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The Future of Car Retailing

The Future of Car Retailing

Imagine this: you are driving your new Audi R8 along the Californian coastline at sunset, through the panoramic roof you admire the passing clouds – you lean deeper back into the red leather contoured sport seat, the black dashboard matching the shiny black coated hood reflecting the last rays of sunlight. You feel a prickle of excitement as you steer effortlessly through bends along the coast. It feels good. You smoothly stop the car, and subsequently exit. All of a sudden you snap back – you are in Canary Wharf in London, the financial capital of Europe. It’s lunchtime, in minutes you need to be back at your desk for a conference call with Wall Street to start off the afternoon. You take one last look at the dream machine you were test driving on a simulator in your local dealership; all while the customer relationship manager smiles and tells you, “Rupert, I’ll send you the QR code, so you can review the specs of your model at leisure. I know you are still undecided about the interior colour and trim. Just play around with the configurator. By the way, I have booked a real test drive for you on Saturday which will be held at your home. My sales guy will drop off the car.” Rupert is pleased by the options offered, and crosses his fingers that his bonus comes in—and that the spin around the Cotswolds over the weekend will do the trick with Martina, his wife.

Although today Rupert would not be able to drive his digital dream machine through virtual landscapes, digitised flagship stores are already a reality. Forget your brick and mortar suburban dealerships, displaying 􂀀 cars in the forecourt, so often seen in US, of flagship stores next to streets that also contain stores like Gucci and Tiffany. These new stores will transform the way we experience and buy cars. Dealerships are changing in format, size, and concept. There is an increased emphasis on developing flagship or completely digital retail stores in the heart of city centres, where the brand meets the customer in his own living and working environment—the city.

The car industry is finally waking up to the realisation that what happened to brick and mortar stores in the publishing and electronics industries is now at their door steps. In 2009, only 􂀀% of all retail sales (across all product lines, except fuel stations) globally were online. A trend which accelerated to about 􂀀% of all sales in 2011 and is expected to be around 􂀀– % when the data for 2013 is finalised. In certain industries, like publishing and entertainment, the leading retailers already collect more than 􂀀% of their revenue online, which has forcibly shutdown major brick and mortar stores (like Borders in the US) that have failed to follow the trend.

1. The Future of Car Retailing
Analysis of the Car Industry
Market Insight

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