Hyundai has just become the latest in a line of car manufacturers to start selling cars in shopping malls thanks to its Rockar collaboration, but is this trend just a fad or is ‘digital retail’ set to kill traditional dealerships? Cat Dow investigates.
Take a stroll through the Bluewater shopping centre and you’ll see all the usual retail suspects; opticians, clothes shops, electronics outlets. But nestled amongst the contact lenses, shoes and toasters is a rare but increasingly common sight; a company selling — and indeed buying — cars.
Hyundai has partnered with new retail company Rockar to open Rockar Hyundai — a next-generation dealership located in the busiest sector of Bluewater, Kent. This endeavour, Rockar Hyundai promises, will “flip the traditional way of buying cars on its head.”
With BMW Mini in Westfield Stratford and electric vehicle pioneer Tesla Motors in Westfield White City, the presence of car manufacturers in shopping malls is nothing new. However, Rockar Hyundai is offering more than just the ability to browse and purchase cars.
Rockar also offers part exchange valuations, test drives, servicing for existing and new customers, and a purchase process that doesn’t involve a member of staff (if the customer doesn’t want it to).
What’s more, if you don’t fancy going to the mall, you can complete the car shopping process from A to Z from the comfort of your browser at home.
A change in buying habits
It’s clear consumers are increasingly embracing the Web as a means of purchasing goods and services. In 2013 the UK spent £9 billion online, which accounted for 21 per cent of overall spend. However shopping for cars online is still relatively rare, so for Rockar there was a definite gap in the market.
Simon Dixon, founder of Rockar, says: “We buy food differently, holidays differently with the use of the internet. [I thought] someone’s got to be doing this already…but we couldn’t find anyone doing it – including product components and selling your car. Some people claimed you could do it, but then you had to pick up the telephone and speak to someone or email and get something. There was nothing that did everything.”
This comprehensive Rockar car buying approach is the ‘it’ Dixon imagined. Customers can log into the website from home, or visit the store to research Hyundai options within their budget and make their purchase, with the cars delivered to a place of their choosing. The user-friendly in-store touchscreen system also offers customers a part-exchange valuation.
‘Product Angels’ are on hand in store to answer any questions or assist the customer with the technology; and existing customers can use the drop-off point in the car park to have their Hyundai serviced while they shop.
The shift away from dealerships to online
Of course, traditional dealerships also have digital presence. Brands have worked hard to give car buyers digital tools to ‘build your car’ and ‘save your options’. But these are usually sneaky ways of getting customer contact details and, by their own admission, dealerships struggle to integrate these digital features into their legacy systems.
Software companies offer dealerships solutions to upgrade and streamline their patchwork systems, but these can prove expensive — particularly if fewer people are visiting your dealership. Nowaways, car buyers visit fewer than two dealerships on average, after researching at home online.
Spacious dealerships can feel vast and empty, even on busy days, so it’s no surprise Hyundai is excited about taking advantage of the footfall from 27 million Bluewater customers, over 90 per cent of whom drive to the shopping centre.
Of the new approach, Tony Whitehorn, Managing Director of Hyundai UK, says: “We offer customers options like petrol, diesel, hydrogen, electric, hybrid, plug-in hybrids, but the only way you can buy these different options is from a dealer. That can’t be right. We need to be able to offer a breadth of cars to the customer and different ways in purchasing those vehicles online, in a store in a mall, or in a dealership.”
Whitehorn likens this approach to that taken by Apple, saying: “An Apple store is quite iconic because it is how retail is moving on. Here there is nowhere to sit down. It is not like a dealership with a coffee area. If you go into Clinton’s or Bodyshop, they don’t have an nice place to sit down. This is a retail environment.”
Historically, buying a car is the second biggest purchase a family makes. People don’t usually buy a new vehicle on a whim while they’re out looking for a new belt. It used to be a process that required lots of print-based research, a consultation area, a comfortable seat, numerous cups of coffee and trips to see your bank manager. These days, most of your research can be done online and convenient monthly payments can be arranged in minutes, just like shopping for a mobile phone.
Unusually, prospective customers can take a car for two-hour-long test drives without a dealer accompanying them, as all the cars are fitted with tracking devices. The location of all of the cars out on test are displayed in-store, which creates an engaging visual for passing shoppers.
Dixon has been very deliberate in recruiting non-car sales related staff. The predominantly female team of product angels were recruited without them knowing they’d be representing a car brand. Images of a slick, commission-motivated wheeler dealer, á la Terry Tibbs, may spring to mind when considering a traditional dealership, but Dixon says Rockar took another approach: “We didn’t want that, but [people] who were intelligent, who had good personalities and who could take on product information and impart that back to our customers.”
As for pricing; it’s all set in stone. The Rockar price is already discounted with national average data used as a starting point. Dixon comments: “Car dealers tend to price things as low as possible, contracts with the lowest milage that doesn’t suit a customers’ lifestyle and then all the customer does is have an experience of everything going up. Here we ask what you can afford.”
End of the dealerships?
So does a shopping mall-based car retailer with a transparent pricing model, an online purchasing system and new breed of staff mark the beginning of the end for traditional dealerships? Possibly not in the short term, but the Rockar Hyundai experiment is almost certain to stick around.
Rockar itself plans to represent up to six brands and has ambitions to be in all eight major shopping malls in the UK. Some might say the Rockar vision is a tad too ambitious, but Dixon remains philosophical: “[We’re] setting out to change the way things are done and if we don’t come across hurdles were probably not trying to push the boundaries hard enough.”