Cadillac’s dealer footprint is both a blessing and a curse. On one hand, Cadillac stores cover much more ground than any of its German and Japanese competitors, and reach into some of the more rural parts of the United States. However, this comes at a major cost.
Most rural Cadillac dealers are part of combined Chevrolet or Buick-GMC dealers. Those dealers sell very little Cadillacs, sometimes only around 30 vehicle per year, and it can hurt brand image selling Cadillacs behind a decidedly more blue-collar Chevy dealer.
Johan de Nysschen has proposed a solution for dealers, pitching the idea of virtual stores to some of its lowest-volume dealers, according to Automotive News. de Nysschen states it would alleviate the problem of having dealers keep a dozen or so Cadillacs on hand in case a buyer does happen to trickle in.
“We want to work with those small dealers to give Cadillac a competitive advantage in terms of reach into their local communities,” de Nysschen said in an interview last week, “but do so in a way that’s more closely aligned with what we think the Cadillac luxury brand experience should be.”
de Nysschen delivered the pitch to 400 of its lowest-volume dealers, painting a picture of a concierge-like Cadillac service. Salespeople would be armed with touch-screen configurators and virtual reality devices supplied by Cadillac, and visit prospective buyers at the workplace and home. Cadillacs would be sourced from regional inventory centers, rather than sit on dealer lots.
It would also allow bundled Cadillac dealers to opt out of the pricey remodel for Cadillac dealers that will be implemented. de Nysschen added it’s a way to “immerse customers in a virtual brand experience, so that our dealers need not concern themselves with investing in showrooms and brand-element requirements, which clearly are cumbersome if you’re such a small dealer.”
Dealer reaction has been mixed to the proposal, with one Chevrolet-Cadillac dealer owner unsure if he’ll opt in for either program, and worried about not having product on hand for a customer.
“In this day and age, with customers’ propensity to want immediate gratification,” Jim Stutzman said, “I don’t know how you can compete if you don’t have product available.”
Comments
When you say ‘rural’, does that include (or mean) ‘less-than-urban’? I know Cadillac has talked about making this adjustment off and on –
Also wondering if any big stores have bitten the bullet, and now have what they’d consider a showcase dealership? I haven’t seen one – just curious if there are any that I’d confuse for a Porsche/Lexus/Audi store once I walk through the door …
And, sorry, I also wonder if they’ve reset the remuneration system for Cadillac – rewarding ATP instead of volume, or a combination – I seem to remember that being discussed, as well.
Many dealerships opted out of adding a single ELR to their inventory for demo purposes, instead providing potential customers with the option of ordering a 2016 model directly from the factory.
The sales results regarding the success of that strategy speak for themselves. . .
I do think the virtual showroom concept will enable poorly-performing dealers to be weeded out voluntarily, providing the dealership enema Cadillac has needed for a long time.
CCC
If you’re only selling 30 cars per year, you’re a burden to the OEM. When Cadillac volume increases these poor performers will be eliminated.
Those poor performers may not be eliminated if they do not put more focus on selling Cadillac making the investment at their dealerships.
Cadillac has to try something to help these smaller volume dealerships that are hurting their image overall but I am not sure that this will work.
Buying a car, especially a luxury car, is an emotional decision in the vast majority of cases and as such there is a need to see, feel and touch the product and get the emotional connection to it. In a virtual store that connection will be gone.
Also I do not think the virtual concept is a little to out there to connect with potential buyers.
If my father could have test driven a Chevy SS within 100 miles… he would have bought one. He bought a more-expensive 335i instead, because he didn’t think a Chevy could be that good in comparison.
Relevant story. Food for thought.
Chris I hear you,
I only drive GM’s, but the dealerships (service & sales) are very poor. most of them are very ( cross out very), I mean extremely uninformed about their own products. Chevy, Buick-GMC, & Cadillac dealerships are all guilty of this. At least that’s how it is in Northeast Ohio. They are their own worst enemy at times!
I am not even talking rural…I am speaking of the Cleveland & Akron, OH dealerships.
This isn’t really a ” new ” concept . Atleast not in my area . I actually purchased my new truck that way . My dealership didn’t have what I wanted so I went in and talked to a salesman I have bought vehicles from in the past told him what I was looking for . He checked other dealerships stock and GM’s stock until he found what i wanted .
With the help of the internet consumers can do alot of research on what they want before even stepping on the dealerships lot . They can check everything from the overall safety ratings to options they want . Dealerships can’t afford to keep every style or model from the manufacturers .
And for the domestics it’s hard to find a dealership that offers only one brand anymore . Thats how GM got rid of alot of their dealerships by having those that survived selling more than one brand .
This is the new way to sell cars and it helps the small dealerships save money by not having alot of product sitting on the lot .
The concept is valid, no doubt, but it works better with an established product and repeat clientele who know what they want but will not work as well for a brand that is trying to re-establish themselves and attract new clients.
If you don’t have product on hand how you gonna SELL anything? People like to look see feel touch etc. they want hands on the vehicle they are looking at. No product no sale
I agree that there are way too many Cadillac dealers (more than 800), but doubt this “virtual dealer” would work well at all? Would’nt “virtual dealers” still have to have a “demo” of each model? What about service loaners? The whole thing sounds like something from Bentley, Aston Martin, Roll Royce, etc….? Most of those cars are made to order and the buyers are ready willing and able to wait for their “bespoke” ride to be built. Cadillac is in a different game, many luxury car lessees want to turn their expiring their lease vehicle in and drive out with another lease a few hours later.
In my opinion, the better idea is: get out the checkbook, buy out/pay off the lowest performing 200-250 dealers and move on.