“Wow, I’ve never seen a car dealer in a mall before!” exclaims the customer walking in the front door of our boutique-style dealership. From their perspective, it’s just an unusual location for selling cars. For an industry that is constantly looking for new ways to improve profitability, it’s an experimental model that is popping up all over the country — and people are watching very closely to see if it is a hit or a miss.
Our group launched a FIAT Studio nearly two years ago at an upscale shopping center. Our entire team has experienced the benefits and difficulties that come with running an atypical operation. Like any “normal” dealership, location is everything, and we completely lucked out.
We are literally next door to a Starbucks. There are three restaurants within our plaza. Our floor traffic does not consist only of people who have specifically driven to a dealership to buy cars; we have curiosity seekers, time killers and bored husbands. That non-targeted audience generates buzz for the brand — and the occasional surprise sale.
One couple marveled at how their $5 cup of coffee ended up costing them $25,000. They happily drove away in a new Cabrio they hadn’t intended on even looking at two hours earlier. At a typical dealership, that customer may have never bothered coming in, but at the mall, anything can be an impulse buy.
The Casual Shopper
As you can imagine, handling customers who may or may not be interested in a car is a tough job for the sales staff. They don’t want to smother the couple waiting for dinner reservations, but losing a potential sale by not pursuing it with vigor is unacceptable.
My staff is excellent at that balancing act. I attribute their success partly to the fact that, with only one exception, my salespeople never sold cars before we opened. These professionals came in excited about the brand and about doing something different — and approach our dealership like a more traditional retail experience, not unlike an Apple store.
They truly engage with everyone who walks through the door. They ask the right questions and allow the customer to feel in control of the process. Does this mean we are pushovers? Hardly. We are what I like to call “aggressively friendly.” We push for the test drive — and the sale — but we make it feel like fun. Our customers love us for our laid-back approach. I would be remiss if I didn’t point out that, given our location, they are also a lot less guarded when they walk in our doors.
A Tight Fit
Of course, there are many things that you take for granted at a typical dealership — like having room to display and store vehicles. With a whopping 2,400-square-foot showroom, we have room to display five cars comfortably. Good relationships with our mall management staff and the ability to double-park FIATs in a single space allow us to have a reasonable selection in the back of our studio.
Many of our cars are housed at our service and prep center, which is about five miles from the mall. We only sell new cars, so my sister stores reap the benefits of being fed local trades. Meanwhile, I pay only a fraction of the typical dealership rent or mortgage.
Off-site service, prep and accounting departments also present some unique challenges. My team and I will clean up cars on site for immediate delivery. Our customers only know our studio location, so we need to make sure there is a smooth transition to the service site. We often have to drive deals, deposits, mail and supplies from one location to another.
Technology helps tremendously in keeping the processes flowing, but every day a trip must be made from the studio “island” to the mainland, and traffic is always a concern.
I personally love having my own little sales island, even with the headaches it creates. The right team, the right product and great communication are the true keys to success for a boutique dealership. It might not work for many dealers, but for those launching a new brand or just opening, it can be a great place to start.