Auto Brand - digital retail platform
Context: Auto Brand is a traditional auto manufacturer who sells through 3rd party dealerships across the country. As disruptor auto brands like Tesla pioneer online auto sales, Auto Brand begins to reassess its traditional dealership sales model
Task: Auto Brand has asked Bain to help them begin to modernize their sales model while managing their dealer network relationships.
Team: 3 working team + manager
Role: Associate Consultant, main driver of Primary Research on dealerships and competitors.
*The project has been significantly simplified to showcase the areas in which I contributed the most—namely, product simplification and online configurator design. This comprises only part of the overall project, and other aspects to which I did not contribute are not included.
the problem;
With the onslaught of disruptors like Tesla, Auto Brand realizes that the future of car sales is online. However, most traditional auto manufacturers are held back from the direct-to-consumer model pioneered by disruptors due to their long-standing dealer networks. Auto Brand wants to be an early adopter of online sales, but it also must maintain its dealer relations.
key questions;
First, we laid out the key differences between traditional, dealer-based sales and disruptor brands’ direct-to-consumer model. From there, we identified key questions that need to be answered on how Auto Brand can play in the future of car sales.
our recommendation;
the case for simplification;
Primary research on inventory levels of local dealers showed that Auto Brand’s costly, wide array of color, trim, and drive combinations were not accessible to a given customer under the build-to-stock model (where vehicles are pre-built, then stocked to various dealers across the country)
In comparison, Tesla’s custom order option ensures all combinations (trim, color, drive, etc.) are available to any customer, even though pre-built inventory is low (few options are available to drive home on the spot)
What’s more, data shows that top dealers tend to have few combinations in stock at any time, suggesting that customers are happy to choose from fewer options.
We recommend Auto Brand reduce complexity, which would decrease inventory and production costs. When coupled with an online customer order option, the options available to customers are no fewer than the number available to a given customer today.
online configurator;
In addition to simplification, we recommend piloting an online configurator for certain key Auto Brand models. A single-model pilot allows for trial and error and minimizes change management needed.
For the key model used for our pilot, we chose an EV model that played in a similar market segment as disruptor brands. The logic is that customers interested in our EV model would likely overlap with those interested in disruptor brands.
The biggest differences in the Online Configurator + Dealership hybrid model is, customers would have the option to customer order a vehicle with their desired specs, or purchase a pre-built vehicle from a dealership. If custom ordering, the vehicle would be delivered directed from the Auto Brand factories to the customer’s home or a selected dealership in a few weeks.
Examples of configurator logic mockups
dealer management;
Given the significant change management required with the launch of the Online Configurator and digital retail platform, Auto Brand should emphasize dealer benefits of the new model to receive buy-in and support.
impact;
After working with us, Auto Brand launched a digital retail platform based on our recommendations, and was among the first traditional auto manufacturers to introduce a hybrid online+dealership sales model.
The project presented on this page has been significantly simplified due to non-disclosure agreements. For more information, please contact Anrui be email.