CHERTSEY, United Kingdom, June 7, 2011 /PRNewswire/ --
- Right time for dealerships to rethink retail strategy
Global automotive retail consulting firm, Urban Science, today announced new findings from a retail study of automotive dealerships in the United Kingdom. The research indicates that manufacturers and dealers should consider rethinking their future retail strategies to better serve their customers and improve sales performance.
According to Urban Science findings, European dealerships could improve sales performance by operating stores dedicated to single franchises and utilizing innovate sales and marketing ideas such as a mobile sales team.
"In today's automotive retail market, dealerships could benefit greatly by challenging some of the accepted norms in auto and adopting some practices commonly found within retail," said Paul Dillamore, managing director of Urban Science's U.K. office. "Current thinking is that larger showrooms will increase sales, however, we found that dealers focused on a single brand and making the right level of investment in marketing, their sales force and fleets of demonstrator vehicles were the most sales effective."
Some top-line results of the study included:
- There is a strong link between sales effectiveness and a broad demonstrator fleet. Manufacturers should consider utilising smaller locations in more creative ways, for example, shop-like environments that leverage the Internet and deliver demonstrators to consumer's homes. - Single franchise dealerships have a 30 per cent better sales effectiveness rate than multi-franchise dealerships, demonstrating a strong link to a dealerships' brand focus. Manufacturers may want to reconsider the current trend of multi-franchise arrangements. - Marketing investment has a direct impact on sales performance, indicating that dealerships and OEMs should invest in more targeted marketing efforts. - Dealers benefit from having the right number of sales staff. On average, dealers have one salesperson for every 70 retail vehicles of potential, however, the most sales effective dealers have one for every 55 units of potential. Getting the level right could result in a Dealership selling up to 50 additional vehicles a year. - Contrary to popular assumption, there is no correlation between a dealer's sales effectiveness and the length of their establishment. The implication is that new dealers can ramp up their effectiveness quickly, so manufacturers should not be afraid of making changes to their sales networks. - Finally, whilst profitability is impacted by service performance, sales effectiveness is not, suggesting a greater separation of sales and service establishments is likely in the future.
"Automotive retail should be viewed as a constantly evolving model," Dillamore added. "Data and science are critical tools to create an understanding of how manufacturers and dealers need to adjust their retail strategies to meet changing consumer behaviours and increase sales. Bottom line is that OEMs need to be more experimental in their franchising options as they consider ways to increase sales effectiveness."
The study included a sample of 770 dealers across six different brands, all within the U.K. Urban Science unveiled the study its 2nd Annual Automotive Retail Network Management Workshop, titled, "Dealerships of the Future." The event included presentations by Urban Science; Karl McKeever, brand director of Visual Thinking; and, Peter Cooke of KPMG and professor of automotive management at Buckingham University. The annual event is offered exclusively to Urban Science's U.K. customers
The Urban Science U.K. office is located in Chertsey, Surrey. The office was opened in 1987 and currently employs 46 people.
About Urban Science
Founded in 1977, Urban Science is a global automotive retail consulting firm that combines science with marketing to give companies the competitive edge they need to increase their market share and profitability in the most effective and efficient manner. With headquarters in Detroit, Urban Science serves its global clientele from offices in the United States, Spain, United Kingdom, Germany, Italy, France, Australia, China, Mexico, Japan, India and Russia. http://www.urbanscience.com
SOURCE Urban Science