22 May 2014

By Fredric Paul


Even as the cars we drive have gotten dramatically faster, safer, smarter, more efficient, more reliable and more connected, the places we buy them haven’t changed much since the days of pushy, clueless salesmen in loud suits. If the auto industry wants to make dealers relevant for the 21st century, everything about them has to evolve, from the training they give salespeople to how they entice and educate customers.

Automakers and their dealer networks — deeply aware of the disconnect — are desperately trying to leverage technology to reimagine the car-buying process, all in an effort to appeal to a generation of automobile shoppers raised on the web and mobile connectivity.


Car dealers’ traditional role as the place to “kick the tires” is being supplanted by online research as cars become vastly more sophisticated and reliable. “Dealers are in trouble,” said Mark Platshon, a senior advisor to BMW in Silicon Valley and a partner in Birchmere Ventures. “They’re getting disintermediated and they haven’t figured it out yet.” As The Wall Street Journal quoted one dealer executive last year, “The whole process of buying a car has flipped flop from what it used to be. Today, customers find the car first, then the dealership.”

Ben Lamm, CEO of Chaotic Moon Studios, believes there’s still a role for next-generation dealers by building a relationship with potential customers as concierges, offering test drives, providing information and answering questions. “A car is a big purchase so if something goes wrong, customers need someone to call, ” said Lamm. But those next-generation dealers won’t look anything like today’s sprawling suburban mega dealers. Instead, look for small, high-tech showrooms nestled in upscale retailing districts.

It’s already happening in Europe, where upscale carmakers are opening flagship stores in downtown areas of key cities. In the U.S., electric car upstart Tesla — which doesn’t have traditional dealerships — is leading the charge, largely because franchise laws forbid carmakers from undercutting their dealers by selling direct to consumers. Still, Ford tried pop-up storefront showrooms in tech-heavy San Francisco in 2012 and Frost & Sullivan predicts carmakers will open 100 urban showrooms around the world by 2020.


So what’s in the showroom of the future? London’s Audi City — launched in 2012 for the Summer Olympics — offers a clue. Multi-touch displays configure and visualize cars in photorealistic 3D, and buyers can use Microsoft Kinect technology to manipulate life-size depictions of their choices on floor-to-ceiling “powerwalls.” That’s a long way from the dog-eared brochures in your typical dealership.

Technologies such as iBeacon, Bluetooth Smart and geofencing will also help shoppers get information tied to the vehicle they happen to be looking at. And those technologies don’t have to be confined to the physical dealership. They could also find homes in cars or kiosks placed in malls and other retail environments.

Soon the car itself could even become a virtual salesperson. Last year, for example, Chaotic Moon helped Toyota create the Driver Awareness Research Vehicle. One of its many impressive features was its ability to display an interactive dealer’s invoice directly on its window, letting prospective buyers use gestures to swipe through various screens and learn more about what the car has to offer.



Mindful of customer expectations, BMW’s Future Retail program is looking to meld technology with a personal touch, leveraging “Product Geniuses” to introduce customers to BMW products. According to a BMW spokesperson, Geniuses aren’t salespeople. Instead, they’re employed to enhance customer understanding of — and interaction with — BMW’s vehicles. To do so, Product Geniuses use tablets to help customers configure vehicles carside, displaying the results on a huge flat screen that’s nearby.

If that’s not good enough, projection-mapping technology will eventually let buyers see their choices right on the car itself. The next step after that? Lamm suggested that high-end car dealers could become simulation centers, where potential buyers could experience vehicles in extreme conditions that would be hard to test in the real world. By projecting images onto vehicle windows, Range Rover could demonstrate how the Land Rover performs in the snow while Ferrari could show what’s capable on a race track.


No matter what technology they use, dealers still have to add value to the car-buying process. Elizabeth Kerton, Managing Director of the AutoTech Council, put it this way: “How do we provide value to a customer who doesn’t think she needs us?”

One approach is to play a bigger role in helping buyers get comfortable with their fancy new rides after purchase. “Buyers are overwhelmed with all the technology in new cars,” said Chaotic Moon Creative Director Greg Carley. “When I bought my new Jeep Cherokee, I went home and sat in the driveway for an hour trying to figure everything out. That’s a huge missed opportunity for the dealer.” Kerton said smart dealers will follow the Apple or BMW model and provide training sessions to help buyers configure their infotainment system to work with their phone, as well as download and install apps. “All that infotainment stuff is bloody complicated,” she added. “Car dealers need to be more ‘Genius’ and less salesman.”


Car dealers have one ace up their sleeve: the Pre-Delivery Inspection (PDI). That’s when the dealer checks out the car and makes sure everything is working properly before the buyer takes possession, and it’s one last chance for dealers to stay relevant.

Dealers hope to work with carmakers to add new dealer-installed options and personalization touches at the PDI stage, Kerton said. Dealers would even like to see some essential features of the vehicle — custom steering wheels or seats, for example — added during the PDI instead of at the factory, helping to cement their role in the sales process.

One thing is clear: The dealer of the future will have to look and operate very differently than it does now. Car dealers are not immune to the rising tide of e-commerce that has wiped out established retailers from Borders to Circuit City, many of whom enjoyed far more positive reputations. From cutting-edge technology to reimagined sales processes, dealers and automakers who want to attract the next generation of car buyers will have to embrace brand new ways of doing business. If they succeed, one day people might actually enjoy visiting their local car dealer.