Pop-ups shake up auto retail

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Dealers watch to ensure new OEMs’ pop-up retail experiences aren’t the thin end of a wedge

If fewer people are visiting dealerships to look at cars, is the answer to bring the cars to the people?

OEMs around the world, and now in Canada, are experimenting with a variety of new pop-up retail models, and community-based experiential events.

They are designed to kick-start conversations by presenting vehicles in entertaining, playful ways, using digital tools and technologies not often available in dealerships.

The OEMs say that their dealers still play an instrumental role as the conversion point in vehicle sales and are an integral part of the OEM’s business.

They say they are just trying to do their bit to drum up interest and get consumers excited about their product lines by embracing new strategies and technologies.

The first automotive brand gallery pop-ups surfaced in U.S. malls in 2015 and in Canadian shopping centres, one year later.

The idea behind the new approach was for OEMs to connect with customers in a context that would be different from the traditional dealership, especially with regards to customer sales expectations.

“When I think of pop-up, I think it’s the opportunity to engage people and to not necessarily interrupt, but to command their attention in a place, whereby, they’re not necessarily shopping, and they’re not necessarily being pressured to make a purchase,” says Jamie Humphries, Director of Marketing at Toyota Canada. “In that moment, there’s an open window of communication.”

Auto marketing lends itself well to “thinking outside the box,” says Humphries. It’s important for Toyota to extend its marketing efforts beyond TV and radio ads and embrace innovation, so that it can properly inform Canadians about what “Toyota is up to, other than just strictly producing great cars and trucks,” he explains.

“We definitely see a need in our industry to reach out to customers a little bit more upstream in their shopping process, to expose them to the different brands and models that we carry,” says Norman John Hébert, Vice President of Corporate Development at Groupe Park Avenue of the Greater Montreal Area.

As with other retail categories, people are mostly doing their shopping online, says Hébert.

“The traditional showroom today is a place of transaction, rather than a shopping area.

“The sad part about that for us, as a distributor, as someone who represents these wonderful brands, is that we don’t get a chance online to really show people the true value of the products,” says Hébert.

To shake things up a bit, and to better engage the public in the “beautiful designs, interior features, or most importantly, the driving on-road behaviour of the product,” Groupe Park Avenue, which currently has 18 stores representing 10 brands, is launching its own “unique retail concept” this summer.

The first of its kind in Canada, the “product discovery environment” — its official name and the scope of the site is set to be announced in July — is both similar and different to the pop-up gallery concept.

Group Parke Avenue’s upcoming project will enable the public to discover more about its offerings, largely through the latest technology — this includes computer-generated “realities” such as virtual reality (VR) and augmented reality (AR), says Hébert.

Toyota pop-up galleries have also employed VR to highlight brand offerings, such as Toyota Safety Sense Suite features, and to “entertain and enlighten” consumers, says Humphries.

Groupe Parke Avenue’s undertaking differs from the brand gallery pop-up, because it is going to be a permanent location, spearheaded by the dealership and not the OEM — although OEM input into the facility has been critical, says Hébert.

“This is not a multi-brand, Costco approach to ‘Pepsi next to Coca-Cola’; this is a unique experience for a specific brand at a time.”

To “reinvent the customer experience,” Groupe Park Avenue chose to work with automotive industry architectural and brand identity consultants, Weis and Associates.

“Weis has a great understanding of how people interface with technology. They’re a fantastic partner of ours and they will play a big role in the conception of our space and the flow of customers through it,” says Hébert, adding that several Montreal-based technology partners have also made contributions to the project.

Space and Time

Toyota launched a brand gallery pop-up pilot program for three months at Square One Shopping Centre in Mississauga, Ont. in the spring of 2016.

Building on the success of that experiment, the company ran Towards Tomorrow by Toyota between Nov. 1, 2016 and Jan. 30, 2017 in malls in Que., Ont. and B.C.

Humphries says he was surprised by the average duration of more than 18 minutes consumers spent in each of the galleries. “You tend to think of retail as being very transactional, being very in and out: you get your groceries, your dry cleaning; but in this case, 18 minutes of engagement is very valuable in terms of consumers really having a deep understanding of what we’re up to.”

More than 60 per cent of people surveyed by Toyota who spent a minimum of 18 minutes reported a desire to visit again, adds Humphries.

“I think from the dealer perspective, this really was about providing more information to people about what Toyota had in the marketplace,” says Andy Caletti, Owner at Belleville Toyota and Erin Park Lexus Toyota.

Caletti is also Chair of Toyota Canada’s Marketing Subcommittee, and was approached by Humphries for input on the pop-up pilot program before it was launched at the Mississauga, Ont. location, not far from Caletti’s Erin Park Lexus Toyota dealership.

“It’s all about interrupting in the marketplace,” says Caletti, who appreciates the fact that he was invited ahead of the launch to offer comment on the project and was included in the opening at the mall. “You definitely saw that people were wowed. They didn’t know Toyota had this, or what the offering even was.”

When customers aren’t coming to you, you go to them, says Caletti.

The pop-up brand gallery is a great opportunity to position the brand right in front of the consumer, to understand more about what the OEM has to offer and check things out “from a forward-thinking perspective,” he says.

Conversation is King

“We’re really starting to recognize that in order to connect with Canadians and challenge them about the perceptions they might have about Toyota, or the industry in general, you have to really foster conversations,” says Humphries.

These conversations must move in both directions and provide space for a view of more than one specific OEM, to include “any auto company, for that matter” believes Humphries.

Dealers like Caletti, who have been on the brand gallery floor, understand exactly what the customer has seen, and this increases engagement, raising the level of the conversation. “You can have a much more informed dialogue with that guest” notes Caletti. “I know where you were, I know what you saw, and we are able to speak intelligently about what their experience was.”

The car buying process can continue on from where the customer left off at the gallery, instead of having to start over. “It’s all about complementing the experience, instead of taking them back to that introductory 101 again,” says Caletti.

He describes this pop-up power play, as a “two-pronged” strategy, where Toyota Canada “works hard to drive brand perception and attitude towards brand, and then drives those customers to us, the dealers, to hopefully turn those leads into sales.”

Individual dealers lack the money to produce this type of attention-grabbing retail interruption, so the OEM takes care of the “cost prohibitive” nature of the initiative, Caletti explains.

  OEMs vs. Dealers

Whenever an OEM introduces a new way to reach consumers directly, it’s natural for dealers to raise a wary eyebrow, and be protective of their franchise agreements that protect their rights in any given locale.

Brand gallery pop-ups and other retail strategies that “catch customers up stream” in the car-buying process, can appear to dealers and stakeholders as a way for the OEM to start to own the conversation with customers. Dealerships don’t want to risk playing a diminished role in the relationship with their customers.

Humphries says that at first, dealers did express their “trepidation” around pop-up brand galleries taking their place. But as the galleries continue to drive leads to dealerships, dealers are finding resonance with the new approach to retail.

“So what was first seen as a little bit of a ‘Hey! Who’s playing what position? And ‘Are we sure you’re not stepping on our toes’ — and vice versa — has turned into a really nice collaboration in the space, with the experience leading to a dealership visit,” Humphries explains.

He says that staff from various Toyota dealerships have even shown up at brand galleries reporting that they’ve had customers coming in to the dealerships who “talked all about the pop-up, and ‘we just needed to see it for ourselves.’”

“The partnership between OEMs and their dealers is one that is very healthy and should continue to last,” says Hébert, adding that it’s important to reach out to customers via the Internet, or any other channel that can facilitate a multi-channel marketing strategy.

Caletti says he does not believe that the pop-ups have anything to do with disintermediation between the OEM and the dealer. “If that was where they were going, obviously, there wouldn’t have been any support from the dealer perspective.”

“The galleries, the pop-ups, Towards Tomorrow by Toyota, were never designed to sell cars, physical units Everything that we do is with the goal of directing people to their closest Toyota dealership,” explains Humphries.

The product specialists do not have OMVIC licenses and are available to handle people’s questions while interacting with guests in a “very fun way that puts technology at the forefront,” he says.

“The point of the pop-ups is to get them to say ‘Hey, this is kind of cool — Toyota is a cool brand; this is something I’m interested in and I’d like to go learn more.”

At that point, the lead is forwarded on to the dealership.

Pardon the interruption

The one issue facing Toyota Canada brand galleries, is that of scale.

Humphries says connecting with pre-existing local partnerships helps both Toyota, the local business and allows Towards Tomorrow to become highly relevant to “local flavours and preferences.” For Fort McMurray, Alta, for example, trucks would be the gallery vehicle of choice, whereas in downtown Quebec City, hybrids and smaller vehicles would take centre stage.

This sense of local engagement starts with the individual, a new brand of buyer who wants to experience something different, fun and technologically-driven.

These shoppers are normally found beyond the showroom walls of the dealership — usually in cyberspace or in malls around the country.

Along with their comprehensive automotive knowledge, they bring curiosity to the shopping experience and challenge dealers and OEMs to create new channels to connect with them.

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