Why buying cars online will always require a good dealer network
Volvo Cars is pushing into online sales. But that doesn’t mean the end of the road for brilliant retailers. Quite the opposite in fact, says Volvo’s Chief Commercial Officer.
Volvo Cars started online car sales in the UK two years ago with the aim of selling half of all cars globally online by 2025.
The intent is to have a closer relationship with customers – rather than the customer feedback loop and data sitting solely with a dedicated but disparate group of dealerships.
Global CEO Jim Rowan last year explained why owning that relationship is so important.
“It always seemed strange to me, coming from the consumer electronics industry, that you can sell a product that is worth [tens of thousands of dollars] and never speak to the customers. So we need to be part of that conversation,” said Rowan.
“That gives us access to that customer, their data, and gives us a much better chance of continually engaging with that customer to find out what they like about the product and what they don’t like about the product,” said Rowan, “and hopefully keeping them as a lifelong customer.”
“Whether the customer researches online and buys online, or researches online and buys at the dealership, or just goes straight to the dealership because they want a test drive – actually, I don’t really care. What I care about is that at every single touch-point we are connected with that customer – and so if you go to a dealership, you are still buying from Volvo.com and we are still part of that conversation,” he added.
“That gives us access to that customer, their data, and gives us a much better chance of continually engaging with that customer to find out what they like about the product and what they don’t like about the product,” said Rowan, “and hopefully keeping them as a lifelong customer.”
The dealers – or retailers as Volvo Cars calls them – are still crucial to the process, because they are the ones who will deliver the car and provide expertise as and when required pre-sales and after sales and servicing. It’s just that Volvo takes the transaction for a fixed price – which removes the element of ‘haggling’ that can occur within dealerships across all makes of car.
So how is the UK test-bed working out?
“It has been a key learning journey for us,” Björn Annwall, Volvo Cars deputy CEO and Chief Commercial Officer (pictured), told analysts.
“On one hand a key conclusion that you can draw is that when the ‘normal’ consumer follows the normal process, this ‘omnichannel’ approach drives both great customer experience and great efficiency for us, the retailer and the customer, so that is the good news,” said Annwall.
“I think the key learning is that the ‘normal’ consumer is not behaving in the normal way. It is a very important purchase for a consumer – things happen and you want to change things, and retail partners have great ability to handle that flexibility.”
As a result, he said the company was now working on how to strike “the right balance” between what can be handled centrally by Volvo, and which aspects remain with dealerships.
“I think a transparent price and knowing that the price that we are announcing is the price they are going to get,” regardless of whichever retailer they visit, “is something customers [and] our retailers value,” said Annwall. “So there is an advantage with that [online sales] model, but we really need to find the right balance.”
But the answer is “not black and white”. A binary, rigid model as either a classic wholesaler and a pure online retailer “is not at all where we are”, Annwall added.
“We believe in a more hybrid model in between … and that is what we are going to continue to work on.”
Volvo Cars will ramp-up online sales in Sweden and then across Europe and into other global markets after refining its approach in the UK and finding that optimum balance. In tandem, said Annwall, Volvo is “working to ensure we have the right amount of retailers – and high performing retailers – in the network.”
Volvo Car Australia recognises its best retailers every year.
Those awarded earlier this year for a stellar 2023 were:
● Volvo Cars Parramatta – Major Metro Retailer of the Year
● Volvo Cars South Yarra – Major Metro First Runner Up
● Volvo Cars Doncaster – Major Metro Second Runner Up
● Volvo Cars Mosman – Metro Retailer of the Year
● Volvo Cars Penrith – Metro Runner Up
● Volvo Cars Southern Highlands – Rural Retailer of the Year
Find your nearest retailer here. Or start building your next Volvo here.
