Volvo is to cut back on expensive motoring shows and sponsorship, instead preferring to up its internet spend.
Reuters reports "The Swedish carmaker, controlled by China's Geely, will gradually introduce web sales and spend more on digital advertising, it said as it outlined changes to its global marketing strategy on Monday."
Volvo's head of marketing, Alain Visser, said 'Volvo was keen to disrupt the “spray and pray” model that sees carmakers spend vast sums on marketing for — in his view — debatable returns'.
Buyers are increasingly using the internet to research and even buy cars. Volvo sold out 1,927 limited editions of its new XC90 sport utility vehicle in 47 hours purely via its website.
Whilst it's long been known that returns on investment from traditional printed trade media has declined at an alarming rate, this is the first time that the marketing head of a global brand has come out publicly and said that trade shows yield 'debatable returns'.
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Why Volvo's marketing decision is significant to all traditionally marketed companies
http://www.landscapejuice.com/2014/12/why-volvos-marketing-decision...
Perhaps I am just old fashioned, but even when deciding on the car to get we went in looking for an Audi A4 but came away with an Q3! The point is that with the internet it is easy to buy online but many practicalities of choosing still need to be done by physically viewing the product.
The reality of the garden machinery industry is that many dealerships have ageing owners who will be looking to retire over the next 10-15 years and I can see the likes of Stihl, Honda, Husqvarna etc looking closely at the Volvo lead. I know many good dealers in our industry struggle to find buyers because of the experience and capital required to set up, and the car trade must be the same. So for suppliers it is too easy to look longingly at the click and collect model as ideal.
The dealers will need to up their game to prove their worth, not just from a service aspect, but also to encourage consumers to see real value in building relationships with a local supplier. The problem with all mass sales channels is that they gradually erode choice for the consumer. At the moment manufacturers produce a whole range of products for our industry, but some lines we stock in the knowledge that they will only sell one or two a year.
If consumers don't have an actual showroom to visit then gradually these sales will dwindle and be dropped in favour of the quick (and easy) turnover.
Like everyone else I am a keen user of the internet, but the new business model for most of us is still in its infancy and only time will tell what the outcome is likely to be. The Volvo move is an experiment but these things move very quickly and this could represent a defining point for the car trade and many other specialist retailers over the next few years.
I agree with much of what you say Derek.
"The problem with all mass sales channels is that they gradually erode choice for the consumer."
If you take at Amazon as an example, there is so much choice - perhaps even too much choice. The key to selling online is user review via video.
I'm a keen woodworker and I watch Youtube videos for inspiration and to learn new techniques. Big manufacturers such as Festool, Bosch and Powermatic, for example, are giving away big ticket items to popular Youtube video bloggers.
Woodworking tool manufacturers have latched on to the power of video review in a big way. It's easy for a good review, from a respected blogger, to get several hundred thousand views.
The Festool Kapex mitre saw, for example (RRP c£1,200) is a much reviewed piece if kit. If a manufacturer gave one away at a cost of, say, 50% of RRP and the subsequent online review received 100,000 views, that's a marketing cost of just over a penny per view.
Written reviews on Amazon are powerful too.
Youtube is a powerful medium and I think machinery manufacturers will come to use it more and more going forward.
Here's a typical example of a review.
Also..product manufacturers are benefiting directly from reviews that they don't have to pay for.
Woodworkers love to show off their kit and are more than willing to review the latest must-have tool.