High real-estate costs, expensive resources, and need for innovation to stay afloat have compelled many automotive dealerships to shrink store space by about 20 percent and resort to digitisation for interactivity with the customer. The advent of digitisation in car retailing has seen the introduction of innovative sales strategies with both cost reductions and additions in upfront investments.
European OEMs are pushing for standalone digital formats while North America seems to prefer digitisation within existing franchise models. Frost & Sullivan expects that by 2020, 60-70 percent of new car sales leads are likely to be generated by a digital platform, be it websites, mobile sites, social media or apps.
The advent of digitisation in car retailing has led to the development of new and additional performance indicators. Key Performance Indicators (KPIs) such as brand awareness, digital engagement of customers, customer age, lead response time, and vehicle configurability satisfaction will be of increasing importance in future digital retail formats.
Automotive major, Audi, is at the frontline of this change in retail network. Its digital showroom (Audi City), in an upscale shopping zone in London, presents the entire line-up of 40 models virtually. Car companies are also using fashion merchandising and combining lifestyle elements into retailing globally. Lexus Intersect Tokyo and Lâ Atelier Renault, Paris conduct special events and exhibitions for new product launches, offering a strong automotive brand experience through lifestyle-related concepts of art, fashion, music, design, food and technology.
By 2016, automakers are expected to open more than 100 digital showroom/lifestyle stores globally, specifically aimed at enhancing both the retail and brand experience with limited on-floor physical inventory. With European and North American OEMs expected to invest between $500 million and $five billion in updating store technology, training staff, and digitally integrating various aspects of the car retailing process, soft digitisation technologies such as digital tools, signage and kiosks are anticipated to grow strongly in the short term.
