KIA’s new city store format in Stuttgart – similar but different
At ICDP, we closely monitor all developments in automotive retail (the main focus being Europe), including the introduction of new formats and services on offer to customers. A recurrent area of interest to us remains the operation of new and permanent retail formats (‘micro-outlets’) in high footfall locations such as shopping malls or shopping centres.
To date, we have seen many initiatives being launched and operated either by the OEM solely, in conjunction with a local dealer (group), or by dealers themselves - the latter two benefit from high subsidies from their manufacturer partner. Whilst sales can be completed at these outlets, this is not the primary function for many; instead they are targeted at building brand awareness, and therefore different objectives and KPIs compared to traditional dealerships apply. However, to our understanding, there is still no system in place to track customer actions and touchpoints within the whole brand network after having visited a micro-outlet, which could help to better understand the contribution to a sale. We have seen many initiatives coming and going, with some operating for years – despite challenging economics – whilst others were intended only for a short period.
Recently, I had the opportunity to visit a new short-term micro-outlet operated by Kia Motors Europe without any dealer involvement in the shopping centre Milaneo in Stuttgart. Milaneo might sound familiar to you - it is the same shopping centre where Opel trialled the Cayu format in conjunction with the dealer group Staiger (belonging to AVAG Group) which sadly halted operations shortly after its opening.
The new KIA pilot, targeting lead generation, is significantly different from many other concepts seen in Europe to date. There is a single car placed in front of the showroom whilst the store itself focusses on technical aspects, and therefore requires significantly less space compared to other formats. As well as prominent brand signage, it is equipped with tablets to provide different information to customers such as FAQ about KIA and the concept itself. However more interesting are the technical devices as part of the “Experience Zone” – 3 large screens with internet connection for a playful customer experience. I was welcomed by an employee and we started the on-screen process. Whilst wearing a type of headset, I had to choose some pre-settings as regards my requirements for a new KIA, these were then matched light-heartedly with a model in the range. In my case and without further reactions from my side, the car selected was the ProCeed GT-Line but with a match of only 40 – surprisingly low as I would have been very happy with that car!
Then, I was able to continue either with the configuration of this model (handled via the KIA Germany website), filling in a form to arrange a test drive, or visiting a picture gallery. I was also asked if I wanted to provide my email address to be kept informed about any updates. All of this could be omitted to get to – for some shoppers at least – the part of highest relevance: the gift! Depending on a scoring which I think was based on the match quality / satisfaction level with the car proposed, it will be either be some sweets, a key ring or a tote bag.
Back on the train with my key ring, I reflected on this surprisingly different but positive experience. How was the scoring exactly created, and is this understandable to customers? Could there be a greater focus on lead generation with some sort of more “tangible” benefits with regards to the physical car, such as for example a voucher to test-drive a new model at a dealer of my choice? And is it possible to ensure that the reward system implemented as it currently stands, targets the right audience, other than those just wanting a free gift?
It is good to have this pilot to test new ideas, and there may be significant potential if the challenges can be overcome.It will be interesting to revisit this experience in a couple of months’ time, and see how these insights could be exploited for future initiatives