The changing role of the dealer: Why car retailers need to get smarter

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Alastair Duncan of the AutoNetwork gathers views on the changing role of the car dealer.

Nowhere is the experience economy writ larger than in the booming car market. 1,376,889 cars were registered in the UK between January and June, higher than the previous record of 1,376,565 in the same period in 2004. Despite this, our general view of car dealers remains stuck in a time warp, ranking them amongst estate agents and politicians on the trust level. What are they doing about it?

Plenty, say industry experts. Ross Sleight, chief strategy officer of Somo, sums up the challenge. “Customers no longer see the physical dealership as the only source of information. They are far more likely to research online, and benchmark prices on their own”

It’s a complex business. Dealers have to predict how many cars they will sell a year and effectively buy these in advance. Car brands spend most of their money advertising desirability to attract new customers, yet bank customer loyalty too easily. It’s easy to see why customers feel left out.

Car manufacturers have to ensure three things, claims Sleight. “A multiscreen digital presence that engages through content, a shop pregnant with experiential technology, and to bring cars and digital experiences closer to customers in high footfall locations rather than wait for the customer to come to them”

Sites like Autotrader and carkeys.co.uk already provide services to help people choose and compare models. And both Audi and Vauxhall have developed successful pop-up store approaches.

More systemic changes are needed, according to Mike Mulholland, managing director of Loyalty Logistix. “The focus is shifting from transaction to engaged customer experience, as manufacturers offer better rewards for loyalty and invest in retail as a proper extension of the brand.”

At the luxury end of the spectrum, brands like Bentley, Bugatti and Rolls Royce see their cars as a ticket to a lifestyle experience, where the sophistication of the machines is paramount. Ben Whattam, managing director of Keko London, works with Bentley Motors and is, as you’d expect, discreet and succinct. “It’s not just about what you get with the ‘metal’, it’s about the access and engagement with the world that surrounds it. Luxury customers prefer not to be overtly sold to as, frankly, they are successful people used to making their own decisions.” A lesson for all car brands, perhaps.

Omaid Hiwaizi, chief marketing officer of Blippar, has the final word. “Consumers have more control than ever before and retailers must embrace this, taking models closer to the consumer and giving them more control of their entire purchase and ownership process.”

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