Demise of the dealership

Are female buyers changing the face of automotive retail?

Australian journalist, Nadine Armstrong, Consumer Editor www.motoring.com.au  and a judge in Women’s World Car of the Year, ponders the question.

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Car dealerships of old are a dying model… But dealerships themselves are only partly to blame.

Car salesmen (and real estate agents), take the lion’s share of modern Australia’s dissatisfaction with customer service. Too many show little care for the modern customers’ needs – above all, they lack empathy.

Meanwhile the tech-savvy, well-informed customer has changed the rules completely, making the dealerships role of ‘selling’ a thing of the past.

Women in particular are driving this.

Dreaded dealerships
“Let’s go trawling the car yards this weekend, babe… It’s been weeks since I was last spoken down to,” said no woman ever.

It’s fair to say that the car-buying experience of old has a bad reputation. It was time consuming, emotionally draining, occasionally embarrassing and fraught with the potential for post-purchase dissonance.

For a woman, most often, it went something like this: visit dealership A, B and C with husband/dad/brother/token male. Decide which sales person offended you the least. Buy the god-damn car. Endure ‘mansplaining’ at every service interval.

It was broken. The need for change was imminent.

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David Blackhall, CEO of Australian Automotive Dealer Association (AADA) laments the need for change and warns of the misconceptions around the level of clout females have in the male-dominated auto industry.

“There’s plenty of blame to go around on this topic. Dealers are in the centre of the frame as far as I’m concerned. And that’s why they are partly to blame. There are a lot of dealers that just don’t grab the opportunity that’s there.” Blackhall told motoring.com.au.

And he agrees that technology is one of the driving forces behind these changes.

“The majority of buyers come [into the showroom] 80 per cent as equally well-informed as the sales people. The great thing about this, it’s been an equalising factor for the woman. You no longer need to go with boyfriend, dad, etc,” says Blackhall.

With over 14 years experience in the auto industry, dealer principal for Gillen Motors and director of Phil Gilbert Motor Group (and carsales.com Ltd board member), Edwina Gilbert, is poised for change.

“There’s been a real shift in information. [And sadly] a lot of dealers go kicking and screaming on the journey, as opposed to being on the front foot.” says Gilbert.

Gilbert speaks about customers as ‘guests’, demonstrating a marked shift in sales mentality.

“We want to treat them like a guest, with that hospitality mentality. Not just someone to derive a revenue from today.” she stresses.

“The female buyers that are researching online are as well informed as the next person. Our environment and service with the guest at any interaction is going to be the most important thing to set us apart.”

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Feigning change
The auto industry has been relatively slow to cotton on to the fact that women have significant influence when it comes to purchasing the family vehicle. Now, research gathered across the globe suggests that women are responsible for around 80-85% of all household purchase decisions – including auto.

In response, dealerships installed coffee machines, swapped rubber mats for designer rugs and subscribed to Harper’s Bazaar. Sorted.

In all seriousness, the need for change was acknowledged, but few knew what successful change looked like.

Empowered consumers meant the role of sales people was set to change, too.

“Being a good salesperson today is all about empathy. Having the emotional intelligence to understand this person doesn’t want to go through a six-position sell,” Blackhall opines.

“They know what they want and the sales person needs to engage differently with them. Women are better at that in my opinion. But males can do that too.” suggests the AADA boss.

Anna Burgdorf, General Manager Corporate Communications, Audi Australia speaks more broadly about the challenges at hand.

“Customer needs are changing and people want value for their money, given the pressure on household budgets.

“In general, the ability to research and compare cars and prices has changed things greatly, as has the increasing demand on people’s time… All this leads to the need for a frictionless online experience which in turn leads to a shortlist, a test drive booked online, then a visit to the dealership and if the sales experience is positive, then a sale to a happy customer.

“What is a little harder is for sales people to be able to accept and adapt to the changing way of doing business.” she says.

The incentive to observe, learn and adapt has never been stronger.

“Previously, a customer would visit a dealership around five times before making a purchase, and now it is once… If the [initial] sales experience is poor – there is no chance for redemption! The sale is lost,” warns Burgdorf.

With over 20 years experience as a communications specialist, Bec Brideson wants to change the way we think about women and business. Brideson believes that understanding women as consumers (what she describes as gaining the female advantage) is a game-changing growth strategy.

Needless to say the automotive industry is almost a greenfields project.

A recent new-car buyer, Brideson knows first-hand of the challenge dealerships face as independent women look to turn the traditional dealership model on its head.

Understanding the “female lens” is key Brideson tells us. Women and men want different things.

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“The approach can be more empathetic and emotional with women and the best part of that is, it doesn’t alienate men,” says Brideson.

We know that life stages such as children can dictate a change of car. For Bec, her two young children were key to choosing her current ride, a “safe” Volvo.

After several test drives, it suddenly dawned on Brideson, “I probably should test my car with the kids in the back of it.”

And that’s what happened.

“From that time on I went to dealership with kids and make them part of the process. That annoyed a lot of dealers.”

Speaking of annoying’’’

“The paperwork took 90 minutes. It’s ridiculous. I was losing the will to live. My kids were climbing in and out of cars and creating havoc,” she confesses.

Brideson’s top tip to the manufacturer with women in their sights?

“Empathy… Be more visible to them in the places they’re shopping and making purchase decisions.”

Fact. Women dominate household purchases, they will continue to earn more and own more businesses. Womenomics and the #girlboss phenomena is real.

Make it easy. Please.

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Changing landscapes
Amazon and eBay have changed the face of retail – indeed, for the most part, there is no face. Automotive brands have started to follow suit.

Tesla was first to challenge the dealership model as we know it with its ‘not-a-dealership’ retail experience the first of its kind in Australia.

“Tesla has set up a fully integrated retail model, ensuring that customers are put first in everything we do. This allows us to position our stores in locations where our customers are, creating an educational and low pressure environment to learn about our products.” said a spokesperson for Tesla.

Different? Yes. Inviting? Maybe.

Combined with its ability to complete an order online, it’s definitely a competitive step forward.

Whether the electric carmaker has nailed the car retail experience is yet to be determined. Their service model continues to challenge mainstream dealers’ much-maligned model. In the United States, mobile service vans will come to the owner to carry out service needs. If it doesn’t require a hoist, they’ll come to you, wherever you are. With vans equipped with coffee machines, kids’ activities and snacks, you can wait it out in comfort, too.

You won’t see a Subaru retail experience quite like that of upmarket Tesla (yet), but it does offer a similar ‘build and buy’ online purchase model for limited vehicles across the Subaru range.

This was an approach that proved its worth when the popular BRZ coupe was an online sell-out back in 2012.

Build and buy lets you choose your car, configure it online, pay a deposit and choose the Subaru dealer where you wish to collect the vehicle.

“The online model provides an even bigger opportunity for us to reach a new tech savvy audience,” said Subaru Australia managing director, Colin Christie.

Meanwhile, prestige carmaker Mercedes-Benz is appealing to Melbournian’s love of coffee to build a better retail experience.

As previously reported, Mercedes-Benz’s Mercedes Me concept is another car-sparse retail experience. It’s backed by a substantial online offering to cover ownership touch-points including buying, financing and servicing, with scope to provide access to services such as vehicle rental, taxi hire or even the loan of a bicycle.

Mercedes-Benz describes it as “a whole new level of individual customer care”.

Australia’s first Mercedes Me outlet will open in Melbourne in November.

When it comes to consumer confidence in online buying, Gilbert suggests we look to the people using uber and car sharing services as the ones likely to shape the change.

“The way the industry is shaping as a result of market disruptors is making us a more female friendly environment.” she says.

Disruption is good.

Home Ground Advantage
If it’s familiar territory that manufacturers are after, it’s no surprise that Melbourne’s Chadstone shopping precinct, just one of the many properties in Vicinity Centres portfolio, has been a popular choice for many car manufacturers.

Michael Mackley, Vicinity Centres General Manager Mall Space understands the power of connecting with buyers on common ground.

“We are working with a number of car manufacturers at the moment, as Chadstone is a natural fit as the automotive industry transforms to a more sales and marketing model in Australia.” says Mackley.

“Tesla Motors established its first Melbourne integrated retail dealership at Chadstone and now has a permanent retail store at Chadstone… Renault has had a pop-up display outside Myer for the past eight months where it has been showcasing their range.

“In addition to this, car companies such as Mazda, MINI, Landrover, Holden, Infiniti and Audi have all had pop-up activities in the past six months at our centre,” he explains.

“Some have also involved test drive opportunities in of the car park area which has been successful and added an additional try element to the activity.” adds Mackley.

 

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Attracting approximately 20 million domestic and international visitors per year, it’s fair to say the folk at Chadstone know a thing or two about promoting and engaging with consumers on a large scale. So what makes a good retail environment and is that where the auto industry is heading?

“We know customers are looking for an enjoyable, relaxed environment that makes it easy for them to find the product and brands they desire — along with discovering new and exciting retail options along the journey,” explains Mackley.

“They are looking for a seamless experience that they can enjoy with family and friends… This includes convenient parking, an improved and high quality leisure and dining offering and amenities that they feel comfortable to use so that they can extend their stay within the centre.

“I think it’s about having a deeper understanding of consumer needs and recognising their needs are changing and evolving at a rapid rate.”

Peter and Angela King, owners and dealer principals of Kings Cars in Geelong are ahead of the wave, opening their latest Mitsubishi showroom at Westfield Geelong.

On the choice of retail space, Peter King says: “When you go into Myer there’s not an expectation to buy, it’s okay to look. [As a result] You appeal to a far wider range of people. There’s no pressure.”

While King agrees the model is changing, he does not believe dealerships or sales people are a dying breed.

“You [simply] need sales people of a different mindset. You need to be more facilitating… We call our people store facilitators. Because we don’t pay commission, there’s always been a lower perceived pressure in our business.

“The model needs to be tweaked. You still need traditional dealerships but they need to be complimented. You need to go where the people are,” urges King.

“Generally, most people working in our businesses are not from the [auto] industry. We’ve got people who’ve owned fish and chip shops, [who are] nurses or whatever. You’ve got to employ for attitude. The people we employ like people!

“Our industry has always tried to control the sale, and that’s not right. You should be there to assist, not control. Consumers are savvy. We are all consumers and none of us like to be sold to. We like to be assisted,” King stated.

King describes the future dealership as a “hybrid approach” to the auto retail space. Not only can you browse, test drive or buy your vehicle at Kings in Westfield, you can take delivery of your vehicle or drop it for service there, too….

And all while enjoying the broader retail offering at Westfield. One location, many boxes ticked.

Road Blocks
We know the automotive industry is changing at a rapid rate. So why not the dealership experience? The car-buying experience is a moving feast. Tech-savvy, well-informed consumers – both men and women – are driving change and old-school dealership models no longer cut it.

There’s no need to emasculate, or ‘pink wash’ the experience – making it better for women will make it better for everyone.

Brideson poses the question “how can we repurpose the dealership real estate” to make it a better experience… One that keeps you coming back, even?

The opportunity is begging – why is it taking so long?

Blackhall begs for change as we enter what he describes as “a perfect rational market”.

When buyers and sellers have the same knowledge, the same facts, the dealership experience needs to be different, he suggests. Indeed, the writing is on the wall…

“When you have that perfect rational market, the dealership experience has to migrate from how can I help you, to why should I do business with you? What is the journey you’re going to take me on?”

“If you can’t modify your sales process and culture to deliver that, you won’t be around in five years time.”

 

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