Disruption this, disruption that! Breakfast of business blowhards. Disruption hype sells lots of consulting hours and countless bottles of Maalox. But I’ll wager that most of what people perceive as market upheaval began as a slow trickle of change from far away. Like melting mountain snow and spring rain that eventually inundate the valley below.
Twenty years ago, my company’s VP of Sales ominously declared that “any salesperson who doesn’t add value risks being replaced by a kiosk.” That hasn’t fully happened, nor exactly in the way he envisioned, but his warning was unusually prescient. BMW announced plans to toss salesmen for technology-enabled ‘Geniuses,’ according to an article in The Wall Street Journal last week. In the showroom, “there will be fewer balloons, fewer banners and more digital, more hands-on,” said Karl Schmidt, chief executive of Morrie’s Automotive Group in Minnesota.
BMW will emulate Apple Computer’s sales strategy using technology-enabled “product geniuses.” The purpose? To answer questions for prospective buyers, and to explain how BMW automobiles work. And . . . . ? That’s unclear. Get coffee? Hang up coats? Close the deal, maybe? If so, get ready. That cliche part of the car-buying experience won’t look, sound, or feel like anything that car buyers have known before.
“BMW’s new program could mean, among other things, fewer salespeople and fewer cars on showroom floors, and more information delivered through video displays and by employees who are ‘definitely, definitely not salesmen,’" said Ian Robertson, BMW’s sales and marketing chief. Wait – did I read that correctly? Sales and marketing chief anchors his revenue strategy on not-salespeople? Yes, I think so.
Interestingly, BMW cannot claim early-mover status in bringing Apple’s retail innovations into the realm of automotive sales. Last November, GM announced its initiative when the company asked “thousands of dealers to create in-store connected car centers that resemble Apple’s Genius bar,” according to an article by Amy Gilroy.
So - for BMW and GM at least - balloons, banners, and badgering salespeople will be replaced with iPads, touch-screen technology, and genius workers. We are moving forward. I like it. Does that mean adios to de rigueur ear-splitting showroom pop music, and omnipotent, unseen managers to bless or reject customer price offers? Probably. “You will have a low-touch service where [dealers] basically use call centers to sell cars,” said Mark Rikess, chief executive of The Rikess Group, a consulting company. You might drive away today in your dream car in Toreador Red Metallic, but not before logging onto a website, and talking to someone wearing a headset, working from afar. You probably won't need to negotiate for floormats, either.
The efficacy of BMW's copycat sales innovation will become clear in the coming months, but I don't think it surprised many people. While Apple paved the way for the retail floor product genius concept, other converging forces drive its use in automotive retailing:
1. Declining margins. “Car shoppers could soon see two types of dealers emerging: some going more to a full-service experience, giving customers more concierge-like service. Others could move to a more no-frills model, keeping overhead costs low and adopting a high volume Internet-driven sales model," according to The Wall Street Journal article.
2. Growing antipathy for the 'hard sell.' As durable as the car salesperson has been in the automotive showroom, customers have been vocal about their disdain for the experience, and automotive manufacturers are finally feeling pressure to change.
3. Increasing number of technology-fluent customers. “Consumers accustomed to online shopping and the ultra-clean look of Apple’s stores are increasingly impatient with the 20th Century ambiance of most auto dealerships.”
4. Cars as computers – computers as cars. There’s so much information technology in vehicles today, the lines have started to blur. Cadillac’s CUE- Cadillac User Experience - makes IT as integral to the driving experience as the engine, brakes, power train, and suspension.
5. Challenged talent acquisition. As millenials continue to eschew sales careers, other kinds of knowledge workers will be easier to find. “Dick Heimann, vice chairman of Lithia Motors, Inc. said the design changes and addition of 'product geniuses' could make the job more appealing to young people who are more familiar with the Apple retailing model. ‘There is not that pressure on you to sell the car,’ he said, adding that his company plans to scout colleges to fill the new ‘product genius’ positions.”
The Apple selling model's induction into automotive retailing will ripple into sales strategies elsewhere. The traditional B2B “hunter” salesperson, steeped in lone-wolf prospecting and deal closing, might reveal some nervous perspiration right about now. Not from the prospect of being replaced by a new generation of assertive, newly-minted, money-driven college grads. No worries there. The rumble in the distance comes from equally smart people who have little aspiration for a career in sales, but rather, a passion for working with some really cool technology.
