Car dealerships offer case study for remaining relevant
To excite customers requires more engaging brand experience
In an age when we have so much information at our fingertips and when potential customers can research the details of any product whenever and wherever they happen to be, brands across categories are struggling to remain relevant. One of the most intensely impacted categories – and an excellent case study of how to remain relevant, or not – is cars, and the fate of traditional car showrooms.
Not only do car brands have to entice increasingly time- scarce customers to their showroom, they also have to provide an experience that caters to visitors who may already have extensively researched their potential purchase. In this changing landscape the out-of-town showroom is simply not cutting it.
As the car-buying process evolves, car dealerships must introduce radical and rapid change if they are to resonate
with today’s car buyer. Simply put, consumers are no longer interested in driving to industrial parks on the outskirts of town to speak to car dealers who too often know little more about the car than they do. Our research shows that dealership
visits in most Western Europe markets have become much less frequent in the path to purchase, with one or two visits at most. Car brands have to be far more proactive in engaging and enticing their audience.
Old tactics fail new expectations
As with most major purchases today, car shopping begins online. Nobody today looks to spend the amount it costs for a new or second-hand car without exhaustive investigation on the Web, seeking to understand the differences, attributes and performances across those cars they desire. Researching through blogs and looking for discounts on comparison sites - in fact, investigating your dream car can be done almost entirely online. The showroom visit is the final step on this journey, where buyers can justify their decision and test-drive their new car, although our research shows even the test drive is on the decline. This means traditional key sales tactics are no longer valid. The idiom, “75 percent are more likely to buy if it's been test driven,” no longer holds.
The automotive industry as a whole has been slow to react
to the changing world of the consumer. The industry still expects potential customers to spend their valuable weekends traipsing out to showrooms, where they'll be given a weak cup of coffee and forced to listen to salesmen convince them they have their best interests at heart. Manufacturer websites generally still have poor navigation and unclear information – a clear sign that what they really want is to bring you into their space to control the sale.
Go to the customer
Dealerships need to take themselves to the customer. The advent of pop-up is beginning to be seen on a still limited but more regular basis. Innovative car brands, such as Tesla, are beginning to appear in high footfall shopping centers and travel hubs, while test drives are being organized through brand spaces and connections to nearby car parks. Gradually we are seeing car brands reacting to time-starved modern lifestyles, where the test-drive comes to you. The Fiat Live Store in Brazil even allows a one-to-one consultation without the customer having to leave home. People can get an online tour of vehicles from consultants wearing head-mounted cameras.
Innovative brands are also reconfiguring the showroom to create more contemporary, welcoming environments, less of a male domain as more women are making the decisions on car purchases. Research suggests women influence 80 percent of car purchases in the US. The Lexus Intersect space in Tokyo, for example, focuses less on the vehicles and more on the whole Lexus lifestyle, from food to fashion. These are easily accessible retail spaces where the customer can fully experience the brand. The traditional, slick-suited salesman incentivized to deliver the hard sell is making way for more attentive and approachable assistants who can foster a relaxed dialogue and help support a longer-term relationship that importantly extends beyond the purchase.
Audi City in London has created a tech-enhanced space where visitors are encouraged to explore and configure their ideal car using touchscreens and multisensory displays. Staff guide customers through a huge range of options, understanding their needs and explaining the implications of each choice.
As the look and performance of cars becomes more and more similar, showrooms need to highlight the importance of technological innovation and personalization. This will become even more critical once the industry decides which way to jump on the connected car debate.
The dealership process is being fundamentally reinvented. Just as supermarkets have segmented into superstores and convenience stores, so dealerships must consider how alternative sales formats can better reach their audiences. Dealerships need to proactively begin a dialogue with customers long before they reach the showroom, and maintain it long after they have left. They need to make the service experience outstanding and the space an environment where the customer can get to know the brand and vice versa. Creating a reason to visit is key to the success of the dealership. It must be a space where customers can take the full purchasing journey – from dreaming to exploring and locating. Dealers need to help customers meet and connect with the brand and get a taste for the manufacturer's experience signature. This is what will drive sales - not bad coffee on an industrial estate.