Reimagining the showroom: The future of automotive retail

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Those car buyers, they are a-changin’. Armed with statistics and reviews found online, and expecting a seamless experience, even the least clued-up consumers arrive at dealerships with high demands. Car companies face a modernisation race to keep up with the changing man and woman behind the wheel.

It used to be so simple. Consumers would “shop around” by visiting five or six retail outlets, before making their final decision about which car to buy. While management consultancy McKinsey suggests four-fifths still like to try-before-they-buy, customers now visit dealers on average only once in the build-up to a purchase.

At the crux of the issue is consumer dissatisfaction with car companies’ traditional retail offerings. An Autotrader report from earlier this year found that only 0.4% of US consumers are happy with the current car buying process, and over half (53%) would buy a vehicle more often if the process were improved.

That is not to say consumers take their outlay on a new car any less seriously. According to a recent Ernst & Young (EY) report, consumers spend an average of 10 hours conducting online research – more time than for any other major product, including smartphones and financial services – and 80% of respondents claimed to use multiple devices to seek out information.

Like businesses of all kinds, car manufacturers must adapt their retail approach to match consumers’ increasingly busy lives, both in the real and digital world. At a bare minimum, as the EY research suggests, automotive companies must ensure that they offer engaging online experiences across desktop, tablet and mobile devices. But to win, brands must go much further.

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In this day and age, companies simply cannot guarantee that consumers will take time out of work and home life to visit a dealership. The basic premise of a showroom visit is still valuable. But as consumer expectations rise, and technology develops, the showroom is becoming a more flexible concept. We have identified three key trends that are being trialled.

The remote showroom

In 2013, Fiat launched ‘Live Store’, the world’s first ‘point-of-view’ car dealership. For 12 hours a day, Brazilian internet users could log on to take personalised, real-time trips around a Fiat showroom, guided by an expert wearing an eye-level camera. The Fiat expert would answer users’ questions about each vehicle and – if impressed – customers could arrange a test drive at their local dealer.

The results were striking: the Live Store attracted an average of 465,000 monthly users and around 280 live video chats per day during the campaign. More importantly, 67.4% of the video chats led to real-world interactions in the form of test drives – contributing to a 19.3% year-on-year increase in Fiat test drives in the region.

The new-model retail showroom

Even those consumers willing to make the trip to a car dealership are loath to travel far from their daily path, particularly in cities. Urban populations are on the rise across the globe – the World Health Organization estimates that, by 2017, the majority of people across the planet will be dwelling in cities. Particularly in Western markets, convenience store culture has bred a new type of urban shopper.

To get closer to consumers, Volkswagen-owned luxury car maker Audi marque is busy expanding its chain of Audi City dealerships, with prominent “downtown” sites already open in Moscow, London, Beijing and Berlin. Yet, while these urban outlets may improve footfall, the cost and availability of land means such showrooms are smaller and allow for a shrinking number of models to be displayed.

Audi believes it may have found an answer to this conundrum with virtual reality (VR), a hot topic in the technology world. If ever proof were needed of the growing excitement around VR, consider Facebook’s $2bn acquisition of the maker of Oculus Rift VR headsets and Microsoft’s excitement about the “mixed reality” HoloLens gadget.

Which brings us to our third trend…

The mobile showroom

Nicknamed the “dealership in a briefcase”, the Audi VR experience allows prospective customers to configure their ideal car using a specially designed headset. Wearers can sit behind the wheel and view the car in three-dimensions, with life-like sounds provided by Bang & Olufsen to enrich the experience. The full range of models, with all imaginable colours and specifications, can be accessed, something previously unrealistic even in the biggest of showrooms.

Under the direction of Audi’s global sales and marketing head, Luca de Meo, the first dealerships will introduce the VR experience by the end of 2015. And the brand is already plotting the development of a mobile solution to allow consumers to virtually test vehicles using their own Oculus Rift or HoloLens at home.

Getting consumers to trial a car is still the number one priority. But that no longer has to mean them getting behind the wheel of a car at their local dealership. The more compelling and realistic these experiences become, the bigger the long-term prize in terms of sales leads and conversions.

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