The reinvention of Polestar's concept for authorized dealers

Monday, 17 september 2018 | Redacción CEU

Polestar has set itself the goal of opening sixty car dealerships in different parts of the world in 2020. These places, which are known as Polestar Spaces, will offer a vehicle marketing approach which is very different from the one we are used to. One of the points that stands out about the new proposal of the electric performance firm is that these places will not be destined to direct car sale. Then, what is the company's plan? How will the firm sell cars without selling them?

The new subsidiary of Volvo Cars Group, Polestar, has the firm intention to break away from the traditional concept of authorized dealers. The brand has recently announced its will to open 60 new "authorized dealers" in different parts of the world which they consider strategic points. These new spaces will be more similar to small auto shows than to traditional sale points. The intention of Polestar is to try new ways of marketing vehicles in an effort to focus on the customer experience and less on the direct sale of cars. Will this strategy be effective?

From authorized dealers to small car shows

The electric performance car company plans to achieve this goal by means of a new authorized dealer concept that moves away from the usual pattern and resembles an exhibition room above all else. Polestar wants this new space to be able to convey its philosophy and, that is why, as part of its design, it uses the same language as in its models: minimalism. In the so-called Polestar Spaces, visitors can admire and appreciate in isolation the main elements of Polestar's vehicles. For example, they will exhibit some of their car components such as the rims or the details in carbon fiber, thus emphasizing their artistic expression.

Polestar's plan is for customers to be able to have a more direct experience. Users cannot just see these components, but they can also touch them. The firm wants clients to discover the engineering that hides behind the "skin" of their vehicles and to appreciate these cars from a different perspective. These spaces will also have brand experts that will advise customers in their visit to these "authorized dealers". These professionals will not earn commissions for the sale of cars, so the experience will not be as aggressive as it may be on other occasions. The company wants to avoid customers feeling pressured when signing any type of contract.

Their plan is for their clients to go on the Internet after their visits and buy the vehicle they have found in these spaces and in which they are really interested. Although Polestar's proposal is disruptive in some points, these original points of sale will continue to maintain some key aspects of the commercialization of vehicles such as including the fundamental and necessary possibility of testing cars.

New trends in authorized dealers

The digital environment is the cornerstone of Polestar's marketing strategy. In fact, the purchase of the vehicles is limited to the online territory. This proposal fits in precisely with one of the most important conclusions of the Automotive Retail 2030 report carried out by EY: the vehicle retail industry must face a profound transformation, if it wants to be able to keep up with the technological disruption. According to this study, 80% of customers use the Internet to search for information. Buyers also spend an average of 10 hours to learn about the product and dealerships online.

This same report ensures that 70% of customers who buy a new car intent to do it on their first visit to the authorized dealer. In fact, 80% close the deal with the first person they talk to. The preparation and specialization of the professionals is crucial so that the sale can conclude successfully and the relationship between seller and client must be carefully watched. Consumers also consider that both experience and guidance are the most important aspects of their shopping experience.

Other significant aspect of car marketing is attracting customers. Visits to authorized dealers have fallen considerably. Most people who come to these points of sale do it with the aim to complete an acquisition. Authorized dealers must reflect on the new needs and interests of clients and be willing to bet on new formulas that fit better with the current environment. On the other hand, EY's report concludes that, now that the Internet and social networks are the main information sources, authorized dealers are not taking advantage of these resources in a way that is proportional to its potential.

However, Polestar is not the only company that is betting on new formulas in the commercialization of vehicles. More and more brands are aiming at original alternatives. For example, Audi, which is fully aware of how important it is for the staff to be well trained in the purchasing process, has designed a video game that is used to train salespeople in authorized dealers. Thanks to this "virtual authorized dealer", workers can try new ways to sell cars, measure the different possible reactions of customers and improve their communication techniques.

Without a doubt, the change in the automotive industry is transversal. It does not only affect vehicles and manufacturers, but authorized dealers, customers, the environment and even our way of life as well. At The CEU IAM Business School we are aware of the challenges posed by the technological transformation of the automotive industry. That is the reason that has led us to design our Master's Degree in Automotive Industry Businesses. If you want to become one of the professionals who will be at the forefront in the car world, do not hesitate: bet on this training!