How futuristic is the 'Future Retail' concept?
We used to just have a few car models in showrooms under a simple business model: any model by our competitors, we match them. Now, differentiation via product substance alone is increasingly difficult.
Nowadays, customers not only expect a strong brand, a good product, but also to be treated like a king at the retail end. Expectations are growing really fast in the most attractive automotive market, which is China.
As part of BMW's global Future Retail initiative, launched in 2011, we have more than 300 'product geniuses' in our Shanghai brand experience centre that opened in April 2013. [A similar format for Mini opened in September 2013.] These 'geniuses' are not salespeople, but specialists with in-depth product knowledge.
Product geniuses? So this is following the footsteps of Apple's 'genius bar', and also Lexus?
Apart from a more appealing showroom appearance with virtual product presentations, the Future Retail concept includes, among others, an online presence and social-media activities.
Automobile retailing has not fundamentally changed in 50 years: from headquarters distributing to dealerships, from the dealerships that sell to customers. Being challenged from marketing benchmarks from outside the auto industry such as Nespresso, we think the industry should be in a multichannel retail landscape: brand centres interconnected with car drop-off points, pop-up stores and other retail formats.
BMW's objectives are to increase the number of possible contact points with customers and prospects, and to enhance the retail experience at all points. Prospects will be able to configure BMW cars on an iPad with a 'genius', and then watch demonstrations through 3D glasses, for example.
Isn't a real test-drive of an actual car a better brand experience than a high-tech showcase of a virtual one?
With more and more brands saturating the market, the competition is getting increasingly fierce, especially between premium brands. At the same time, we are dealing with target audiences we are not as familiar with. The new customer base in China is around 37 years of age—20 years ahead of some other markets. These younger customers expect more personalised experiences and additional customised services during purchasing.
Today, 10 new models will be launched this year alone in China, adding to an already extensive product range. Even the biggest dealership in China cannot fit all our needs. Furthermore, traffic congestion times in China have increased by 23 minutes on average over the past 30 years. It's getting more difficult to showcase the power of our engines in these road conditions.
We need to adapt to market changes and stay as the industry leader. This is our holistic approach to bundle marketing and dealer activities to meet customer expectations, and to remain future-proof.