The automotive industry is an extremely complex sector. Various players such as manufacturers, suppliers, dealers and customers as well as the constantly changing framework conditions due to digitalization present management with a wide range of challenges.
Strategic issues relating to the dealer network present particular hurdles, as decisions have to be made about the long-term positioning of the company in order to achieve sales targets.
Some of the factors that need to be considered when developing a dealer network strategy are outlined below:
- Market and customer segmentation: The right market and customer segmentation forms the foundation of the retailer network strategy. Especially with regard to digitalization and customer segmentation, the question of the percentage distribution between online and offline buying customers is of particular importance, as this has a significant influence on the customer journey.
- Business models: Based on market and customer segmentation, different business models must increasingly be taken into account in the dealer network strategy in future. These include, for example, car subscriptions and car sharing.
- Sales process and sales channels: First, a decision must be made on how the sales process should be organized in the future (online direct sales, sales through dealers, agency model, etc.). In addition, various online and offline sales channels must be evaluated in order to address specific customer groups in the best possible way. This is also where the mix of the right retail formats by region comes into play, such as virtual showrooms, city stores, flagship stores or test drive centers.
- Location search and planning: The next step is to select the right number of locations in order to achieve the right level of market coverage and customer proximity.
The examples shown make it clear that the correct positioning of the dealer network strategy is an extremely complex challenge. Rapidly advancing digitalization is further accelerating market developments and making long-term planning more difficult for companies.