How to turn dealerships into retail destinations

Most car buyers will visit no more than two showrooms before making their choice. Why plod around forecourts when you can browse from the comfort of your home? In this new retail environment, brands must take service to the next level

 Let’s face it, car dealerships don't have the best reputation. The hard sell, the haggle, the hassle, hidden extras… Who has time for that? Contrast this with the ease and instant gratification you feel when buying gadgets, clothes groceries and other items online, banking without queuing or being waited on by a Genius as you play about in the Apple Store.

As we mentioned in part one of this series, footfall to dealerships has been steadily declining as buyers turn to the internet. What they want and expect is less clear than it used to be; not without a little research, anyway. They visit OEM sites, read reviews or reports from industry commentators and consult social media. They can also use car comparison sites such as CarWow and Edmunds, and even handle trade-ins online through someone like WeBuyAnyCar.com. Is this really, the “Death of A Car Salesman”?

Admittedly, quality time with a customer is all too rare, but that doesn’t mean face-to-face interaction can’t be crucial to conversion. Six out of 10 buyers may start their research online, according to the Google/TNS Auto Shopper Survey, but 73% of respondents said they would not fill out an online lead form. The buyer’s path to purchase is now more fragmented than ever and the dealership needs to adapt.  

Focus on the customer

One company leading the way, finding a new way, is Tesla. That’s because they’ve had to. State law, “protectionist legislation” in their eyes, prevents the brand from directly selling to customers at dealerships. Instead, they have created showrooms and smaller galleries in high-traffic areas such as London’s Oxford St, where customers can learn about the technology, sit in the car, have a walkthrough with a specialist, book a test drive, configure their dream vehicle on touchscreens and discuss the realities of electric vehicle ownership.

No one is on commission. Everyone takes their time. It’s the complete antithesis of the hard sell. It feels more like an airport lounge or exhibition space. However, there is a purpose. The aim is to remove any sense of doubt in the customer’s mind, according to Ganesh Srivats, Tesla’s vice president of North American sales (who used to be senior VP at Burberry). What does this car do? How much does it cost? Is it right for the me?

It’s also about becoming less reliant on a traditional franchise dealership model and using online to better meet customer needs through a combination of breakthrough technology, customisation and convenience. "We like the idea of owning the entire process," says Srivats. "It creates an information loop from our customers straight into manufacturing and vehicle design."

Focus on what’s important to them

Knowledge will always impress a car buyer but it needs to be relevant to them. That means understanding their requirements, making observations and answering questions. Tesla is not the only brand to wise up in this way. BMW has more than 2,000 “product geniuses” in its network, informing customers about the technology and how a customer can get the best out of the car. The dealership now becomes a deep dive centre where customers can really get to know their shortlisted models. There is a benefit to the bottom line too: BMW registered a 10-15% increase in high-margin options.

Rockar Angels are on a mission to revolutionise the car-buying process, offering an end-to-end process in under 10 minutes with “not a salesperson in sight”. Their retail experience in partnership with Hyundai at Kent’s Bluewater was very popular with 50% of visiting prospects completing their purchase online. Their average age was 39, compared to the industry average of 56.

JLR is poised to do the same with Rockar at Westfield Stratford, where Angels will show window shoppers around six display cars, offer advice and assist with in-store configurators. They will receive neither sales training nor commission. Instead, their job is to empower the customer with the knowledge they need and support them fully throughout the process. Visitors are encouraged to go at their own pace and order at home if they like.

Dial up the drama

Customers appreciate patience and attentive service but where’s the excitement? These store ‘experiences’ are often anything but – offering only leather samples, colour swatches and the odd touchscreen. Go further. Go for sensory overload. Think smell, touch, sounds… Engineering as performance art. BMW has the right idea with its Tokyo Bay facility, which features vehicle showrooms, brand experience centres, three cafés, a gallery space for events and 3D visualization areas. The showroom becomes a digitally enhanced destination offering myriad reasons to stay.

Obviously, that is an extreme example. Few brands will be able to secure that size of plot, particularly in highly desirable city centre locations. If only there were a way to allow each customer to explore multiple models in a boutique showroom? Sounds like a job for virtual reality. Audi thinks so. That’s why they are making their entire range (comprising more than 70 cars) available to test drive anywhere, from the city centre to the moon. Simply strap on an HTC Vive or Oculus Rift headset. You can also choose paint colours, wheels, seat upholstery and infotainment modules.

The added practical benefit of using virtual reality in the dealership is that you overcome the limited number of pre-production models in circulation, as Mazda did last year. They toured 119 showrooms with Oculus Rift headsets, which allowed customers to look inside the car and customise it. The technology was popular across all ages apparently, with launch orders tripling and 70% of their March sales target being achieved through virtual reality.

As the technology becomes more commonplace and the user feels even more part of virtual reality thanks to greater responsiveness and haptic feedback, the level of engagement can only deepen. Staff will undoubtedly require extra training to be able to serve the customer in these virtual worlds, to pick out benefits in the moment, but dealership showroom staff continue to be a vital link between your product and the customer. So the investment is worth it.

Connect digital and physical

Did you know that one in three shoppers researching using a mobile either located or called a dealer from it? Or that search interest in “car dealerships near me” doubled between 2014 and 2015? Inventory queries – searching to find if the right car is in stock – is growing more than four times faster than overall auto search interest in the US. That’s because customers still want to pick up their chosen car as quickly as possible, so they turn to the closest place they can.

It gets better. McKinsey research tells us that 76% of prospects research in dealerships. Not surprisingly, one of the main queries is “Am I getting a good deal?” If customers are already online and in ‘car mode’ then it’s a great opportunity to supply them with the information they need to make a decision. The smartphone or tablet can be a useful interface between brand and buyer in the dealership – from watching a video about parking assist to receiving a personal finance plan.

In part two of this series we talked about being more useful to the customer, and forming a clearer picture of the individual based on search data. Imagine if a buyer could pick up where they left off online as soon as they enter the dealership. Your product assistant accesses a profile of each customer as they log in to the showroom via wifi. They ascertain how far along they are in their research, pull up their preferences and queries. “Hello Miss Jones, I gather you’re interested in the new crossover SUV but you’re looking to up the fuel efficiency and add a few extra safety features. I have a couple of suggestions. This way, please.”

Or how about incorporating iBeacon technology, which connects to their smartphone or wearable tech via short-range Bluetooth, to trigger helpful content and additional options as the customers inspect different parts of the car. When automotive brands do their job well, the dealership will be the end point where customers confirm their decision to purchase. That’s because they have shortlisted online and collected their thoughts, some of which you will already know.

In the US, dealerships have enjoyed a 61% increase in conversion despite posting a decrease in footfall over the past five years. Those customers are more motivated than passers-by and focused on finding out a few key things prior to making a purchase.

Even simulating the dealership experience can have a positive impact on footfall. Fiat Live Store, “the world’s first point-of-view dealership” offered Brazilian internet users a personalised, real-time tour with an expert. They could ask questions about different models and book a test drive. The campaign attracted 465,000 users each month and 67.4% of video chats led to test drives in person. Just as virtual reality facilitates a test drive away from the showroom, 360 video and augmented reality can encourage customers to enter a showroom.

From pop-up concept stores and virtual product showrooms to test-drive centres and car superstores that offer on-the spot buying, the dealership can be anything its customers need it to be in that given moment. The key is to make it a useful combination of hi-tech and humanity, offering them something they’ve neither seen nor heard before. Then they might just ‘buy it now’.