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Survey finds digital car-showrooms growing

The advent of digital retailing has seen car companies scrambling to innovate and adopt new retail models to appeal to younger buyers, a generation that engages through collaborative consumption and targeted digital marketing campaigns, according to a global survey by Frost & Sullivan, a growth-partnership company.

The firm expects that by 2020, 60-70 per cent of new-car sales leads will be generated by digital platforms, either websites, mobile sites, social media or apps.

German automaker Audi is in the front line of this change in retail networking. Its digital showroom Audi City, in an upscale shopping zone in London, presents the entire line-up of 40 models virtually. It encourages visitors to configure their dream cars on multi-touch tables, investigating all the possible options by themselves.

"The halo effect of the digital showroom in the heart of the city is expected to drive sales to outer stores and potentially affect dealership network set-ups, both in terms of size and total number of traditional dealerships," said Julia Saini, Frost & Sullivan director of growth consulting on automotive transportation.

Car companies are also using fashion merchandising and combining lifestyle elements into retailing globally. Intersect by Lexus Tokyo and L'Atelier Renault in Paris conduct special events and exhibitions for new product launches, offering a strong automotive brand experience through concepts of art, fashion, music, design, food and technology.

The advent of digitisation in car retailing has led to the development of new and additional performance indicators. It has seen the introduction of innovative sales strategies, and both cost reductions and additions in up-front investments. New key performance indicators such as brand awareness, digital engagement of customers, customer age, lead response time, and vehicle-configurability satisfaction will be of increasing importance in future digital retail formats.

"Better quality leads and easier follow-ups through integrated social-media strategy define the success of digital showrooms," Saini said. "By 2016, automakers are expected to open more than 100 digital showroom/lifestyle stores globally, specifically aimed at enhancing both the retail and brand experience with limited on-floor physical inventory."

With European and North American original-equipment manufacturers expected to invest heavily in updating store technology, training staff, and digitally integrating various aspects of the car-retailing process, soft digitisation technologies such as digital tools, signage and kiosks are anticipated to grow strongly in the short term.


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