Experiential retail.
Direct-to-consumer commerce.
Look for a lot of coverage on these two topics (closely linked topics, in fact) in Canadian auto dealer in coming issues. They are very important in terms of the current transformation of retail across categories.
They both represent topics that will need deep and broad coverage, so I will simply introduce a few ideas here. And as retailers, chances are you’re already thinking about them.
Both are enabled by technology’s ability to separate the transaction from the retail location. But they represent a more sophisticated way to frame the online shopping versus in-store shopping discussion.
In effect, they are a blend of the two.
The core idea is simple. Consumers will use the physical retail location to touch, feel and experience the product. The actual transaction will then be completed online.
If this sounds a bit like the Tesla model, well, it is. But it is much more than that, and in many ways it is less sinister in terms of the implications for car dealers.
Consider a wide range of examples. The Apple store is well known as a retail environment that is all about letting consumers try and experience the product before they buy it. It’s certainly possible to complete the transaction in store, but only if the product you want to buy is one of their base configurations.
For Universus, our art department and video production teams need more horsepower than the basic computers provide, so we cannot buy in-store. We can only complete the transaction online.
That doesn’t reduce the value of the retail location as a place to touch and feel new products, take a test drive (sorry, couldn’t resist) and access the expertise of their geek bar.
In fact, it’s amazing how quickly the role of physical location as experiential centre rather than transaction location makes sense.
Consider Nike. They are delisting their shoes from a variety of well known retail channels. They are reducing the number of retailers selling their product “as part of Nike’s focus on elevating consumer experiences through more direct, personal relationships.”
Translation: they want to control their brand, and the experiences consumers have interacting with their products. And mass market retailers, shoe warehouses and the like don’t provide the experience they want.
We‘ll be seeing many more examples. Car dealers will do well to watch them.
Why?
In part because your OEMs are. Your dealerships already represent a direct-to-consumer channel, but one that has been transaction focused rather than experiential focused. Your OEMs are exploring new ways to create great customer experiences, both online and in your stores, and they will take cues from Apple, Nike and others.
Also, you need to watch because these other retail experiences will shape consumer willingness (and even enthusiasm) to separate the time spent in-store from the actual transaction. If a significant number of retailers that customers engage with in other categories go down this path, they will expect those options at your dealerships.
They may expect to be able to talk, learn and test drive, then go home to complete the deal. Our industry will need to be ready for that.
So there you go. The tip of the iceberg. Let’s explore these areas together in much more depth, as they will be a key trend shaping retail going forward, including the retailing of vehicles.
