How about a manicure while you wait?
In a bid to encourage more footfall, dealers are looking at innovative ways of using their premises to diversify into new services.
As cars continue to get more complex and generally, more reliable, dealers are finding themselves caught between a rock and a hard place. Service intervals are increasing apace, in fact some models are up to 18,000 miles, meaning it could be over 18 months before the owner needs to contact the dealership to arrange a service. Even then, the customer needn’t actually make a visit as many dealerships offer a collection and return service.
Theoretically therefore, the handover of a new vehicle could be the last time that the dealership ever sees that customer, even if they decide to remain loyal to the brand. According to Auto Trader, footfall at dealerships has dived from 30 million visits in 2010 to a projected 15 million this year and 7 million in 2018. A research paper by the publisher gave an insight into how dealers are responding to changing market conditions, which found that top performers have a ‘pioneering’ approach, whilst the weakest continue to trade from a ‘traditional’ perspective. The study of 70 dealers also revealed that the most successful were committed to revolutionising their business, in order to remain both relevant and competitive. With such a large overhead as a car dealership, however, this is no mean feat, so how far can a motor retailer go to ‘revolutionise’ its offer to customers?
This particular issue has been tackled successfully by Jennings Group, which saw fast food as one way of boosting custom. The company launched a Subway sandwich franchise at its Kia dealership in Stockton Kia as a means of “pulling people in.”
Diversification is not a new concept for Jennings. The business first moved beyond car retailing back in 1989 when it built a garden centre to attract more customers to the area. Having sold it in the late ‘90s, the company has returned to the idea of doing things differently, in response to the advent of digitalisation and the need to provide more reasons for people to come to the showroom.
So, when Jennings was planning a new Kia dealership, it decided to include a Subway franchise in a unit next to its service department, which opened in early 2016 after a 5-month build project. Fortunately, Subway had allocated the area for an open point and since launch, Stockton Kia’s franchise generates more than double the predicted weekly revenue. According to the company’s managing director: “There are a lot of businesses in this area but there’s nowhere to get food. Every business and all of their customers will therefore come to us to get something to eat. We often have queues leading out onto the forecourt, so people browse our vehicles while they’re waiting.”
Spurred on by the success of its first non-automotive franchise, which has had a positive impact on car sales, Jennings is looking at adding another Subway franchise to the group, as well as a potential Greggs franchise.
the handover of a new vehicle could be the last time that the dealership ever sees that customer, even if they decide to remain loyal to the brand
A different but no less innovative direction was taken by Ocean Automotive which, in a bid to offer customers something over and above the normal dealership experience, added a salon and gym to its Poole Audi site, which opened last summer. Taking inspiration from the hospitality and airline sectors, the group felt that the brands it represented, such as Volvo and Audi, offered a good crossover with a high-quality salon experience.
Incorporated into the new build of the four-acre site, the salon and gym are used predominantly by while-you-wait servicing customers, although any Poole Audi customer is entitled to benefit. According to the company, the gym features shower and changing facilities, treadmill, rowing machine, bike, cross trainer and free weights.
Whilst the gym does not require dedicated staff, the salon, branded “Schön” (which means beautiful in German) tying in with Audi brand’s heritage, has two full-time staff, who are trained in a range of beauty treatments. Every service customer at Poole Audi is offered a free 15-minute treatment at the salon, which can then be upgraded to a longer appointment. The majority of those using the salon’s facilities are women, but the offer is open to everyone.
According to Ocean Automotive, the unique novelty of having a salon and gym within a dealership gets people talking about the business and customer feedback to date has been “brilliant.” Whilst not intended as significant additional revenue streams, the company says that the real impact is providing that additional service for customers which results in better brand perception, without detracting from its core business.
On the subject of brand perception, securing incremental business on every new car sold gives dealers those extra marginal gains that can boost profitability significantly over the course of a year. Autoglym’s LifeShine Vehicle Protection System has proven itself to add real value to dealers, supporting their pioneering ambitions by helping generate additional revenue at the point of sale through a compelling customer proposition from a highly regarded and recognised brand.
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