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This past summer I had the privilege to visit dozens of dealerships in just about every major city of eastern North America. Despite the rumors that the traditional brick and mortar business model is headed the way of the dinosaurs, dealership owners of all sizes and brands continue to build facilities that are increasingly elaborate – and expensive. Even startup stores that ARE off the beaten path were planning moves to million-dollar locations on the main thoroughfare.
The International Council of Shopping Centers has data (graphic below) that show buyers still make physical locations worthwhile, but Macy’s announced last week that they will shutter 5 percent of its stores – some 35-40 locations. Do you think near-instantaneous delivery by the likes of Amazon and other online retailers may be taking its toll on traditional retail? Of course it has.
It appears that not even TrueCar’s impact on the sales process, the $100 million invested by AutoNation to launch it’s SmartChoice Express with an Apple-style buying experience, or a host of online broker websites that offer an online-only buying experience are going to eliminate the need for a physical location any time soon. On the west coast of Florida where the economic recovery continues to lag behind the rest of the nation, there are several dealerships growing their concrete footprint.
I’ve sat in conferences and heard a major classified website explain how they envision a shopping experience that only requires shoppers to test drive the car, while at the same time sharing statistics that half the time buyers purchase a vehicle different than the one for which they first searched.
And that’s why the physical dealership will never completely disappear. Personal transportation may be a commodity, but isn’t an iPhone, it isn’t yoga gear, and it’s not a piece of designer clothing. What someone drives will always be personal; a form of self-expression and identity for many people. Sure, for some it is a pure appliance, but that is a tiny minority.
Buyers internalize so many aspects of their vehicle, from how it looks curbside to how they look in it. How the seats and steering wheel feel, as well as the sounds and smells all play a part in someone’s vehicle choice. And the more expensive the product, the more individualized things become. A BMW interior smells vastly different than that of a Jaguar or Cadillac. The comfort and aesthetics of a Range Rover are in many ways diametrically opposite that of a Lexus.
And with used cars, the differences are even more dramatic, as how the seat was broken-in, odors, accessories, and overall condition play a major role in the purchase decision.
Perhaps the only other purchases that are so personal for buyers are certain musical instruments and wedding bands. Both those items are kinesthetic and visual – and auditory in the case of something like a guitar or saxophone. Both are an extension of someone’s character, a part of their image and place in the world.
And some of these factors extend to the dealership and even the brand. There will always be that segment of buyers who wants to boast to their friends that they bought the car in the middle of the showroom floor or special-ordered it and watched its progress down an assembly line or tracked it on the ship across the ocean. As long as people care about what they drive, the auto dealership showroom is going to have to be accessible. It is going to have to embrace the current lifestyles of shoppers, and it is (most importantly) going to need quality staff members who are committed to creating a great experience for car shoppers.
Tom LaPointe CarChat24 CHAT GURU
www.carchat24.com/ 24/7 Interactive Automotive Dealer Website LIVE CHAT Solutions Hosted or In-House Options – FREE web chat software 727-638-0195
A U.S. Marine Corps veteran, Tom has an MBA in Marketing and is an automotive writer and author with nearly 20 years experience in virtually every aspect of the retail auto industry. He has been involved with the internet from the beginning, building websites at Johns Hopkins University in the 90's, and has been a performance leader in nearly every dealer role, from sales and service, to BDC / internet sales and viral marketing.