In the past two years, auto supermarkets have sprung up like mushrooms, as long as they are popular business districts, there will inevitably be several car brands settled. In this battle for the turf of the mall, there are many new forces players who come forward and follow, and there are also many traditional giants in the fist.
Different from traditional 4S stores, the glamorous environment of direct-operated stores and new car sales methods seem to make buying a car a fashionable and technological thing. As the direct sales model becomes more and more popular with consumers, the industry even once appeared "4S model has approached dusk" argument. But is direct marketing really universal? Has the 4S model really been subverted? Where will the car dealerships of the future go? Recently, Volvo's T8 direct sales model piloted in Shanghai has given us a new perspective of interpretation and more imagination.
Let consumers buy cars without "bitter water"
In 2021, consumers have changed. Today's consumers have grown up in the Internet age, they have more ways to understand products, more ways to shop, and more professional requirements for product explanations. However, the sales staff of traditional 4S stores are still "one process to hit the world". In the direct sales model has begun to order the mobile phone offline to pick up the car, the whole process in one go, we look back at the traditional 4S store model, consumers still need to compare goods for a cheaper price, for the bargaining problem.
This also makes consumers have a "resistance" to 4S stores, but in essence, they are not resistant to this operating model, but dissatisfied with the expected level of service. In the traditional 4S store sales model, sales consultants always focus on the bargaining process, in the final analysis, because their KPIs are linked to sales. When the difficult performance appraisal is pressed on the dealer, it is difficult for them to serve the consumer wholeheartedly.
How to solve the "contradiction" between dealers and brands? For example, Volvo's T8 direct sales model tries to return transparent and open prices to consumers through a one-price model, and at the same time to change the assessment standards of dealers. In the one-price model, dealers have no bargaining space and will naturally focus on front-end reception. In this way, the entire car buying experience will be more enjoyable for consumers. At the same time, in the field of after-sales service, the traditional 4S store also makes many people worry about being "wool", and now in the T8 direct sales model, car maintenance and other services can also be unified online orders, operated by 4S store staff, the process is more standardized.
At the same time, with the change of consumption habits, more and more consumers are no longer willing to run a 4S store just to see a car. Volvo under the T8 direct sales model has expanded its dealer-led city center store in the bustling area of the CBD. In the past, traditional car dealerships were often opened in sparsely populated remote locations, while new power brands were keen to open direct stores in popular business districts, and Volvo's city center stores can help brands cut into the purchase process and enhance their competitiveness when consumers have not yet had a strong intention to shop. For consumers, while visiting the mall, they can see the car and test drive, and the convenience is greatly improved.
For example, the newly opened Volvo Brand Experience Center Phase II is located in the core business circle of iapm International Trade on Huaihai Road in Shanghai, which integrates consumption and experience. After the renovation, the store not only expanded to a large space of 500 square meters, but also added a product in-depth experience hall. Here you can not only enjoy exquisite afternoon tea, but also through the cool five-piece linkage screen, with a naked-eye 3D effect 360 degrees without dead angles to see the car; In the hall-level audio-visual experience area, you can feel the product highlights and brand culture in an all-round way. At the same time, you can also experience Volvo's latest model, the C40 RECHARGE. The Volvo brand experience center store, which integrates brand experience, vehicle display, FIKA leisure and test drive sales functions, undoubtedly makes Volvo closer to users and makes it more convenient for users to see cars. According to Volvo's plan, by the end of January 2022, a total of 5 city center stores will be laid out in Shanghai; it is expected that by the end of 2022, Volvo Cars will open 30 city center stores in Guangzhou, Shenzhen, and Hangzhou, in-depth layout of urban consumption scenarios.
Let dealers transform without "pressure"
In the direct operation model of the new power brand, dealers are not involved. So are dealers really "unimportant" in direct sales? Of course not, the reason why the T8 direct sales model can ensure that consumers get a better level of service is precisely because it optimizes the dealer model.
In the traditional 4S store model, the profit of the dealer does not come from the user, but from the rebate and excess reward issued by the manufacturer. Therefore, dealers often spend their minds on how to obtain the trick of the manufacturer's scoring system, and ignore the user's experience. But now that the car market has changed from a seller's market to a buyer's market, dealers cannot continue to "lie flat" in the matter of "serving consumers well" in any way. As the saying goes, "cure the disease to cure the root cause", T8 direct sales model, not only cancel the dealer inventory, but also pay the dealer a fixed service commission, the dealer does not have to back the library, nor does he need to take the rebate of the impulse set, and the dealers who are no longer tired of coping with the sales performance can also change from "selling cars" to "service", focusing on product introduction, test driving experience and so on, providing consumers with more valuable services.
Of course, another big benefit of not having inventory is that dealers are liberated from long-term financial pressures. The traditional 4S store model has high requirements for the dealer's capital chain, and rent, labor, daily expenses, etc. all require the dealer to take care of itself, and the inventory occupies a huge amount of money. Dealers each purchase of goods as little as thousands or hundreds of thousands, high is millions, if it is the golden age of the car market is fine, but when the car market falls into a downturn, inventory pressure is enough to make dealers suffocate. The T8 direct sales model alleviates the financial pressure of dealers, allowing dealers to revitalize the capital chain, and also giving dealers a gap in their ability to change their roles and upgrade their capabilities. Volvo's move has undoubtedly created an opportunity for dealers to transform, and to transform step by step under the premise of protecting the interests of dealers.
In fact, dealers are also an indispensable part of Volvo. Any brand with large sales scale cannot rely on direct sales to directly face consumers, and the venue resources and personnel resources in the hands of dealers are an important medium for Volvo to reach users with its service policies. For example, Volvo's twelve service commitments that have been wholeheartedly upgraded this year can cover so many cities across the country, relying on these hardware conditions.
Similarly, taking advantage of the network and personnel advantages of nearly 300 dealers, Volvo can directly use 4S stores as offline showrooms, delivery centers and after-sales centers for the direct sales model. Therefore, the Volvo T8 direct sales model is not to form a new direct management team to replace the original dealers, but to retain the existing sales channels. At the same time, Volvo also opens some city center stores with dealers, dealers still dominate the sales process, and Volvo directly manages the T8 series. For the brand side, the parallel between 4S stores and direct sales can not only use the advantages of the network of 280 dealers and personnel to stabilize the base of luxury brand services, but also avoid the high costs caused by the expansion of a large number of urban exhibition halls.
Let the brand comprehensive transformation without "dead ends"
Volvo's in-depth exploration of the direct sales model is also to better transform into the era of electrification. According to the plan, Volvo will transform into a pure electric luxury car company in 2030. From the perspective of global sales, volvo cars' pure electric models account for more than 25% of sales, and many models even have a shortage of supply, such as the urban luxury pure electric SUV Volvo XC40 pure electric version. It can be seen that volvo has achieved remarkable results in the transformation of electrification strategy.
Today, Volvo has realized the electrification of all its products, and the T8 model is undoubtedly the most in line with the shopping habits of consumers in the era of electric vehicles. Volvo's in-depth exploration of the direct sales model with the T8 as a pilot is essentially to move closer to users and the market, but also to respond to changes in technology and products. Most manufacturers test the waters of direct sales for the sake of direct sales, but direct sales here at Volvo also shoulder the heavy responsibility of promoting the reform of the sales model.
It can be said that Volvo's comprehensive transformation without dead ends also demonstrates its determination to take the initiative to change. Because of this boldness and solid every step, Volvo has been able to achieve impressive sales results in the fierce competition. In 2021, Volvo Cars sold 171,393 vehicles in the Chinese mainland market, an increase of 3.1% year-on-year, a new high against the trend.
From Volvo's transformation road, we can see that in fact, which business model to adopt is not the core problem, the core is how to better serve customers and better protect the interests of partners. From this point of view, the Volvo T8 direct sales model has indeed achieved a win-win situation for consumers, distributors and brands.