A London telephone booth has turned into a dealership. Now labelled as the world’s smallest dealership, it is only 0.8 square metres in size.
Rewind back ten years to when most people didn’t trust the internet. Today, we are purchasing clothing, machines, gadgets, groceries and a whole lot more online. Including cars from a dealership.
Do you remember the last time you bought a car? It begins with researching, then contacting the dealership, test driving, financing, and finally closing the deal. It isn’t a very satisfying retail experience.
Vehicle retailers have recognized the consumer dissatisfaction and are trying to respond to incremental changes.
For manufacturers and dealers alike, shifting from a product-driven to a customer-centric approach has long been the focus. This has stemmed from changing customer behavior and expectations.
Model shift – From product to experience focus
Dealerships are realizing that what happened to the brick and cement structures of print publications is now knocking on their glass doors in their world of selling cars. A change in dealerships format, size and concept are necessitating. There is an increased emphasis on meeting the customer in their own environment, which is why companies are going digital.
There are many automakers, and vehicle companies alike, already selling vehicles online. Ford and Dacia in the UK were pushing online sales channels in 2014 and their dealerships were more of a backup. At Tesla, they are also making use of online processing. Other companies are opening flagship and experience dealerships in city centres like BMW and Daimler in London and Paris. These dealerships create experiences similar to a coffee shop, popular in places like Tokyo. In South Africa, one such example of an experience store is the Dapper Coffee Co. – a coffee shop and classic/luxury sports cars dealership.
Most notable is Audi who made headlines in 2012 for their dealership, Audi City in London. It was said they were “preparing automotive retail for the future and complementing its dealer network with a new format.” Much like the digital brochures automakers have on their sites, Audi created a building that was a three-dimensional version of that. It had massive capacitive touchscreens on the wall that can display and rotate vehicles in high-res. All options available online, such as car, colour, rim and/or trim preferences, can be changed in life-size. It’s like an Apple store for Audi’s but is much more interactive.
Audi had planned to construct 20 dealerships worldwide by 2015. Up to now, the stores have rolled out into various popular cities which include London, Beijing, and Istanbul. Audi City Paris was opened in June 2016.
All the while only having three to four cars on display, such future-oriented dealerships have a virtually unlimited retail space. In addition to an entire model line-up, there is also an infinite number of optional configurations along with the possibility of even showing past models.
A virtual vehicle on-board experience is also a part of the future digital-showroom. After your vehicle has been selected and fully customized, you can then take it on a test drive through virtual landscapes.
It’s a new breed of dealership which is expected to not only bring in a high number of visits but also provide a unique brand experience. Apart from the ability to buy cars on your lunch break, it will also allow the selling of vehicles and drive leads into conventional dealerships. The dealership network is about to undergo a massive structural change in the coming years.
PEUGEOT Launches World’s Smallest Car Dealership
From the smallest Audi dealership in the UK measuring 420 square meters, Peugeot pushes it even further to 0.8 square metres.
An iconic red K6-series phone box has been converted into a fully connected online showroom. It is opening for business on the 12th September. It makes use of PEUGEOT’s unique e-commerce system, ‘Order Online’. The phone booth even has a name, labelled as PEUGEOT Russell Square, it will operate between 7 am and midnight every day until the end of the month.
Inside the phone box is a tablet connected to the e-commerce portal, where buyers can browse, configure, finance and ultimately order a brand new car. However, the ‘Order Online’ system is not a new one. It was launched in January this year.
From all the major automaker’s, PEUGEOT’s e-commerce site was the first to allow buyers to complete the entire process of purchasing a new vehicle from start to finish. The first order had been placed within 12 hours of launching and has since hosted nearly a million users. According to Peugeot, more than 134,000 vehicle configurations have been completed with more than 35,000 part exchange valuations received.
David Peel, PEUGEOT Managing Director, said:
“The World’s Smallest Dealership is a perfect example of how technology continues to change the way we research, view and purchase products.
Not that many years ago, the process of buying a new car involved reading lots of printed literature and trawling around Dealerships. Now, despite a car being the second-largest purchase most people make in a lifetime, it can be done from anywhere – even from inside a phone box.
We recognise that the retail landscape is ever-changing and consumers like to have the freedom and flexibility that comes with browsing online, without the pressure of having to negotiate or make snap decisions. Order Online puts our customers firmly in the driving seat, allowing them to chop and change what they want and make a decision in their own time, in their own space.”
Vehicle sales are still on the rise
The introduction of autonomous cars, carsharing and ridesharing facilities are transforming how people get from point A to point B. While we await the launch of services such as Locomute in South Africa, Uber seems to be doing pretty well. (Locomute is a car sharing scheme, designed for drivers who need a car for a short or one-way trip). All the while public transportation is readily available around the country, South Africans still favour having cars.
According to NAAMSA, August 2017 displayed aggregate new vehicle sales of 49 222 units. It is a 6.7% increase, which is 3 091 units, over the same period last year which saw sales of 46 131 vehicles.
However good the sales, it is the landscape to make these purchases which are changing. Successful digital players are reorganizing their operations around the consumer and E-commerce is becoming is increasingly popular across many different industries.
The effect of direct-to-consumer
New channels provide the automakers a platform to learn more about their customers.
“There’s still a lot to come out in the wash here. OEMs need time to adapt – they traditionally build and sell a new model of car every five or six years, and this episodic way of working isn’t conducive to ongoing optimisation – the test and learn mindset that online retail demands.” – Ben Davis
This may also clash with dealers. Peugeot has the functionality in place but how this will optimize the purchasing journey is yet to be seen.
Multichannel services and experiences have lead to the big change in consumer expectations. The flexible, fast and convenience of online retail are also an influencing factor.
A customer will still need to go in to test drive if they so wish, but a purchase without a trip to the dealership is nearly possible. Ordering online also presents the ability to view all options/features available while fitting into the busy schedules of consumers.
It won’t be easy for the manufacturers to become online retailers. However, it’s clear that the digital landscape is changing automotive retail. Examples in the sector can be seen through YouTube videos of reviews and test drives. These videos lead to the consumer’s pre-conceived notions and opinions from experts already when stepping inside the dealership. They don’t need the salesman trying to befriend them for a sale, they already know what they want to cover.
Peugeot has experienced months of successful sales thus far and will continue to learn and adapt. It’s a good preview as to where we are headed in the digital space of things.
Automotive online retail is going to take a tremendous turn within the coming 5 years. Purchasing a vehicle is the second biggest purchase a consumer can make. But it seems like in the future purchasing a car online will seem like no big deal. What a time and industry to be a part of!