Mercedes-Benz India, the country’s largest luxury car maker, today announced a fundamental transition in its retail business in India, by shifting to the futuristic and more customer centric ‘direct to customer’ model, called ‘Retail of the Future’ (ROTF). According to this new business model, Mercedes-Benz India will own the entire stock of cars, sell them via appointed Franchise Partners, invoice the new cars to the customers directly, process the order and fulfill them, offering one transparent price and purchasing experience for customers.
The primary roles and responsibilities of the Mercedes-Benz Franchise Partners include establishing and maintaining of customer contacts, development of the market and facilitating the sale of Mercedes-Benz cars. The customer oriented and futuristic ROTF model promises to be a beneficial proposition for customers, Franchise Partners and the brand, with the advent of digitization and changing dynamics of retail business world over.
Announcing this industry first ‘direct to customer’ model in India, Mr. Martin Schwenk, Managing Director and CEO, Mercedes-Benz India commented,
“Reimagine Excellence is our motto for 2021, and a key reason for introducing Retail of the Future is to create an enhanced luxury buying experience for our customers. This long-term strategic move will strengthen our customer focus by introducing a fundamental transition in the retail business in the market. It also will deliver a win-win solution for both customers and Franchise Partners, underscoring our clear vision for a future which is sustainable, empowering and digital. The advent of new sales channel have brought sweeping changes in customers’ aspirations and requirements, and being a customer obsessed brand, we have adapted our current business models to meet our customers’ aspirations and needs. Retail of the Future is yet another pioneering effort from Mercedes-Benz for Indian customers.”
“Introducing Retail of the Future is a firm step towards establishing an ecosystem that is customer obsessed. It empowers customers to have a hassle-free and completely transparent customer journey, experienced never before. We are also glad to have the collaboration of our Franchise Partners in this transition, further empowering them to have significantly less financial and operational risks, resulting in a profitable and sustainable business model. Franchise Partners continue as brand representatives, maintaining their strong connect with customers and striving to offer the best customer experience in the market. It also allows Mercedes-Benz to stay obsessed with customers and remain a future-ready pioneering brand, ahead of the curve,”
elaborated Mr. Schwenk
Changes in effect due to ROTF implementation:
Customers:
- Can avail best price directly from Mercedes-Benz and transparent price comparison across the product range
- Cars will be invoiced directly by MB India and not by Franchise Partners
- A much simplified purchase process which is seamless and hassle-free
Mercedes-Benz Franchise Partners:
- Transitions to ‘direct to customer’ retail partners of MB India for new car sales
- Compensated by MB India directly
- Availability of larger pool of stock cars
- Reduced risk and no inventory
Mercedes-Benz India:
- Responsible for centrally managing the selling price of all new cars
- Responsible for owning and managing the entire stock of new cars
- Responsible for order processing and fulfillment
ROTF is only for new car sales:
ROTF business model is applicable only for sale of new cars. There will be no change in separate business lines including Customer Services, Pre-owned Cars and Accessories business when ROTF will be implemented.
What will not change due to ROTF implementation:
- Cars will be sold via Franchise Partners
- They continue to remain brand representatives in the market
- Responsible for developing customer relationship
- Franchise Partners will be managing operational handling of customer interactions
- Responsible for developing local market requirements
- Franchise partners will continue local retail marketing activities
- Responsible for lead generation and management
- Current showroom infrastructure will continue to remain the same
Highlights
Introduces for the first time in India, an innovative ‘direct to customer’ sales model, offering a better luxury buying experience to customers
Termed ‘Retail of the Future’ (ROTF), the Direct to Customer (D2C) model is a win-win situation for customers, Mercedes-Benz Franchise Partners and MB India
Four key fundamental changes through ROTF:
One Customer, One Price | Offered by Mercedes-Benz India directly via established franchise network and online | Centralized stock now owned by MB India | Centralized ordering and fulfillment now by MB India | Better financial health of Franchise Partners due to lower cost structure and zero inventory
Key customer benefits:
Larger pool for selection of cars available through Mercedes-Benz Franchise Partners, best prices directly from Mercedes-Benz India without having to negotiate, easier price comparison, seamless and simplified purchase process, complete transparency, sale and delivery of cars facilitated though our Franchise Partners, savings of time and effort
Key Mercedes-Benz Franchise Partners benefits:
Better financial health | Zero inventory carrying | No market facing risk | Hassle-free sales process | Improved customer relationship | Focused local market development and growth
- ROTF will be applicable for new car sales. Separate business lines including Customer Service, Pre-Owned cars and allied businesses remain unchanged
- All Franchise Partners of MB India have collaborated in implementing ‘ROTF’ in India, sharing the company’s ‘customer centric’ outlook and co-creating a future ready business model
- ROTF will be implemented in India from Q4 2021 onwards
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