The fuel crisis may have induced a temporary fondness for public transport, but the car is still King of the Road and the supermarket giants are taking advantage of its popularity. You can now pick up a lease motor in Sainsbury’s and many predict that you will soon be able to buy a brand new car outright with your weekly shop.
This reflects the growing status of supermarket brands and the changing face of supermarkets, as well as consumers’ willingness to try new ways of buying and leasing cars. No longer content with just selling food as a commodity item, supermarkets sell VCRs, computers and now cars. The challenge is on, therefore, for designers to inspire consumers in-store with accessible point-of-sale merchandise to make these larger purchases less intimidating.
Sloane Design Group created the original concept for Sainsbury’s new car-financing service, Drive, which operates through the retailer’s Sainsbury’s Bank division. This enables consumers to buy a new lease car, unseen, direct from the shelf by picking up the boxed paperwork and then the phone. Sloane created a fun stacked box display sandwiched between a set of fake traffic lights highlighting the offer.
Jim Shields, Sloane Design Group marketing director, says: “We created a grocery-style offer in the best ‘pile ’em high’ tradition. The usual image of banks and money lenders is fairly straight-laced, and they don’t enjoy the retail culture supermarkets have perfected. We combined both disciplines and made the financial offer more tangible by giving consumers something physical they could take away with them.”
This design strategy has obviously worked: a Sainsbury’s spokesman confirms enquiries have increased ten-fold since the concept was launched in August.
According to a Tesco spokesman, however, it got there first with a motor scooter offer created last year by its in-house design team. Here, consumers bought a box containing all the relevant paperwork, scanned it in at the checkout with their food and had it delivered to their door. He says it is only a matter of time before the principle is applied to new car purchases.
“The key to selling cars in supermarkets is to come up with a consumer-friendly approach that offers good value for money and service. When that winning formula arrives, we will be the first to use it,” he says.
Paul King, chairman of M&K Design and a former design management head at both Tesco and Woolworths, agrees supermarkets will probably be selling cars in two years. “Once supermarkets start to sell cars outright, rather than just as hire-purchase packages, the cars will sell themselves. They are a tangible product, not just an abstract service, but must still be well promoted in-store.”
He says supermarkets should harness their predominantly well-earned reputations for service and apply it to new ventures. “A few years ago, I would never have imagined supermarkets selling computers. They made the purchase very simple, with minimum paperwork and a hotline number for repairs. This principle can easily be applied to cars.”
But it’s the power of supermarkets’ brands to appeal to consumers that has contributed most to their success in branching out into other retail areas. King says supermarkets such as Sainsbury’s, Asda, Tesco and Safeway have huge buying power. They are strong, reassuring brands to which consumers are loyal, no matter what the purchase.
But despite, or perhaps because of their strong brand names, supermarkets must recognise their limits, argues Jonathan Silver, JBS Design Consultancy managing director. If cars are to become staple supermarket fare along with baked beans and cheese, their brand values must equal those of the supermarket.
He says a traditional family supermarket does not lend itself well to selling cars. “Sainsbury’s is a middle market brand, so I can’t imagine it selling top range cars such as BMW or Mercedes successfully – you can only push a supermarket brand so far. Asda has been very successful with its George clothing brand, which could effectively stand alone. But cars are a different commodity altogether, and are over-stretching brand credibility,” he says.
King agrees brand synergy is vital if supermarkets want to start car dealing. “I would be surprised if supermarkets stocked every model. Specialist brands will continue to stick with specialist dealers, such as Ferrari, because of their experience and shoppers will probably pick up standard family cars.”
But it’s not just brand values that must be right on target. Silver says a car is too complicated a purchase for supermarket shoppers. “There are so many decisions to make when you buy a car – it’s not just deciding what model or colour.” He says this cannot be done in a supermarket environment if it is to work as a self-service offer. It must be simple and consumers must be reassured they can receive service – a hotline number is not enough.
But despite not having a history of motor retailing, supermarkets are still seen by most consumers as more trustworthy than dealers, which are under increasing pressure from supermarkets and on-line dealers to lower their prices. “Dealers cannot match supermarkets’ retail nous and branding,” says King. “Apart from one or two exceptions, they do not have powerful brands and aren’t strong on customer service”.
He says that Internet dealers such as Jamjar.com and Carbusters.com – a non-profit service launched by the Consumers’ Association – are a potential threat to traditional dealers as they are more brand aware, but both are vulnerable if supermarkets succeed in cracking the car market.
Pendragon, one of Britain’s largest car dealers, launched Tins.co.uk in response to demands from consumers for cheaper models. Chairman Peter Vardy says car retailing has come increasingly to resemble the food sector. “The big will get bigger and the small will get smaller. You will end up with the Tescos, Sainsbury’s and Asdas of the car world on the one hand and the corner shops selling more specialised models on the other.”
Few doubt this retail revolution will take place – it’s more a question of when. But supermarkets will do well to use dealers’ expertise in car retail and designers’ creative and commercial nous if they are really to succeed.