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Volvo's Retail Experience takes on the Germans with a warm, Swedish welcome

13 Volvo Retail Experience programme ‘living room’

Volvo car showrooms in the UK are being transformed into customer-focused, Scandinavian- inspired spaces that are “cool on the outside, warm on the inside”.

The car manufacturer wants to change how consumers engage with the Swedish brand, and emphasise it as a welcoming alternative to the German brands dominating the premium car market.

Three UK locations in the network of 103 dealerships and 20 authorised repairers have already adopted the new corporate identity, labelled Volvo Retail Experience (VRE).

VRE sees 40% of the showroom transformed into a ‘living room’ – with Scandinavian-designed furniture for customers to relax on, free Wi-Fi and Swedish cakes and coffee – and 60% dedicated to a contrasting ‘street’ area displaying Volvo’s new car range.

To help the dealership stand out from heavily glazed German brand showrooms, Volvo is opting for showrooms clad in an opaque glass that features “shop windows” of clear glazing displaying the latest cars. A wooden entrance feature also conveys the Scandinavian style. Customers park directly in front of the entrance, unlike the traditional dealership style which prioritises stock display above the customer. Instead, the Selekt approved used cars will be displayed to the side.

The emphasis on customer comfort is due in part to Volvo’s desire for aftersales customers to wait while their car is serviced. Although Volvo car dealers may still offer courtesy cars and collection and delivery, a new ‘lean’ method of working by teams of two technicians on each car will mean a service should be completed in less than an hour.

Interior glazing ensures the waiting customer can see exactly what is going on in the workshop. Their assigned Volvo Personal Service (VPS) technician will deal with them directly in the ‘living room’ and can escort them into the workshop to see first hand if any further repairs or maintenance needs have been spotted on their car.

Phil Hand, Volvo Car UK head of network development, said it is the first major transformation of Volvo’s showroom style since the adoption of the Volvo Next Face CI 10 years ago, when the S40 model was introduced.

Now that the brand is launching its new XC90 premium SUV, its first model developed independently since Volvo’s sale to Geely by Ford, it sees VRE as a crucial element of the premium customer experience.

Hand said: “VRE has been designed to tackle the challenge of bridging the gap between an ever-improving market sector and the current Volvo dealership customer experience. Workshops are integral to the customer experience, so being able to see in and out of the ‘window’ between the dealership spaces becomes a symbol of trust between Volvo and our customers.

“VRE isn’t just about a change of furniture though – it’s a new way of retailing designed to make our customers feel relaxed and at ease in an environment that informs and provides flexible waiting, working and assessment areas.”

David Baddeley, Volvo Car UK customer service director, said the improvements reflect a fundamental need for trust, and demonstrate that Volvo dealers are respectful of the customer’s time. By attending a specific appointment and relaxing or working at the dealership while the car is being serviced, the customer can be on their way again within an hour. They also gain trust from speaking directly with technicians.

Hand added: “One of the issues we’ve had historically for the brand is that people don’t feel relaxed and at ease in our dealerships. It’s something we’ve seen in mystery shops, and so the living room is designed to cater for that and ensure we provide a really nice, premium environment for the customer.

“The ‘street’ is all about showing off the products,  with neutral colours. Historically, we have tended to wedge in a lot of product, but I’d rather have a five-car showroom done in a premium way with space for the customer to move around the cars than wedge in eight cars.”

 

Sparking interest with a ‘shop window’

“Externally, the principle we’re trying to achieve is a shop window concept so when you drive past the dealership there’s an awful lot to take in,” said Hand.

“With shop windows, you’ll typically see just one or two cars, and it’s designed to get the interest levels up and make it a place you want to visit rather than bamboozle you with too much information.”

“Cool on the outside, warm on the inside is the overall appearance. It’s in line with the ‘designed around you’ Volvo strapline we’re communicating to customers at the moment.”

The Volvo dealerships which have already adopted VRE and VPS are Johnsons at Solihull and Volvo authorised repairers MRG in Chippenham and TMS at Hinckley.

The roll-out is expected to extend to 20 sites a year until the entire Volvo dealer network is complete by 2020.

To keep the cost of the new CI under control for operators, the network has been split into three bands, bronze, silver and gold, based on the local market opportunity and current performance. Bronze-band dealers will not be required to implement all aspects of the CI, such as the lowered bulkhead ceiling over the living room area, which is a requirement of gold-band dealerships.

An automotive architect recently suggested it would be difficult for many Volvo dealers to convert their current premises to the ‘shop window’ style. Hand admitted the concept was designed for new-build sites, such as in China, and described VRE as a major job, with renewed ceilings and floors required.

However, he said much work has been done to make this global CI suit the UK network. The shop window can be made out of three bonded pieces of glass, rather than one single piece, and a contravision film enables part of the glass to be greyed out as required to create the different shop window areas.

“Where there are structural columns we will work on these, so if it does need to be in a slightly different position we’ll accommodate that. However, the shop window is a key part of the scheme so it’s something we will retain in all three bandings,” he said.

Volvo’s global CI proposed a ‘jewellery box’ style, with a car on the top of the dealership, but the UK has not taken that.

Volvo’s franchise standards now require all the network to be in solus Volvo showrooms. Hand said there are currently 22 sites in multi-franchised showrooms, with a plan for these to become solus showrooms by December. Locations neighbouring other brands will be acceptable, but Volvo requires that the customer needs to exit the showroom in order to go to any other. It also insists on brand-specific sales and aftersales teams, to achieve the level of personalised service it is aiming for.

Volvo’s justification for this is that the most profitable sites in its network have solus representation. Hand said there has not been a big fight with the multi-franchised dealers to accept these solus standards. The Volvo network can afford to take this step, he added.

Hand said there was widespread acceptance among dealers of the need for VRE in the first place, because the CI has not been updated in 10 years and Volvo’s range is about to be renewed. After the XC90 is introduced this year, the rest of Volvo’s range will be completely new within four years.

 

Giving customers a ‘while-you-wait’ service

Volvo says there are three key elements to VPS: lean working, personal service technicians, and the integration of VRE.

The manufacturer has identified waste in the time technicians spend walking around the car during the service, and in the communication between the dealership and the customer. To eliminate this, VPS includes replacing four-post ramps with in-ground lifts or scissor lifts and putting two technicians on a single job, in what are known as ‘multi-skilled teams’ (MSTs). One of those technicians will also be trained as a Volvo Personal Service Technician (VPST), who will deal directly with the customer.

“At the moment, the customer may phone in to a contact centre to make the booking, that’s communicated to the dealership, then the customer arrives on site, talks to the service adviser, who’ll talk to the workshop controller, who’ll talk to the technician, who’ll talk to the service manager, and in all that communication there’s a huge amount of waste.

“One key element is to say the technician talks to the customer, to remove all that waste in the communication chain, because for technicians the single most common frustration is the inaccuracy of the job card. We can remove that inefficiency by getting customers to talk directly to technicians.

“Fundamentally, this is about improving the customer experience and improving efficiency,” said Baddeley.

Such measures will prepare the network for a growing Volvo service parc. After a period of stagnation, the brand has grown its new car sales since 2012 and in two years’ time the network will have the same sized aftersales parc as it had 10 years ago, at 250,000 cars under nine years old.

Baddeley said VPS can cut the amount of time for a service from an hour down to 30 minutes, so while-you-wait services or repairs become a realistic opportunity. Volvo’s research has shown customers are prepared to wait for up to one hour and 15 minutes.

The benefits of while-you-wait are that customers don’t have to worry about insurance or driving a loan car, or wait in for the collection and delivery, but can come in, sit in a spacious, customer-friendly environment with Swedish coffee and cakes, then head on their way just over an hour later in their freshly serviced and washed car.

Baddeley said providing loan cars and collection and delivery services is a significant expense for the network. In the longer term, while-you-wait could reduce that overhead.

Volvo says VPS could achieve efficiency gains of 7.5% in the UK. That is less than in some other countries because the UK has been focused on workshop productivity for many years. Service receptionists will become service support, with a role of following up customers, helping with marketing and administration. The MST also includes an ‘Andon’ person, a floating quality control role within the workshop, who will identify problems and further efficiencies and can step in to cover when the VPST needs to come out of the workshop to talk to the customer, to ensure the system continues to function.

Over time, Volvo workshops will re-educate customers to work on an appointment basis.

“We’ve encouraged the customers over many years not to work on this basis, so it’s not going to happen overnight that we can transform the customer habit of expecting to drop the car off at 8am and pick it up at 5.30pm. We have to re-educate them to think ‘why wait?’ A downside of the current system is that every other customer is dropping their car off and picking it up again at the same time, so we have a queue. One of the fundamental things we need to deliver to customers is trust and respect for their time.

“Queues are not respectful for their time, so a booked appointment that says we will be waiting for them, ready for them, is much more respectful of their time.”

Feedback from the workshops involved in the pilot schemes of VPS have shown that customers respect the role vehicle technicians play and trust them. In addition, the technicians understand more clearly the customer’s problem with the car.

Baddeley said the three elements of VPS are tried and tested concepts, but bringing them together as a package is a new challenge for Volvo’s network. For it to work, the customer has to be able to see the technician, and more importantly, the technician must be able to see when a customer comes into the living room. This is why a clear glass wall between the workshop and the living room is part of the VRE standards.

In Sweden, all Volvo dealerships now have VPS technicians and it is standard practice for the aftersales customer to go into the workshop for all interactions. Volvo Car UK is not expecting to go that far, but it wants VPS technicians to invite the waiting customer through to the workshop to show them any issues a vehicle health check has identified.

The vast majority of the Volvo network is in the planning stages for VRE and VPS. These are major changes for a Volvo network, which ended 2014 with an average of 1.1% return on sales. Nevertheless, new car throughput per site of 400 units was the UK’s Volvo network’s highest ever figure and Hand expects that to increase as it aspires to grow sales to the 60,000 mark. His target for 2015 is a 2% return.

 

Seeking new buyers for new cars

2015 marks a new dawn for Volvo. The coming years will see Volvo cars stand out from the rest of the market and win more buyers, says UK managing director Nick Connor.

It starts with the launch this summer of its new flagship XC90 seven-seat SUV, above, and will continue with a premium large saloon badged S90 and an estate, all off the same SPA platform. Smaller cars will follow from a different platform, with V40 remaining its smallest model. All the new introductions will include a plug-in hybrid powertrain as well as petrol and diesel units.

“For a long time, we built cars that we perceived were chasing the German premium competition. It wasn’t really what we should have been doing, and within the Ford umbrella and PAG there were constraints on what we could do so as not to compete with its other brands. Now no one is telling us what we can and can’t build.

“We’ve a clear idea of what we want Volvo to stand for and we’re building cars that reflect that. We have a new-found confidence, which is clearly demonstrated in XC90 and you will see it in the new products that come through.

“This is not design that’s aping anybody else. We’re not trying to out-handle a BMW, or to do things just for the sake of being better than the competition on one particular product aspect.

“We’re trying to create a complete Volvo product offering that is luxurious, comfortable, safe, drives very well, has best-in-class powertrains and has a really unique and sophisticated Scandinavian design.”

Connor said the Volvo V40 has already put the carmaker on a growth trajectory, and it is confident of sustaining that. He said V40 has allowed the brand to attract a customer younger than the historically typical Volvo buyer, who is aged 50+. For V40, the average age profile is 43 and Connor is pleased that “the difficult-to-find 30-somethings” are finally buying Volvos.

He said Volvo has learned lessons from the C30 small coupé it sold through the turn of the decade, particularly that it needs to get its core range optimised before it considers “more off-piste” products that don’t do much for the bottom line. The UK was its top market for the C30, with sales made mostly to ‘empty-nesters’ rather than the young professionals Volvo designed it for, but it was never going to be a huge market, he said.

Connor said he’d love to see a new open-top car added to the range at some point in the future, but it is not in the cycle plan. “Having said that, once we’ve done the bread-and-butter stuff maybe we’ll afford ourselves some little treats. C70 worked well for us as a halo car, it did well in the US and the UK was the second-biggest market for it, but it’s not a priority,” he added.

 

Case study: TMS Hinckley

TMS in Hinckley is one of three UK Volvo franchisees that have already adopted the new VRE corporate identity.

TMS had held a full Volvo franchise at Hinckley as well as one 14 miles away at Coventry, but after the carmaker’s representation review in 2012, TMS agreed to reduce Hinckley to an authorised repairer and used car site and redirect its new car enquiries to the Coventry dealership in order to raise its sales volumes.

That gave managing director Len Hallows the opportunity to sell that property in Hinckley’s centre and develop a £1.2 million new-build site on the outskirts that would house its Volvo workshop and Volvo Selekt used car forecourt as well as a new Kia franchise.

The business has been live with the new VRE and VPS concepts since January and Hallows said the retention among drivers of four-year-plus vehicles has increased from around 50% to 65% in that time.

Hallows regards Volvo Personal Service as a “game-changer” as it is akin to the experience motorists associate with a local owner-operator independent garage, but offered in a premium, manufacturer-branded environment.

“The overall impact of the VRE and all the Volvo initiatives is very exciting,” added Hallows. “Our customers are seeing us in a very different light. Our premises look fantastic, it is very welcoming, comfortable and friendly and everything is now knitting together to create an extremely formidable offering with which the fast-fits will struggle to compete.

“It surpasses anything the customer can get anywhere else.”



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Comments

  • Tom Sohal - 01/06/2015 17:05

    Volvo certainly appear to have thought carefully through what's essential and contemporary for the visitors to their showrooms. It's got a clean and efficient look about it with enough people-centric touches that would make visitors feel human rather than just potential purchasers of products and services. Upmarket but not alienating to those looking for economy. I like it !

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