Car dealerships - beginning of the end?

The world is changing. E commerce sales continue to sky-rocket and your nailed on high-street brands are starting to feel the pinch, some even falling by the wayside.

So how are business in this day and age surviving? Simply, they adapt. Adaptation to the ever changing climate is key and research into consumer shopping trends goes a long way to give a pretty extensive insight into how the average person shops these days. But how does this convert to buying a car? we are talking about high street shopping.....right?

Research into dealership footfall shows a decline in customer visits. someone buying a new car used to visit a dealership around 5-6 times before purchasing, as now this number has gone down to less than 2 visits. In Quarter 1 this year, dealerships reported about a 60% decline in footfall compared to the same time last year.....That's a big difference.

Its pretty simple to see the reasoning behind this with the biggest factor being the internet. With the emergence of vehicle brokers allowing consumers to shop on-line for their desired car at really competitive rates, the convenience outweighs the risk of dealing with someone who you never actually visit. The car arrives on your doorstep on a pre arranged date, no need to visit the dealer. Huge companies like Carwow who advertise on behalf of the dealer where the initial research is done on-line, with everything completed via E-mail with really the only visit being to collect the car, again convenient with the benefit of a dealer handover and the dealer experience and expertise. Again, convenient with added dealer benefits.

So a common pattern here is convenience. Ease to the consumer, with the internet being the catalyst. Now, we are all time poor, so the more convenient things are, the easier they fit our daily routines, the more we gravitate towards them. Now think of your local dealer, where are they? are they walkable from the nearest train station? are they easy to get to?

Unfortunately, a lot of dealerships aren't in the immediate vicinity of our most convenient haunts. If a dealer was next between a Costa coffee and a Nando's at your local shopping centre do you think they might attract more footfall, or more exposure?.....and this brings me to Rockar.

Recently myself and my colleague Graham went to visit the Hyundai and Jaguar dealers in Westfield, Stratford to see the concept first hand which is brilliant. From my relatively short 7 years involved in the car industry, people, although now do use brokers and on-line avenues a lot more, still like to see and meet people, have something tangible to relate to and be taken on a journey, have an experience and rightly so if your buying/leasing a new car.

Although we were picky and highlighted areas that could be improved, it could be more customer friendly for instance, the convenience and ease was a thing of beauty, I could of built my car and ordered and paid for it then and there. Its very similar to an apple store, a lot more of an approachable atmosphere than a dealership in my view and the concept has the right balance. "You can do it on-line if you like, or next time your popping to Costa or treating yourself to some retail therapy, come in and see us".

I have spoken to a lot of people in the car industry who feel that dealerships are being left behind and the car industry as a whole needs to start adapting and embracing change or risk being left behind. There's also the expense to think about. Running a dealership is an expensive business, a hugely high cost compared to the let of a shop front.

Audi in Poole, a new dealership focusing on customer experience has seen this and now offers everything you would expect plus more. An on-site spa and Gym, and expansive showroom, separated handover bays for privacy, a local business hub, cafe and drive through service bays, give the customer a unique experience and with the way now Audi structure their pricing, a competitive offering as well, but again, the ease of internet shopping also needs to equally if not more so invested in to attract new customers and invite them to experience it all first hand.

So is it the beginning of the end......it very much depends. Adaptation is key in my opinion. What do you think, are dealerships in danger, or will we always need the security of being able to have that option?