The automotive industry needs to restage its spaces
The automotive industry is facing radical upheaval: This is because the electrification of vehicles will have a greater impact on sales channels than expected. Whereas with the internal combustion engine, it was large-scale branches that presented vehicles in all variants and versions, especially for the strong used-car market, with the e-car it will be scaled-down showrooms that seamlessly accompany their customers from the sales floor to the sofa at home and subtly solicit their purchase decision.
The used-car market for electric vehicles is still in its infancy, and may never reach the scale of the market for internal combustion vehicles. The loss in value after the first few years is too high due to the rapid developments in battery and charging technologies, and the purchase incentive programs for new cars are too tempting. The large floor-space of many branches was unavoidable for used cars with internal combustion engines, especially since the actual condition of the car could be inspected on the spot. If this aspect disappears, many retail locations will have to adapt: Into smaller inner-city spaces, where they can hope to attract the attention of new car buyers. So-called end-to-end experiences form the most important customer loyalty tool, and in future, will offer a seamless transition between the physical and digital shopping experience and thus become a decisive factor. Anyone who was at the IAA in Munich in the summer of 2021 was able to get a first impression of these developments.
Touchpoint Retail: The store as a cool meeting place
For this, showrooms need to be rethought. The automotive industry needs to embrace the holistic approach much more and minimize oversized storefronts, or transform them into a culturally or gastronomically valuable meeting place, where only one car — if any at all — is still on display. Take, for example, the electric car maker and Amazon fleet partner Rivian, which recently opened its first community space, “Venice Hub,” in L.A., designing the space primarily for people: The warehouse is equipped with a garden, children’s playground, lounge, library and a “Maker’s Space”, can be used flexibly and is designed primarily for exchange. Rivian’s retail space ties into the membership idea, which intensifies brand loyalty through member experiences. Rivian, like Tesla and Polestar has completely transferred the point of sale to its digital platforms.
How the future of commercial brand spaces can look like shows Mercedes-Benz by its Brand Space in Munich. At Studio Odeonsplatz everything — from the concept and infrastructure to the entire brand communication — is understood as a media space telling curated brand stories from and with curated designers, artists, technologists and creative makers like Sarah Shakeel or Virgil Abloh.
The car-sharing provider Lynk & Co. also refers to its physical spaces as “clubs”; social spaces that offer people special experiences and a real incentive to visit — especially after lockdowns and social distancing. For example, events, DJ concerts or other exclusive cultural offers are featured, and local artists* and sustainable street style brands are on the program. The appropriate setting invites sharing of “instagrammable moments” with the rest of the community.
Touchpoints with development potential: Charging stations
In Germany, around 356,000 electric passenger cars were registered in 2021 — a record figure (source: “Der Spiegel”, April 2022) and the tendency is also increasing worldwide. With more and more electric cars, charging stations (Minimum charging time: 20 minutes) are designed to offer drivers a special, additional brand- or product-experience. And the first inroads have also been made here:
Volvo is working with its Polestar subsidiary on a “Powerstop” concept, which places the 150-kW fast-charging stations in a larger and more pleasant context: Since February 2022, the two companies have been inviting visitors to test drive their all-electric models and enjoy a coffee break with a cinnamon bun in the immediate vicinity of the A8 highway south of Munich. A charging station with innovative, expandable module system that can be easily adapted to future requirements has been developed on behalf of E.ON Drive. With structural components and surface and landscape elements, charging stations are scalable for different contexts and conditions. Since a lot of infrastructure is still poorly established due to poor accessibility, an unattractive environment, long loading times and difficult operation, there is still considerable potential for expansion in this regard, in order to transform the location into a “place to be”. Nevertheless, this presents a good opportunity to visually embody the importance of e-mobility in terms of sustainability.
Car touchpoints in the digital world
Since the pandemic, buying cars online has become more widespread, so another opportunity for dialogue between dealership and customer could also be the much-hyped Metaverse: With the rapidly developing technology, ultra-high resolution moving images based on cloud-rendering solutions can be quickly integrated into the Metaverse, and generate entirely new application ideas. A few examples, such as BMW’s metaverse JOYTOPIA, illustrate the opportunities available to brands. In the future, this digital landscape will form a virtual extension to the brand’s important events and collaborations for users from all over the world — as was the case at CES in Las Vegas in January 2022. During the trade show, JOYTOPIA hosted the immersive installation DIMENSIONS OF REAL, in which visitors could traverse various dimensions and digital landscapes. In order to build a long-term relationship with a much younger target group, Hyundai is addressing them, for example, with its “Hyundai Mobility Adventure” on the Metaverse and gaming platform Roblox. In this virtual space, different users interact as customizable avatars, test Hyundai’s mobility offerings in theme parks, explore innovations and learn more about the experiences of engineers and designers.
The real automobile is increasingly merging with digital formats and more and more offers, parts and services can also be paid for with Bitcoin or other cryptocurrencies. Tesla, for example, has now made it possible to pay in-store with the Cryptocurrency Dogecoin — in some cases not only as an alternative, but as the only option. Mercedes-Benz’ “Signature Car”, the Mercedes G-Class, now also exists in the Metaverse and can be owned digitally. Together with five NFT artists from different fields such as music, fashion, graphic design, architecture, creative marketing, luxury design and real estate, Mercedes-Benz has translated the G-Class into digital and had it interpreted as NFTs in a range of different styles.
Conclusion: An expanded “Brand Ecosystem” is necessary
In the future, the automotive industry must and will position itself much more broadly between mobility-newcomers and other competitors.
As the above examples prove, the “showroom of tomorrow” only offers cars as a “hygiene factor” and enables a customer-centric approach that increasingly works in the automotive industry without cars. For brand manufacturers, a comprehensive omnichannel strategy and presence at different touchpoints will lead the way in meeting customers on as many channels as possible, and satisfying diverse customer needs.
About the author
Mathias Ullrich is Managing Director at LIGANOVA, innovation leader in the field of brand & retail experiences in the phygital area. Over the past ten years, as an industrial engineer, Mathias Ullrich has advised clients from the brand retail sector on positioning, growth and digital transformation. At LIGANOVA, he heads the Experience Solutions division where, at the intersection of people, brands and products, he designs retail locations and experience areas for premium global brands from the luxury, sporting goods, automotive, fashion and retail sectors.
