The dealership is dead. Long live the dealership
It’s great fun to speculate on the future of this or that, and let’s face it, no-one ever got famous (or in the case of those usually engaged in the daily grind of business, tried to generate sales) saying thing’s would broadly stay the same.
So here’s a prediction about what the future holds for automotive retailing.
I predict that, in one hundred years time, there will still be car dealerships.
Phew. Glad we’ve got that out the way.
You see, the problem with looking at the future of car dealerships is a problem.
It’s not the places you sell them from or where we buy them that’s really likely to suffer some form of seismic upheaval. Of course there will be many different designs and shapes and sizes. But you can’t escape the fact that if you want to sell and buy cars, you need:
– some space to display something quite large, and several of them (like a showroom)
– some space to look after them once they’re sold (like a workshop)
– plenty of space to store stock, partly as inventory, partly as distribution, partly for all te other necessary preparatory work you need to undertake.
Now, of course, none of this needs to necessarily be in one place. It’s only a consequence of the franchise model this is perpetuated, as it’s a relatively cost-effective business operation to do so. Actually, in some cases, it’s the only cost-effective way.
If you decide to offer direct sales (as the manufacturer), you still need those spaces, but, again, you don’t need to follow the franchise model or methodology.
Both franchisees and manufacturers have begun experimenting with variations on formats, market representation points and means by which the ‘dealership’ become a ‘thin wall’ marketing-orientated application to a distribution model. Sorry, I meant a boutique. In a shopping mall.
The point is that if you make things, large things, that you want people to buy you have to display them someplace. It’s why department stores are still around – incidentally, one of the first might well be Bennett’s in Derby, England. It began life as an ironmonger’s in 1734, still stands to this day, trading in the same building, which rather underscores my prediction for car dealerships.
It’s also why we have large, edge of town retail parks selling furniture, office supplies, DIY materials, etc. Big box retailing works if you have big boxes to store, shift or sell. If you’ve only space to show one bed and mattress, how are you going to compete? The answer is, not very well.
Most successful online retailers are simply vast department stores, that happen to fit in your hand.
If you’re in the business or shipping inventory that doesn’t need to be seen – or is below a price threshold where you don’t feel you need to see it beforehand OR if it’s function is simply pretty functional so you know what to expect (hmm, that washing machine. I really need to see if it’s quieter than our current model before I buy it. You get the idea.) – this works perfectly well. But the internet hasn’t killed shops. It’s killed some shops but the decline of town centres are due to many and varied economic, political, social and technological factors.
Shopping, or retail therapy, is one of the largest economic activities in the Western World. In Europe, it accounts for “11.1% of the EU’s GDP and provide(s) around 33 million jobs (almost 15% of total employment in the EU)” according to the European Commission.
Getting back on the road, so to speak, the really interesting place to think about the future of car dealerships is to not think about car dealerships.
It’s to think about cars.
If, as I heard on the radio today, fully autonomous cars are a mainstream fact by the mid 2030’s, what might that scenario mean for buying and owning and selling cars?
The mental model we have about cars is one based on ‘driving’. Cars occupy a series of spaces that are concerned with where they’re driven to and from and as ways that activity is facilitated and enjoyed. Cars are parked or garaged. They are apart from the rest of our possessions in a quite singular way – they aren’t part of the ‘indoors’, they part of the outside. Which is perhaps partly why they look so odd when we try to ‘domesticate’ them by bringing cars inside showrooms. Showroom that increasingly – and rather bizarrely when you think about it – try to look like our homes.
Now, if, as many seem to be suggesting, the car of 2032 will be ‘driverless’ environment for much of the time, the focus will shift from the outside to the inside.
A car will become more like another room. Potentially the car would become a metaphorical ‘garage conversion’. A living space we’ve repurposed to be much more useful.
Then the idea of a car showroom would be defined by the interior of the car.
The dealership might increasingly be an ‘estate agent’ (note the hidden metaphor in the definition of a model category as ‘property’).
If you’re now marketing cars as motive ’property’ rather than motive power, stepping into the showroom takes on a whole new set of dimensions. Not to mention the interior decorating opportunities – the Office of National Statistics reported that in the UK, Household goods stores (for which read home improvement) generate average weekly sales of £0.6bn. Weekly. That’s a lot of accessorising.
A future car showroom (if we need to build those – why wouldn’t the car come to us?) may become a good deal more like a trip to an interior decoration store with a series of room sets.
Or perhaps the car is the car showroom? Now, there’s a more arresting idea. If the average dealership has three sales staff, your dealer network size just tripled. Result!
Hopefully you’ll have enjoyed this little speculative trip to the future. If you’d like to explore these ideas further – both the practical and the possible, do get in touch.
The feature image is from Jason Lopez’ Abandoned Dealerships image collection.