Bloomberg News

BMW’s Apple-Like Geniuses Sell Luxury Cars with Tablets

May 31, 2012

BMW Adds Apple-Like Geniuses as Growth Push Omits Salesmen

In the new 800-square-meter Paris boutique, the four cars in the showroom are displayed beneath a light screen that can simulate conditions like driving through a forest. Photographer: Balint Porneczi/Bloomberg

Oliver Watkins struggles to explain to car shoppers that his job is to be a genius for Bayerische Motoren Werke AG. (BMW)

“We tell them we work for BMW in a new, exciting role, and we sometimes refer to ourselves as the ‘geeks’ of BMW,” said the 21-year-old, who joined Cooper Norwich, a BMW dealer in eastern England in September as one of the carmaker’s first two geniuses. More are on their way.

Borrowing an idea from Apple Inc. (AAPL:US)’s stores, BMW plans to add tablet-toting product experts to the staff of its 3,000 dealers worldwide. Watkins and his colleagues will help customers link a car with an iPhone and sort through options like Night Vision and Active Steering without selling pressure.

Seeking to defend its lead in luxury-car sales, BMW will add geniuses to outlets in France, the U.K., China and the Netherlands this year and later in the U.S. The extra showroom staff are part of an overhaul of BMW’s retail approach as competition with Volkswagen AG (VOW)’s Audi and Daimler AG (DAI)’s Mercedes- Benz for wealthy car buyers intensifies.

The strategy kicked off last week when BMW opened a new store near the Champs-Elysees in Paris. The site is the first of a series of shops that focus on showcasing the brand to casual shoppers to broaden its appeal. Audi is joining BMW in introducing less-pushy sales tactics, which include a focus on urban buyers and better integration of showrooms with the web and smartphone presentations. The goal is to win new fans and catch up with Mercedes in retaining customers.

Brand Loyalty

“Loyalty is key because the market is saturated,” said Andy Turton, global development director at consumer-research company TNS in London. “The only way to grow is to take customers from others, but you have to hold on to your own first. Otherwise, it’s like pouring water into a leaky bucket.”

About 47 percent of BMW buyers stuck with the brand last year, compared with an industry-leading 62 percent for Mercedes, according to market research company Strategic Vision in San Diego. Audi’s retention was 37 percent last year.

“The traditional showroom model, where you’ve got a sales hustler closing deals, doesn’t work well in the luxury segment,” TNS’s Turton. “Customers in this space are looking for an experience.”

BMW, which is targeting a 20 percent increase in car sales to 2 million vehicles by 2016, is projected to have its lead over Mercedes tumble 72 percent to 30,400 vehicles in 2013 from 109,500 this year, according to figures from IHS Automotive.

Mercedes in Manhattan

Mercedes, which is seeking to retake the luxury-car sales lead from BMW by the end of the decade, sparked the retail battle after opening a store focused on promoting the brand more than selling cars in March 2009 in central Munich, BMW’s hometown. That was followed in June last year by a $220 million dealership in Manhattan, a few blocks from BMW’s new store.

The Stuttgart-based carmaker also attracted more than 410,000 visitors to a showroom that opened in Tokyo in July. The store, which includes a coffee bar and Mercedes merchandise, marked the first of about 10 urban outlets targeted at boosting the brand’s appeal with younger consumers.

“Mercedes has continued to find increased retention, partially due to a wide range of product choices and consistently better messaging” about the brand’s attributes, said Alexander Edwards, head of the automotive practice at Strategic Vision. “It is easier for customers to be loyal because there are so many opportunities to be loyal.”

Those possibilities will increase as the brand adds more entry-level models like the CLA compact coupe and doubles the variants of the S-Class flagship to six.

Audi is upgrading its store concept to target high-end neighborhoods in large cities, said Moritz Drechsel, a spokesman for the Ingolstadt, Germany-based brand. The focus of the approach is on the combination of web-based services with the personal touch and knowhow of a dealer, he said.

Larger Line-Up

In addition to adapting to changing buying habits, BMW’s retail strategy is also a reaction to a lineup that’s outgrowing most showrooms. Since 1999, when BMW’s range consisted of three sedans and a roadster, the brand has added four sport-utility vehicles, the 6-Series coupe and the 1-Series compact. More models are on their way, including the i8 plug-in hybrid supercar, the X4 SUV and a line of front-wheel-drive vehicles.

In the new 800-square-meter (8,600-square-foot) Paris boutique, the four cars in the showroom are displayed beneath a light screen that can simulate conditions like driving through a forest. The music is computer generated and changes based on the activity in the wood-framed space, while mirrors reflect the two cars in the display windows to passersby. The store is flanked by a Cartier and a Hermes shop and is down the street from Louis Vuitton’s mega store.

Paris Chic

“We want to bring the car environment into the shopping environment,” Ian Robertson, BMW's sales and marketing chief, said at the opening, which was attended by Charlotte Casiraghi, a member of Monaco's royal family. “There’s no doubt that the retail experience will play a huge role in being successful. The car industry is about 100 years old and basically hasn’t changed. The future could look very, very different.”

The investment in the retail strategy, which will include about 20 brand stores in major cities such as London, New York and Shanghai as well as the addition of geniuses, is “significant,” Robertson said, declining to provide figures.

For Watkins, the BMW pioneer from Norwich, it gave him a chance to pursue his passions for cars and gadgets after previously working at a PC World computer store.

“I love the interaction with the people and helping them better understand the cars and the technology,” he said. Also, his mom’s “very proud” to have a BMW genius in the family.

To contact the reporter on this story: Chris Reiter in Berlin at creiter2@bloomberg.net.

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net.


Monsanto vs. GMO Haters
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • AAPL
    (Apple Inc)
    • $95.39 USD
    • 0.04
    • 0.04%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus