The Internet Can't Match This Raising the luxury car retailing bar

Back when I was 14 years old, I dreamed of becoming a Cadillac dealer. All that shiny new sheetmetal, the smell of plush upholstery and the power of those V-8 engines was all I needed to define my long-term career goal.

That, plus the chance that I might meet a few movie stars or sports heroes.

Well, my fantasy of owning a dealership may have faded, but I remain fascinated by well-appointed showrooms and enjoy browsing new dealerships.

So when Fletcher Jones Motors Cars in Newport Beach, CA, moved into a new 176,000-sq.-ft. (16,350 sq. m) superstore this past August, I had to check it out. The size is not overwhelming, although it is Mercedes-Benz's largest store in the United States.

What struck me most vividly was the way this new store design supported the image of the Mercedes-Benz brand and the needs of its upscale clientele. The overall ambiance of the facility more resembled the Ritz Carlton Hotel than a car dealership.

The environment was friendly, not intimidating.

Among the amenities offered are a putting green, a coffee bar, an accessory boutique, a manicurist and a shoeshine station, individual work stations, concierge and valet services, and a conference center for charitable organizations. A European style bistro will open on the premises very soon. All of these services are available while you shop for your new Mercedes or wait for your car to be serviced.

Fletcher Jones Motor Cars has 140 service stalls, which allows for quick servicing, with many functions being completed while you wait.

One of the more unique features of the facility is its car wash. Sales customers can use it at no charge anytime the dealer is open. On Saturday mornings, however, the car wash is open to any Mercedes-Benz owner at no charge, and free coffee and Danish are provided.

This event has been hugely successful, and up to 600 cars get a free wash on Saturday mornings.

Fletcher Jones Motor Cars has adopted a retail approach that makes shopping truly enjoyable and encourages the customer to keep coming back.

It appears to be working. Fletcher Jones sold 271 new vehicles in October, a U.S. record for any Mercedes-Benz dealership.

Marketing executives can debate whether this approach can be cost effective for more mainstream and mass-market brands, but I see no reason why it would not.

Whether we like it or not, fewer and larger dealers offering large inventories and quick service represent the future of automotive retailing.

These showrooms will be designed and operated in a way that supports and reinforces the image of the respective brand. Brand image is reinforced at the retail level where the prospective buyer shops his/her various choices and forms opinions.

This is why an increasing number of clothing designers are insisting that their merchandise be sold in mini-boutiques within department stores. They are able to convey the ambiance and lifestyle of the designer's fashion.

Although many observers believe the traditional retail approach eventually will be a relic of the past, the more likely scenario is that 25 years from now most people will purchase their new vehicle the same way they do now.

True, alternative shopping services and the Internet will play an increasing role in the retail environment, but they will not replace the conventional retail dealer.

Even those who purchase a car or truck on the Internet will visit a dealer for test drives, paper work and product demonstrations.

Most consumers still like to touch, see and smell the merchandise. Catalog and Internet sales of soft or hard goods won't come anywhere close to matching the levels of conventional retail outlets.

Remember when experts predicted in the 1970s that the VCR would put movie theaters out of business? It didn't happen, because human nature dictated that people still wanted to go out at night and be with other people. They wanted not only to see the movie, they also yearned to partake in the experience.

In fact, the movie theater industry has seen its most dramatic growth ever in the past five years.

An increasing number of automakers appear to recognize this and are doing a better job of taking charge of their retail dealers.

Ford Motor Co. will be consolidating its dealers in Tulsa and Lincoln/Mercury dealers in San Diego into large superstores that do a much better job of creating an enjoyable shopping experience and supporting the brand image.

GM is taking a similar approach in the San Fernando Valley, north of Los Angeles.

Even Jaguar and Aston Martin will be launching a superstore in Orange County (about 10 miles from Fletcher Jones Motor Cars) next fall that will represent a showcase for Jaguar and Aston Martin brands replete with a palatial showroom and car wash.

This is the approach that will truly satisfy customers in the long run and will still generate the bulk of new vehicle sales.

Alternative buying approaches will grow, but they will have to rely on the conventional dealership to provide the customer with first-hand experience with the product. As long as you cannot touch, see and smell merchandise in cyberspace, the conventional retail approach will flourish as long as the customer's needs come first. - Chris Cedergren is managing director of Nextrend, an automotive market research firm in Thousand Oaks, CA.