Your new facility should offer top notch services and customer experience
I recently walked into one of Toronto’s newest dealerships to get a sense of how automakers and retailers are defining the luxury experience for their customers.
It was definitely impressive, both physically and in the way it made me feel, and leads me to believe that the industry is on the right track.
The service waiting area really stood out at the new facility. Granted, fewer owners of luxury brands stay at the dealership while their vehicle is being serviced, but when the customers of this dealership stay, they should have a positive experience.
The service waiting area is open concept, but it almost feels as if there are two “zones.” One feels very much part of the action, without being a street party. Another is more private, without being isolated.
I was reminded of comments from a luxury brand’s service customers that I looked at recently. Those who said their overall dealership experience was positive frequently mentioned the ability to sit quietly or to get on with work they wanted to do in an efficient way.
Some customers also mentioned a welcome opportunity to take a break and “chill out”. This new dealership offers both and it truly seems to say “luxury” without having to shout from the rooftops and without irrelevant and distracting bells and whistles.
Luxury market remains strong
If you look at the list of automotive brands available to consumers in Canada and in the U.S., you’ll notice that the market, in terms of number of brands, is split pretty much 50/50.
When you look at sales trends in 2016 in both of those countries, luxury brands have the edge for brands growing in volume versus those declining for the first half of 2016.
There are quite a few organizations that study the luxury market on a global basis.
One is the International Luxury Business Association, a French-based non-profit organization. It partnered with Ipsos Research to conduct a global study of luxury brands in 13 major markets, though Canada is not one of them.
There are some interesting highlights from the 2016 study, and some of these are pertinent indications of what we can expect over the next decade or so:
• In 2026, the main luxury consumer will be a millennial
While they may not be buying cars at a great pace now, millennials will be in the future when their incomes and needs increase;
• Gender borders are fading
The study concludes that there is a “growing desire from women to indulge themselves by spending more money;”
• For 85% of consumers (not just millennials) quality is the first defining characteristic of luxury
The veneer of luxury is something that customers will see through quickly;
• 64% of consumers associate luxury with a “timeless, unique know-how”
• “Phygital fluidity” is a necessity in the luxury market
There is a rapidly increasing influence of social media when consumers are buying luxury goods; and
• Luxury brands must “meet consumers’ expectations to turn mobile into a strategic touchpoint”
Mobile communication is vital, but the challenge is to do it right and to capture the sense of knowing the customer intimately. Another organization that studies the luxury market is The Luxury Institute based in the U.S. Among its listed clients are Audi and BMW, alongside brands such as Ritz Carlton, Four Seasons and a slew of fashion and retail brands such as Bloomingdales, Cartier, Chanel, Hermès and Victorinox.
The Luxury Institute advocates for what it calls a “bold customer culture,” in which the relationship with the customer is key. The organization analyzed data from one of its clients and saw a direct business outcome based on the strength of the relationship between the client (retail) and their customers.
Note how much larger the share of the customer’s wallet is when the relationship is stronger.
As we’ve seen over the past few years, consumers are demanding the same level of sophistication and integration across all of their retail or service experiences, regardless of the industry.
I believe the three components essential to a luxury experience are:
Personalization —Establishing a personal bond between your dealership and the customer;
Performance — Making the reality match the customer’s highest expectations on people, process and product; and
Perception — Does the customer trust you? Do they think your business is well managed? Do you respect and value them as customers?
Of course, these components should be part of any business, but I think they’re absolutely critical in a business that deals with premium products and services.
I also believe that customers can quickly tell if your staff feel confident, respected by management and share the values of the business. It goes well beyond knowledge and training.
When millennials begin to move into the luxury or premium space, and this will happen soon, they will bring new demands and their own definition of what a luxury experience should be.
The role of the dealership in reinforcing the luxury experience will grow in importance as the emphasis on the total brand experience, rather than just the product, defines luxury.