Some are changing their focus away from the huge high-level glass ‘sheds’ common in the industry. Jaguar has introduced a new ‘Arch’ concept to be put in place by its dealers by 2018, and Volvo is taking a ‘shop window’ approach with its ‘VRE’ retail concept, which is largely opaque, but has smaller windows behind which a car will be positioned.
Dealers need to look before they leap into new CI
Global research should encourage some franchised dealers to exercise caution before ploughing millions into future new-builds, and perhaps to seek advice from property consultants as to the building’s possible alternate uses in the long term.
Frost & Sullivan’s study last year on the future of car retailing suggested that car companies will increasingly apply an omni-channel strategy to market and sell their cars to customers. The study predicted that about 4% of all new cars, about 4.5 million cars, could be sold completely online by 2020. There were about 5,000 new cars sold solely online globally in 2011.
“New cars will be sold via a number of channels, leveraging the existing dealer network and new flagship stores, but also through online and mobile channels, with sales staff even travelling to customers to showcase the vehicles digitally,” said Sarwant Singh, partner and practice head, Frost & Sullivan.
“One of the key macro-to-micro implications of this megatrend is that we will see shrinkage of dealership space by about 20% and it will pave the way for digitalisation of the dealership stores, with interactivity with the customer as a key focus. OEMs will have to also invest in an integrated channel strategy and IT platform, which will need to be able to scale up their offering to country-wide solutions from day one as internet buyers can be sitting and ordering anywhere in the country.”
Singh suggests car retailers will have to look towards futuristic technologies such as augmented reality and gamification, to motivate and inspire sales staff.
Technology may mean fewer sales points
A point made by consultancy Magma to delegates at an SMMT International Automotive Summit in 2012 was that as consumers gathered their own information and gained more control of the sales process through technology, the need for so many sales points could decline.
An award-winning journalist and editor, with two decades of experience covering the motor retail industry, and accredited by the Institute of Leadership and Management (ILM) plus the National Council for the Training of Journalist (NCTJ)
As editor of AM since 2016, Tim is responsible for its media content, planning and production across AM's multiple channels, including the website, digital reports, webinars, social media and the editorial content of AM's events, Automotive Management Live and the AM Awards. His focus is on interviewing senior leaders of franchised dealer groups and motor manufacturer national sales companies to examine latest developments in UK motor retail.
Ian Webber - 19/11/2014 14:33
The term “Digital Dealership” is becoming widespread, although the concept may not be. But what is a digital dealership? My view is that it’s a retail space in urban or high traffic shopping areas that can engage and inspire potential customers early on in their purchase journey. These types of car brand retail spaces are not commonplace, but are starting to gain traction, as your article suggests. Since Audi launched its hugely successful Audi City store in July 2012 and Tesla opened its first retail store in the UK at London’s Westfield Shopping Centre in White City, there has been little else on the horizon in this space. Nissan Innovation Station in the London O2 is another example of brands engaging with and inspiring potential buyers in a high footfall area. It seems to now be the case that other brands are starting to move into digital dealerships, with the announcement that Hyundai is to open a digital store at the Bluewater Shopping Centre in Kent. Bluewater has a footfall of 27 million people each year, so it makes perfect sense. Ultimately, car brands need to be where people are to engage with and inspire car buyers.