This post is attributed to my colleague Tim Rose at AM Magazine in the UK http://www.am-online.com. It poses some very interesting views on the future direction of retail outlets as a result of some major research carried out in the UK regarding solus vs multi-franchise outlets....
"Research from a global automotive consultancy is likely to add weight to some carmakers’ demands for solus dealerships when dealers’ current contracts end in 2013.
US-based Urban Science, which has offices in all the major European and Asian markets, has announced findings from a retail study of 770 UK dealerships which indicates sales performance could improve by operating showrooms dedicated to single franchises and by using innovative sales and marketing ideas.
However, it also encourages manufacturers to reconsider their demands for larger showrooms.
“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 UK 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.”
Study results included:
“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.”