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The Advent of Digital Retailing and the Impact on Global Car Dealership Structures

More digital showrooms being opened by OEMs globally to be strategically located in city centres

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2014-01-09 05:22:02 - The Advent of Digital Retailing and the Impact on Global Car Dealership Structures - a new market research report on

Original equipment manufacturers (OEMs) are expected to open more digital showrooms/lifestyle stores globally by 2016, with car retailing mutating from retail experience into brand experience.

More digital showrooms and lifestyle stores being opened by OEMs globally will be strategically located in city centers. Digital showrooms feature digital tools specifically aimed at enhancing both the retail and brand experience; they have limited on-floor physical inventory. Lifestyle stores focus on offering a strong brand experience through lifestyle-related concepts of art, fashion, music, food, and design.

Around 20% of the conventional dealership space will give way to digital technology like gamification, augmented reality, and 3D technology.

European OEMs are leading the way in terms of digitization in retailing—a major element considered for all of their future



retailing programs. North American OEMs are still evaluating the retailing scenario and will mainly improve in-store digitization over the coming years.

Audi, JLR, and Nissan have already launched diverse digital showroom concepts, as well as digitally revamping existing showrooms for retail and after-sales purposes. In the United States, OEMs such as Lexus and GM-Cadillac approach digitization mainly in existing showrooms, encouraging the existing sales force to apply digital means.

The expiration of the EU´s block exemption regulations is seen as an opportunity to restructure dealership networks, to eliminate underperforming dealers, and to cease multi-brand retailing. Restructuring will include digitization of showrooms in strategic locations to capitalize on the halo effect of digital showrooms.

By end of this decade a higher percentage of sales leads will originate from digital means rather than through traditional channels such as walk-ins, cold calls, or leaflets.

Unlike Europe, North American OEMs and dealers are pursuing digitization models through existing stores. Significant investments are being made to update store technology, train staff, and digitally integrate various aspects of the car-retailing process.

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