Gone are the days of car showroom customer service lounges with cheap chairs, stale coffee and old magazines.
Modern dealerships now try to put waiting customers at ease by offering comfortable furniture, plasma TVs, espresso bars, drive-through coffee, interactive tablets and screens, wireless Internet access and even spa services.
It’s not just the public lounges that have become attractive. So have many dealership service work areas. Many dealers make it a point to keep those places clean and orderly both to provide a good work environment and present a positive impression to customers.
The aspect of transparency within businesses is nothing new, although becoming more and more relevant to the automotive industry where customers can now see into the service area while they wait.
There is a reason why car showrooms aim to impress customers more than ever:
According to Wards Auto where "The Ward’s Dealer Service 150 is a spinoff of the Ward’s Dealer 500, a listing of top dealerships in America. The 150 standout service performers took in US$3.3 billion in fixed-operations revenue,17.6% of their total revenues in 2010."
Wards Auto go on to say that "Resembling a 5-star hotel’s lobby, the opulent showroom section of Newport Lexus includes a cafe, grand piano and leather chairs in front of a fireplace. But in planning the US$75 million facility in Newport Beach, CA, the David Wilson Automotive Group also paid particular attention to a less public part of the dealership: the service department."
"It’s a vast area with 77 bays and 103 lifts. The bays are pre-stocked with parts for the 18 most-common work orders. That gets cars in and out fast. So does a 7-lane service drive designed for speedy intake. “If we can turn the serviced car around in 90 minutes and keep the customer comfortable here with all the things there are to do, that’s one less loaner to send out,” Craig Whetter, the group’s executive vice president, tells Ward’s in an earlier interview.
“It’s an environment you almost look forward to coming to, rather than feeling like, ‘Gosh, I’ve got to take my car in for service,’” he says. The store’s fixed-operations fixation is not just because dealer principal Dave Wilson started out doing oil changes and lube jobs at an Arizona dealership before going on to build his 16-dealership group based in California. The back shop is a strong profit center for Newport Lexus, No.116 on this year’s Ward’s Dealer Service 150, a listing of U.S. dealerships with outstanding service and body-shop operations as well as parts and accessory sales. The Newport store had fixed operation revenues of $17.6 million last year, 13% of the dealership’s total revenues. Newport Lexus isn’t the only dealership catering to service customers. Many dealers do the same thing, starting with well-appointed waiting rooms.
Many car showrooms these days are designed with large windows installed in a wall separating the service lounge / hand-over bay and the shop area. In the spirit of openness, the idea is to let customers look in on the “operating room.” Another way to do this is with Compact Sectional Doors or large glass folding doors where the door itself appears as a wall of clear glass which then can be lifted up into a small cavity in the ceiling, hidden from view but allowing enough space for vehicles to pass in and out. Gone are the unsightly balancing rails of the traditional Overhead Sectional Doors.
Glass folding doors can also be installed on the entrance to the building itself for vehicle access as well as allowing natural light into the building but all the while offering clean and modern functionality.
Why is the Car Service Department Important?
The service department always has been a dealership profit center. But when new-car sales fall, dealers crank up their back-shop operations to offset the showroom revenue declines.
For example, a large automotive dealership expanded business hours and added work shifts at its 95 stores. The CEO went on to say that; “You don’t have to build new service bays and buy more land; you add a second shift.”
Read about Wards Auto analysis where they highlight the top American dealership's service. http://wardsauto.com/news-analysis/top-dealership-service-departments-shine and download Wards Auto Service 2017 Service 150 PDF here.
Car Showroom design will consistently change over next few years; take Tesla for example: as Fast Company notes; "Tesla has chosen to eschew the traditional dealership method—in which automakers sell their cars to independent dealers, who are granted exclusive territories—in favor of company-owned showrooms staffed with product specialists, who can talk people through the technology and safety concerns. It’s an approach that Ganesh Srivats, Tesla’s vice president of North American sales, says is essential. “We knew we couldn’t rely on dealerships to promote our mission, to operate the business the way we wanted to, to provide this great customer experience,” he explains. “So we’ve really had to chart our own course.”
The dealership itself still exists although a 2015 survey by Accenture revealed that 75% of respondents would consider conducting the entire car-buying transaction online if they could. “When you go to a dealership, there’s all this sort of doubt about the process,” says Srivats, who was senior VP at British fashion house Burberry before joining Tesla last summer. “The haggling, all the nastiness around it. Did I pay the same amount as the next customer? Did I get tricked?”
Tesla fashioned its retail model in response. Its 40,000-square-foot, redbrick store in Brooklyn’s gentrifying Red Hook neighborhood features only two vehicles on the sales floor—a cherry red Model S and a white Model X with falcon-wing doors. Though Tesla’s cars are currently luxury products, the industrial space doesn’t exactly scream high-end. What it offers instead is a disarmingly transparent sales process.
Actually, EY’s Automotive & Transportation, based in the UK, put together a facinating study on the changing face of the Future of Automotive Retail which can be downloaded here. To start with, they state that "Automotive retail will shift from a
product-driven to a customer-centric approach to drive customer loyalty and to
adapt to changing customer behavior and expectations."
What can Automakers and Distributers do?
In a nutshell, identify and roll out new distribution formats: identify, design and roll out innovative retail formats that suit specific markets and customer profiles. Think about the customer experience as a whole - from when the customer enters the showroom - its doors, the layout, services on offer, - to the moment that they sign the paperwork.
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