[spoonful]

Lexus USA general manager Jeff Bracken thinks Tesla's strategy may have viability for selling to a younger gen...

The model that Tesla has to open up their outlets in shopping malls is a clever one, (and) I think they’re getting a lot of folks to stop in and learn about Tesla,” Jeff Bracken, group vice president-Lexus at Toyota Motor Sales U.S.A. recently told a crowd at a late November media gathering here.

“We’re interested to watch what (Tesla does), how the business model works and what kind of customers wander into their outlets,” he says. “That’s really interesting to us and that’s about as much as I would be able to share with you today.”

Lexus Interested in Tesla's Mall Showroom Strategy | Lexus Enthusiast

 

[soarer]

I think this is a great strategy as I have noticed the increase in public engagement with Tesla, this through my own personal facebook newsfeed.

it works even better for area's that don't have lexus dealers as close by

 

[spoonful]

I think this is a great strategy as I have noticed the increase in public engagement with Tesla, this through my own personal facebook newsfeed.

it works even better for area's that don't have lexus dealers as close by

well it would need to happen with the dealers, not instead of them..

If we were ever to consider something like that, we would keep our dealers part of the solution, no question about it,” Bracken says. “But it’s intriguing if young folks are telling us they don’t really look forward to going to a traditional dealership, but they still have an interest in buying a vehicle or shopping for a vehicle. (If) that’s an outlet that could work for them, then we need to take a look at that to see if that’s something that could make sense for us.”

but on the other hand does no one else not think its slightly petulant that these people WANT to buy a vehicle, yet they don't want to go where vehicles are sold... THE FUQ?

I'm interested in cooking dinner but don't want to go to the market, sorry you'll starve....

 

[MilaDenverCO]

Hey Spoonful - you definitely hafta learn to form an opinion, I don't think I got a gist from that comment lol. Love love love the dry sideways sense of humor my friend!!!

>

 

[spoonful]

Hey Spoonful - you definitely hafta learn to form an opinion, I don't think I got a gist from that comment lol. Love love love the dry sideways sense of humor my friend!!!

>

Cheers, consensus usually is I'm difficult, but what does she know hehhehhh >0

 

[DCRH]

one thing i know for sure is i'll avoid these lexus outlets in shopping malls, for the most part they will be filled with people with nothing better to do that can't actually afford it.

 

[Lex Luther]

one thing i know for sure is i'll avoid these lexus outlets in shopping malls, for the most part they will be filled with people with nothing better to do that can't actually afford it.

For the most part I think that you are right. Those people, whether they have the money or not, will get to interact with the brand and get to know some of the vehicles. In the future they then may be more likely to come back to Lexus when they do have money.

 

[spoonful]

For the most part I think that you are right. Those people, whether they have the money or not, will get to interact with the brand and get to know some of the vehicles. In the future they then may be more likely to come back to Lexus when they do have money.

Yes I agree, thats completely out of the question at the dealership level, what with the ACTUAL cars being there and all...

There is some glaringly bad logic being bandied about, dealership shoppers are TARGETED consumers, they have an intent to purchase and have come to the place of purchase, BINGO, they call that a target rich environment. But I suppose a chance engagement in a shopping mall and the opportunity to interact with a brochure and mall rat staffer is a far stronger indicator of intent, even if it is 3-5 years down the road...

 

[Lex Luther]

Yes I agree, thats completely out of the question at the dealership level, what with the ACTUAL cars being there and all...

There is some glaringly bad logic being bandied about, dealership shoppers are TARGETED consumers, they have an intent to purchase and have come to the place of purchase, BINGO, they call that a target rich environment. But I suppose a chance engagement in a shopping mall and the opportunity to interact with a brochure and mall rat staffer is a far stronger indicator of intent, even if it is 3-5 years down the road...

The shopping mall isn't going to target customers like a dealership does, but that is the point. Lexus will be able to interact with a different set of people and potential customers in the shopping mall. People don't just go to a dealership to browse or look around casually. There are probably some who have the disposable income that may be hooked by seeing this shopping mall display, and others may be introduced to the brand and then be more likely to come back a few years down the road when they are shopping for a new car.

 

[spoonful]

The shopping mall isn't going to target customers like a dealership does, but that is the point. Lexus will be able to interact with a different set of people and potential customers in the shopping mall. People don't just go to a dealership to browse or look around casually. There are probably some who have the disposable income that may be hooked by seeing this shopping mall display, and others may be introduced to the brand and then be more likely to come back a few years down the road when they are shopping for a new car.

You're missing the point of TARGETED. Yes, most people will not head to the dealership to browse unless they are shopping for a vehicle. Which makes something abundantly clear, people don't buy vehicles unless they're buying a vehicle.

A 'potential' customer (and i use potential liberally as a person walking into a Lexus mall booth does not inherently possess the potential to purchase a Lexus despite walking away with a glossy new brochure) in a mall setting is worth far less in terms of potential and actual value than a customer in the dealership. In fact the worth (in terms of conversion) is probably equal to that of someone browsing on the internet, actually the mall is probably worth LESS than the internet because of the associated overhead that will go into staffing, rent and content. How many conversions will the mall have to produce for it to be profitable vs the same information available on the internet.

Using your argument Lexus can achieve the same result with posters and a website. They would be reaching the same exact target audience (probably more so as the posters can be in several locations vs the one physical store front) at a far cheaper cost...

A mall booth does not generate long term demand because in case you missed it the first time you're not buying a Lexus unless you're buying a Lexus.

You can prattle on all you want about creating an interaction for them to come back to, but you're simply spouting superfluous soup. They're not buying unless they can buy, they're not buying unless they want to buy.

And if you think a glossy brochure from a mall rat staffed booth 24 months ago is going to factor into purchase decisions then I know a Nigerian Prince who is interested in sharing several million dollars with you....

What's worth more, an impression or a conversion?

 

[O.L.T.]

I'm with spoonful on this one.

There's a complete different mindset when it comes to those that go to a mall and those that make the trip out to a dealership.

In the end I see this mall approach of their's being a big waste of time and resources.

If anything sticking to a setup like the below, with a booth and some reps would be better and likely get a similar response, and of course cost no where as much as building a whole store:

 

[GearHeadPeter]

it's kind of like the Motor Trend Auto shows that go around the country or the LA Auto Show. You get to sit in, and ask questions about the vehicle w/o all the hassle of a salesman, which I like, and most people want. I bought my last 3 vehicles from going to such a car show, and believe giving the customers a way to interact with the vehicles w/o the salesperson pressure will generate converts to a brand.

The Motor Trend auto show that stopped in Phoenix had in attendance well over 100K people over 4 days. That's 100K possible converts.

 

[spoonful]

it's kind of like the Motor Trend Auto shows that go around the country or the LA Auto Show. You get to sit in, and ask questions about the vehicle w/o all the hassle of a salesman, which I like, and most people want. I bought my last 3 vehicles from going to such a car show, and believe giving the customers a way to interact with the vehicles w/o the salesperson pressure will generate converts to a brand.

The Motor Trend auto show that stopped in Phoenix had in attendance well over 100K people over 4 days. That's 100K possible converts.

Thats different then setting up permanent residence in a mall storefront. The shows travel, limited time, its a destination. A storefront in the mall is severely limited in what they can show you, how many vehicles can they fit in an average mall store?

Because they would be Lexus branded you most certainly would be dealing with a salesman as well.

Remember impressions don't equal conversions. In the case of the MT show with 100K visitors, those are TARGETED visitors, quite distinct from mother and daughter shopping for socks happen to pick up a brochure...

 

[Lex Luther]

I assume that they will be putting this store in a mall that is in a fairly affluent area, so it will be targeting customers by income in part. The advantage of having the full store is more complete branding and permanence, but I do agree that the same thing could be accomplished using a display that doesn't include a complete store.

I see this store setup as basically the same as when car companies will park one of their new models on a street corner or outside a building as a display. The opera house in Toronto has Mercedes-Benz vehicles displayed outside of it. It's basically the same idea.

 

[soarer]

it's kind of like the Motor Trend Auto shows that go around the country or the LA Auto Show. You get to sit in, and ask questions about the vehicle w/o all the hassle of a salesman, which I like, and most people want. I bought my last 3 vehicles from going to such a car show, and believe giving the customers a way to interact with the vehicles w/o the salesperson pressure will generate converts to a brand.

The Motor Trend auto show that stopped in Phoenix had in attendance well over 100K people over 4 days. That's 100K possible converts.

Great point, one thing I learned is that people hate feeling like they're being sold to, having to only hear some sales pitch. Education and just making people more familiar with the brand is a great move which indirectly helps with sales.

 

[spoonful]

I assume that they will be putting this store in a mall that is in a fairly affluent area, so it will be targeting customers by income in part. The advantage of having the full store is more complete branding and permanence, but I do agree that the same thing could be accomplished using a display that doesn't include a complete store.

I see this store setup as basically the same as when car companies will park one of their new models on a street corner or outside a building as a display. The opera house in Toronto has Mercedes-Benz vehicles displayed outside of it. It's basically the same idea.

With vastly different cost structures. The price to display a vehicle outside the opera house is peanuts compared to opening and operating a brick and mortar store front no matter the size. Also MB Canada owns and operates all the dealers so that is a cost they stomached (albeit minor)

Lexus would have to involve the local dealerships, how many sales would the mall stores need to generate to begin turning a profit when you factor in construction and overheads?

The thing about downtown core boutiques is they reach an audience that does not have immediate access to dealerships because of geographical constraints. Malls in affluent areas reads as rich suburbs, and luxury dealerships are dime a dozen in rich suburbs, making this move relatively superfluous.

A small boutique in affluent downtown areas can induce trail easier as there is the potential to pull people in from their jobs or on their way home from work, especially if the dealership is far enough removed from the environment. I find that far more targeted and relevant to Lexus brand positioning then mall rats...

 

[GearHeadPeter]

Thats different then setting up permanent residence in a mall storefront. The shows travel, limited time, its a destination. A storefront in the mall is severely limited in what they can show you, how many vehicles can they fit in an average mall store?

Because they would be Lexus branded you most certainly would be dealing with a salesman as well.

Remember impressions don't equal conversions. In the case of the MT show with 100K visitors, those are TARGETED visitors, quite distinct from mother and daughter shopping for socks happen to pick up a brochure...

I would have to agree with the logic you provided about having Lexus in Malls, and still dealing with a car salesperson. Ford tried it in a mall close to me, and it was there for about a year, and closed up, but it did get itself out in front of people who normally would not be specifically looking for a car as they shopped for socks.

Now the impressions part I would have to disagree with you as I'm a conversion. Yes, my wife drives a Lexus, in part because I was tried of my German car breaking down all the time. When I saw how she/we were treated when we took her car in for service it made me realize I want to be treated like that also. When it was time for a new car I chose Lexus in part because of the impression they made upon me on how they treated us as clients, which is way different then GM and Ford does, and the reliability of Lexus is great.

 

[DCRH]

Although for Lexus it might be a total flop, with the kind of money they have (Leuxs/Toyota), I guess it won't be much of a loss to them, more so for testing the waters I guess.

But being a luxury brand thats more affordable than others... who knows, maybe this might be a good thing for them

 

[spoonful]

Although for Lexus it might be a total flop, with the kind of money they have (Leuxs/Toyota), I guess it won't be much of a loss to them, more so for testing the waters I guess.

But being a luxury brand thats more affordable than others... who knows, maybe this might be a good thing for them

Well speaking of affordable its not Lexus who is stooping below the $30K threshold

 

[Ross]

Spoonful has a good point about that whole $30k pricing.
I've been in the loop about Lexus models for some time now and have yet to hear anything about them aiming that low in price.
Maybe they will, maybe they won't.