In 2012 Audi opened its first digital showroom in Mayfair in central London. Compared with the spacious, car packed showrooms familiar to most buyers, the Audi City London outlet is tiny by comparison, with just a handful of the firm's most expensive cars displayed.
The wow factor comes from floor-to-ceiling powerwalls comprising a bank of LED display screens linked to high-definition touchscreens where customers can configure their new Audi. Once they have virtually built their car, it is transferred to the powerwall and the customer can manipulate the display to look inside, open the boot and even virtually drive off to hear the engine sound.
Innovative media
“Audi City originated from the idea of taking Audi closer to the places where our customers live and work, in the downtown areas of international cities,” says
Horst Hanschur
, head of Audi global network strategy.
"Using innovative media technology, we can present our entire model line-up entirely in digital format within a very compact space. This innovative concept defines what Audi stands for and what our customers expect of us: Vorsprung durch Technik."
Not to be outdone, Mercedes launched its answer, "Mercedes me" outlets, last summer. The broad concept is the same. "With the "Mercedes me" stores, Mercedes-Benz is increasingly using representation in city centres to bring it into direct contact with existing and prospective customers," says company spokesman Christoph Sedlmayr.
Mercedes has had inner-city dealerships since 1995 but the Mercedes Me outlets are very different. These exclusive location stores have a restaurant, lounge, private consultation rooms and an exhibition area for art, readings and concerts.
“In normal car dealerships, the focus lies on consulting, selling and service. A Mercedes Me store is mainly about experiencing the brand in an unconstrained atmosphere,” Sedlmayr says.
And there’s the heart of the matter. Luxury carmakers are no longer just selling cars. They are selling their brands more forcefully than ever before and the enabling medium is the availability of increasingly sophisticated connected communications technologies.
Even volume makers such as Ford can see how the wind is blowing. It is rebranding 500 dealerships in Europe as Ford Stores with dedicated space to sell its new premium Vignale models. "The Ford Store is where the Ford brand will express itself at its best," says Gaetano Thorel, marketing vice president, Ford of Europe.
Tesla founder Elon Musk also adopted the specialist city showroom model albeit for different reasons. He needed to educate consumers about electric cars and believed that traditional dealerships were inextricably linked in people's minds with conventional sources of power.
Writing in his blog in 2012 Musk says, “By the time most people decide to head to their local dealer, they have already pretty much decided what car they want to buy, which is usually the same make as their old car. At that point it is largely just a matter of negotiating with the dealer on price. Tesla, as a new carmaker, would therefore rarely have the opportunity to educate potential customers (about Model S) if we were positioned in typical auto dealer locations.
“That is why we are deliberately positioning our store and gallery locations in high foot traffic, high visibility retail venues, like malls and shopping streets that people regularly visit in a relatively open-minded buying mood.
“This allows us to interact with potential customers and have them learn about our cars from Tesla product specialists before they have decided which new car to buy.
The product specialists are also trained to answer questions about electric vehicles in general, not just ours. They are not on commission and they will never pressure you to buy a car.
“Their goal and the sole metric of their success is to have you enjoy the experience of visiting so much that you look forward to returning again.”
BMW has also introduced product specialists for largely for the same reasons as Tesla – to educate customers about the technology available in its cars and, more importantly, how to use it.
BMW rather loftily calls its techies “product geniuses” inviting some serious quizzing from well-educated customers. In its defence the BMW approach is rather like the staff in Apple’s Genius Bars: their job is to inform not to sell.
Bottom line
Their presence has made a big difference to BMW’s bottom line. Results show that when customers have the high-tech features explained to them individually they are more likely to buy optional extras. BMW estimates that product geniuses have upped sales of high-margin options by 10-15 per cent.
"Geniuses have been appointed to create a less pressured and more personal sales experience," says Paulo Alves, managing director, BMW Group Ireland.
“They are product experts who offer existing and prospective customers as much time as they need to discuss their BMW of interest. The BMW Genius is not a salesperson.”
BMW started the roll-out of product geniuses last year and now has about 2,000 in its network worldwide. BMW Ireland is hoping to have experts in all 14 of its outlets by mid 2015.
They are also part of a wider retail programme launched by BMW earlier this year. Called Future Retail it includes virtual product presentation as well as a new BMW iStore in London to showcase its electric cars.
Young buyers
One of the positive spin-offs for Mercedes from its Me outlets is that it seems to have finally found a way of penetrating the consciousness of much needed younger buyers. The outlets combine face-to-face selling with an online alternative.
“At the end of 2013, Mercedes-Benz was the first premium manufacturer to launch online sales of new vehicles in collaboration with the Hamburg branch,” says Sedlmayr.
“The resulting test drives show that this sales channel is primarily reaching young people in their mid-twenties – a target group for us in itself.”
Stephanie Brinley, senior analyst at IHS Automotive, says the increasing complexity of cars and sheer volume of features now available means the dealership model needs to become more customer-centric.
“Another factor is that younger consumers are more experience oriented than material oriented,” she adds.
“Given that they value the experiences things they buy provide, there is an opportunity to meet that need with a dealer model that delivers an experience along with the car.”
