Everything you need and no more

Polestar continue their entry into European markets, and last week they opened a new test drive centre close to my home.  They have two ‘Spaces’ so far in the UK, one in London, the second in Manchester with two more due to open in Birmingham and Glasgow by the end of this year, further additions planned for 2022.  The Spaces are operated by dealer groups, and are similar to Tesla mall outlets in terms of location and style, with a strong emphasis on positioning the brand.  The test drive centres are almost the antithesis of this – simple, functional and low cost.  The Milton Keynes facility is a single bay industrial unit on a park where the neighbours include a sign shop and a couple of flooring suppliers.  Internally, there are a couple of large format touchscreens similar to those used in some dealerships, some limited branding on the walls, some customer seating, a coffee bar and a single car on display with appropriate lighting to show it off well.  Outside there is space for five or six test drive cars to be parked for pick-up.  Most of the interior is bare walls, floor and roof structures with exposed services.

Those tasked with managing the corporate identity of other OEM brands, or who provide interior design services to the OEMs will be horrified.  I guess that in this upside-down world we live in, some retail design consultant has charged a six figure sum to ‘design’ the test drive centre, but I prefer to think that in a very pragmatic Swedish way, the solution was developed internally on the basis that the car should do the talking.  No specified marble supplier, no Pantone code for the colour of the block walls, no prescriptive requirement to source the furniture from a particular supplier.  I could easily believe that the whole fit-out cost less than the retail price of one Polestar 2.  Mixing my OEMs, if you applied Toyota-style lean thinking to this facility, I think you would struggle to find anything which could be described as ‘muda’ – waste.

The question which we cannot yet answer is how this will translate into sales.  Will prospective customers be horrified at the surroundings, and in some way transfer those negative thoughts onto the product itself, before retreating to one of the many traditional and much higher cost dealerships around the area to buy a competitor product?  ICDP consumer research over many years has shown that the physical premises are not a deciding factor in a new car buying decision.  There is a bar to cross which relates to cleanliness and whether there is any indication that the dealer is about to go bankrupt, but once over that bar, it is all about people and product.  The Polestar approach is in itself sending a message – “we’re a different sort of car company, and it’s all about the product.”  If the test drive lives up to expectations, and the personal interactions show empathy and professionalism, then sales should follow.

As the industry continues its arguably late move towards omni-channel, we do need to challenge the traditional views on dealer property.  We need to get total distribution cost down – an area that has proven to be more stubborn than engineering or manufacturing cost – and the facilities have been and remain an obstacle to this.  It is not only about the millions sunk into bricks and mortar (or more typically glass and marble), it is about the fact that those facilities then need to be staffed, and both then become fixed costs that endure for years.  If the Polestar approach proves to be flawed in some way, it’s no big deal.  They can remodel it for less than the cost of the architect’s fees for a traditional dealership.  If the location isn’t quite right, no problem, a new one can be opened up in a better location and the current centre will be selling carpets or car parts in a couple of months under a new tenant.

I have no vested interest in whether Polestar fails or succeeds in the market, but I do hope that it succeeds with this approach.  We need some examples at the opposite end of the spectrum from the mega-million experience centres that show there are many ways to connect with customers, and that it does not require the OEM or a dealer partner to invest six figures, let alone seven.  The experience centre and the test drive centre both have a place in an omni-channel network strategy, but we need to move the needle hard towards the latter.