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BMW’s Retail Online ‘depends on our forward-thinking retailers’

Kevin Davidson, retailer development director, BMW Group UK, accepts the award for  Digital Initiative of the Year from Sharon Randall, UK sales director, Auto Trader

As BMW UK prepares to expand its Retail Online platform to incorporate Mini and its used car sales, the German brand said its “committed” franchised network was a key part of its end-to-end digital service.

BMW Retail Online won Digital Initiative of the Year and Best Manufacturer Digital Initiative at February’s AM Awards, just three months after it launched  its web-based sales platform.

Trialled in the UK, the platform allows customers of the German brand to configure their chosen vehicle, arrange a test drive and part-exchange, and even secure a finance offer and pay for a vehicle in full without setting foot inside a dealership.

Unsurprisingly, some in the franchised dealer network met the development with trepidation.

In an interview with AM, BMW UK’s retailer development director, Kevin Davidson, claimed retailers were on board from day one and were now reaping the rewards of ready-made leads, with online customers even willing to part with more cash than showroom visitors.

“In many ways, it was our retailers that pushed us to provide the full end-to-end service,” he said.

“From a very early stage, we discussed with a panel of six retailers what we were going to do and they said ‘well, if you’re going to do it, you might as well offer it all’.

“We’re very lucky that we have a group of committed retailers who are very forward-thinking and have faith in our strategy.”

BMW UK’s panel of dealerships was made up of representative from Sytner Group, Cooper, Specialist Cars, Halliwell Jones, Westerly, Arden and Williams Group.

BMW Retail Online project manager Paul Kester added: “From day one, we were really transparent with them and made it clear that this was something we wanted to introduce to the existing platform and they really got on board. They were instrumental in shaping it as an end-to-end sales solution.”

Davidson said the idea of an online sales platform was introduced as part of BMW UK’s Future Retail strategy, which was launched in 2010/11 and introduced the BMW Genius concept.

Today there are more than 300 BMW ‘geniuses’ – individuals trained to guide customers around the vehicle range – in BMW retailers and available online via live chat and email.

Online service booking has also been available for more than two years.

When BMW Retail Online launched in November 2015, 95% of the brand’s retailers had already signed up and Davidson said about 99% of the brand’s volume is currently represented through its participating retailers, with 97% signed up.

Dealers benefit from ready-made leads as online customers can select a preferred dealer for the hand-over of their vehicle.

Davidson said: “These are ready-made leads in every sense of the word. Customers might choose to contact the dealer at any point in their buying journey but, regardless, the retailer that completes the handover gets a full sales commission.”

Customers can also choose to view currently available vehicles close to their configured choice to side-step lead times. One in five customers takes that route, according to Kester.

To date, BMW UK has completed 300 sales through Retail Online, with customers only visiting a dealership for the hand-over of their vehicle.

About 14,000 live chats, 75,000 needs analysis questionnaires – a series of four questions to determine the BMW that best suits a customer – and 41,000 ‘click to purchase’ transactions, which have seen customers log in to a showroom section of the platform, have also been processed.

Davidson said 13% of those showroom visitors have been converted into sales, with an average finance penetration of 70%.

Kester said the finance calculator – provided through BMW Financial Services – is a real strength of the Retail Online offering, with customers keen to determine their potential monthly payments.

He said BMW is currently exploring giving consumers  the opportunity to access financial options earlier in the process.

Davidson said that, on average, BMW Retail Online users spend £39,000 on their vehicle, 20.5% more than the retailer average of £31,000.

He added: “For whatever reason, we have seen people go for more options, bigger engines and higher-price vehicles.”

BMW UK is preparing to extend Retail Online to new Mini sales and used cars for both BMW and Mini brands.

Davidson said the used element was currently “in the planning stage”, but he hoped to see a pilot  scheme launched by the end of this year.

He said: “A lot of the used car journey is already there at the front end. There is provision for a CitNOW video of the vehicle and you can call the dealer, but we want consistency across all our

platforms and that means a full end-to-end sales process.”

The Mini side of Retail Online is currently under development and is expected to be launched in 2017.

The expansion will coincide with a promotional push, on top of BMW Retail Online’s already high-profile presence at the BMW PGA Championship at Wentworth in May and at the Goodwood Festival of Speed in June.

Davidson insisted that BMW UK’s main objective remains the driving of sales through its retail network.

He said: “We don’t have any plans to develop retail business with end-user customers. That is not part of our plan.

“A car is most people’s second-largest purchase and for that reason alone I think there will always be a place for a local touchpoint for our customers.

“What that retailer looks like and the range of services it provides might change, but I cannot see dealerships disappearing.

“We employ 12,000 people in our network; we have 450 people in our apprenticeship programme.

“We employ exceptional people who touch the lives of customers every day and retailers that have been with us for 40 years. All those things are hard won and we won’t be turning our back on that.”

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