Cadillac is looking to make a strong push in the European market through way of a new three-pillar business strategy. The strategy involves opening test-drive centers, stand-alone service facilities and pop-up storefronts across Europe, which if successful, will make its way overseas to Cadillac’s home market in North America.
According to Automotive News, Cadillac is hoping the test-drive centers and pop-up storefronts will help introduce prospective customers to new Cadillac products without forcing them to visit a dealership, which Cadillac global chief marketing officer, Uwe Ellinghaus, says is “not really what they want to do given how limited their leisure time is.” He said the business model could be easily adapted to work in the United States and Canada as well.
“I think the future of retail in the automotive industry is without bricks and mortar, at least compared to what we do now, which is invest multimillions in dealerships,” Ellinghaus told Auto News in an interview at the Geneva Motor Show. He said this would allow Cadillac to “control not only the transaction prices better, but also the quality of the experience, of the dealer touch points.”
Other automakers are utilizing different tools for car shopping as the way people shop and look for cars changes. Porsche, for example, has plans to open two ‘customer experience centers’ in Los Angeles and Atlanta, where owners can learn about the vehicles in a pressure-free environment and drive the vehicles around a test track. BMW also has a new retail strategy which involves bringing regional pools of test cars to certain areas, giving dealers access to more demo cars than before.
Automakers are quick to point out the new strategies are meant to support the dealer networks, and not replace or overshadow them. Dealer networks are still the staple of their business strategies and they are not looking to replicate Tesla’s controversial retail store business model.
Cadillac’s new plans for Europe are representative of an emerging new trend in the way cars are sold. Consulting firm McKinsey and Co. says several new retail formats will crop up in coming years that will “cover specific parts of the customer-decision journey that had previously been the task of the traditional dealerships.” These new formats include test-drive centers, online showrooms, pop-up locations, city stores and “super stores,” which Auto News says are large facilities with lineups of vehicles that buyers could purchase “on the spot without any delivery time.”
“Dealerships as retail formats will not vanish,” McKinsley and Co says. “(dealers) Will have to decide which part of the customer decision and experience journey they want to focus on: brand awareness building and messaging, product experience, sales transaction, parts and service.”
Ellinghaus said Cadillac’s lowly sales figures in Western Europe last year make it the prime market for experimenting with new business models. He hopes any successful aspects of the new strategy will be adapted to other markets, including the United States.
“Global premium brands have cosmopolitan customers that want the same products, the same communication campaigns and the same dealership treatments the world over,” he said.