Dealers and automakers should explore whether tomorrow’s dealerships still need to look like they do now.
Automakers and dealers are beginning to experiment more with different ways and different places for consumers to interact with and experience new vehicles.
Shopping mall mini-locations and on-street experiential marketing campaigns present diverse touch points where consumers can familiarize themselves with the array of automotive technology advances from the last dozen years. If they give consumers a chance to see, drive and even arrange purchases, they are welcome — so long as they do not run afoul of state franchise laws.
Indeed, given the pandemic-accelerated changes that automotive retailing has undergone during the last three years and the vows by automakers and dealers to maintain inventory discipline, it may be time for a broader rethink of what it really takes to properly — and profitably — represent a manufacturer.
It was not that long ago that fights over factory-mandated facility requirements were common between automakers and their dealership networks, often causing huge rows over trivial matters such as tile size or paint colors.
Those troubling situations — in which far-removed automakers would attempt to dictate how a local dealer should present their business under the guise of “protecting the brand” — still occur, of course, but both their frequency and ferocity have thankfully moderated.
As a rule, dealers tend to know their own markets best, and they should feel motivated to both maximize profits and keep customers coming back. They should be free to explore different footprints and presentations, especially when nearly all consumers do so much of their top-of-funnel car shopping in front of a screen instead of inside a dealership.
If dealers can successfully reduce overhead expenses without hurting sales, they should be free to do so as long as the customer experience doesn’t suffer. Ultimately, that may translate into fewer required spaces for which to display new vehicles. It could even mean off-site storage of inventory, which is less expensive, to be accessed relatively quickly for delivery.
Now that so much of new-vehicle shopping is completed online and digital retailing has so altered the industry’s landscape, perhaps it’s time that dealers’ landscapes loosen up a bit as well.
