 2009?
"Five years ago our forecourts faced an exodus as confidence dried up, fuel prices escalated and unemployment soared. Radical new thinking was required to kick start the sector as customers questioned the logic of a large scale purchase when there was so much uncertainty in the air.
"Motor retail has been forced to adapt to survive. It is still here and is, in the main, prospering in a stagnant economy.
"The similarities between our experience and today’s high street malaise are striking.
"The high street faces three impediments to future success: long-term property deals that were only appropriate for the Blair/Brown boom years, with upward only rent rises and rates per square metre that bear no resemblance to the current market conditions; a tax drag on its customers in the form of parking charges and business rates that put up the cost of both visiting and buying from a shop; sophisticated competition from internet traders, some of which don’t even have to pay UK corporation tax.
"Motor retail faced similar difficulties but has started to see the effects of a co-ordinated response from innovative thinkers in the sector: Forecourt landlords felt a real shock as new deals were struck and sector rationalisation left them with no choice but to renegotiate terms; the Government, which still takes eye-watering sums from the sale and running of motor vehicles, agreed to an exciting ‘scrapage’ scheme which kick-started the market and ended up being self-financing; and internet competitors, such as ‘we-buy-any-car’, found their offering challenged effectively by a sector willing to up its game and counter instant deals with good deals and excellent service.
"I recently presented Vertu Motors’ in-house awards and I was struck by the way our team have delivered on our motto: ‘Built on Trust’. Long gone are the days when the phrase ‘would you buy a used car from that man?’ reflected the motor sector’s customer relationships.
"The team of professionals I was honouring personified a whole sector that has changed. With nearly 100 dealerships, monitored in real-time, I can see that customer service is the key to our success and could be the answer to a much-needed high street renewal.
"An excellent book, ‘Sold Out’, by top retail insider Bill Grimsey, analyses the problems of the high street in forensic detail. He discusses the landlord property ‘lemmings’ who stick by fanciful leases at a cost to their own long-term survival; he looks at the growth of the web and the banking led financial restructuring coupled with over-lending that caused debt leaden collapse.
"But nowhere is his argument more powerful than the points he makes on customer service.
"He contrasts with devastating accuracy Woolworths and Wilkinson’s; both were in the same sector of the market, both had prominent high street locations but Woolworths lost its way with poor service, a devalued brand and – believe or not – even had a large percentage of its shops with letters missing from their front signs! Wilkinson’s is a smart, pleasant chain doing well and presenting customers with similar products in a much more effective way. It survives and prospers today because it has put customer service first.
Motor dealers have started to see customers return due to the combination of excellent products that are modern and fit for purpose and first rate customer service.
"How many times do you enter a motor dealership only to be served by an inexperienced 16 year old? Hardly ever but in retail it happens every Saturday.
"Consider how motor retailers have worked with the internet, how you can you check a car online, see photos, video and prices before you enter the showroom.
"The new motor retail model is even being followed by innovators like Apple, which has some of the most successful ‘showrooms’ on the British high street; ironically, selling products that are web based linked to the internet commerce giant, iTunes,
The motor retail sector still has serious challenges and a lukewarm economy to cope with but the shock therapy of the last decade has brought about renewal, hope and innovation.
"If the high street follows our lead it will be able to say, in the words of Mark Twain: “Reports of my death are greatly exaggerated!”