For car shoppers wandering around New York City, an expanding array of experience options offers them some novel propositions. They could make reservations for a traditional Korean tea ceremony at Genesis House, grab a drink at the bar inside Intersect by Lexus, or test drive a new Lincoln along the Seaport. The luxurious, service-centric spaces have little in common with traditional dealerships. But is their ultimate purpose the same?
At Genesis House, the main stated goal is to introduce drivers to Hyundai’s new upscale line of cars. Visitors need to make reservations at the restaurant, but passersby, attracted by the hint of a car outline behind metal beaded curtains in the window, also can stop in for a show in the lightbox theater or a visit to the library contained in the space. Rather than a new brand, Mercedes uses its New York display space to introduce consumers to its line of electric vehicles. In this tech-oriented space, interactive displays help people gain in-depth information about charging capacities, the vehicles’ range, and the benefits of owning an electric car. Lexus is more esoteric in its goals: Its three-story, 16,500-square-foot showroom is dedicated to showcasing core brand values, such as omotenashi, or commitment to hospitality, and takumi, defined roughly as artisanship.
In encouraging test drives from the Seaport, Lincoln appears more determined to ensure potential buyers include the brand in their consideration set. It wants younger drivers to have the experience of actually driving the cars, not just seeing them in a showroom. Such interactions will, it hopes, update its brand image, which continues to suffer from an outdated reputation. The Lamborghini lounge may be incredibly luxurious and richly appointed, but it also serves a clearly practical purpose. Allowed in only by invitation, visitors to the lounge can spend time with a sales representative to personalize the vehicles they plan to order. This appealing direct link with brand representatives encourages many consumers to select added features, which then increase per-car profits by approximately 80 percent. Later, they return to the lounge to take delivery of their previously ordered cars.
In this sense, the directly owned and managed showrooms, experience centers, lounges—whatever name they take—exist for disparate purposes. But ultimately, the goal is the same: The carmakers want to reach buyers directly to establish their brand image and make clear the value that they offer. And these efforts in turn are inevitably directed toward increasing sales.
- The car brands mentioned in this abstract are all high-end or luxury brands. Can similar showrooms benefit economy or midrange car brands too? What about trucks or utility vehicles? Why or why not?
- Why are these types of showrooms mainly located in New York City? What makes that location particularly appealing for such branded outposts?
Source: Brett Burk, “Selling Cars, Plus Coffee, Tea, or a Fancy Dinner,” The New York Times, December 30, 2021