The German sports car maker's Destination Porsche retail concept expects to transform its dealerships into part showroom, part experience center and part hangout space. It is a template of how brick-and-mortar retail might flourish in the age of Amazon.
The first Destination Porsche concept store opened March 15 in Palm Springs, Calif. The dealership, owned by indiGO Auto Group, of Houston, was constructed within a year and will be a blueprint for Porsche's retail design language in stores worldwide.
"If we provide a great brand experience, that will keep our customers coming back for more and will drive more prospects to the showroom," Porsche Cars North America COO Joe Lawrence told Automotive News.
Lawrence called the redesign a "transformation of the concept of the dealership from not just a place to transact business, but a place that you would want to come in and soak up Porsche culture."
It's a retail strategy that sells the product by first selling the lifestyle.
Just as Apple hosts workshops and community events in its stores, next-generation Porsche stores will invite customers and brand enthusiasts to come in to watch a Formula E race on a big screen, or play host to a Porsche Club event."We're not just competing with car dealerships," indiGO Auto Group CEO Todd Blue said. "We're trying to get people away from their computer screens in their home and give them a reason to come in the store."Porscheplatz
Destination Porsche is meant to showcase the brand's broadening vehicle portfolio. The 45,000-square-foot Porsche Palm Springs store is designed around individual content areas that offer visitors a deep dive into various Porsche models. The store features an E-Performance section that highlights electric powertrain technologies and charging infrastructure. Another section features vintage Porsches and showcases the company's growing classic restoration business.
"We've expanded our model lineup, and we're moving into new areas with new target groups," Lawrence said, noting the Panamera four-door and Macan crossover. "So we've got different audiences and different products to show off with very different elements."Porsche is betting big on electric vehicles. The automaker expects about half of its portfolio to be electrified by 2025 and will launch its first battery-electric sedan, the Taycan, this year.
The new retail look extends to the exterior. The store's aluminum facade opens in some areas, offering a peek inside the facility. The aluminum panels above the main entrance and red LED lighting resemble the rear lighting effect on the Porsche 911.
The concept also focuses on "community building" around the brand. The Palm Springs store includes a Porscheplatz lounge and cafe open to customers and Porsche enthusiasts. A Werk 1 lounge on the second floor provides event space for Porsche clubs.
Equipped with 13 high-definition screens, the store will host viewing parties for motorsports and Porsche-related events. "It is more House of Blues than it is car dealership," Blue said.
Big investments
Porsche did not say how much a Destination Porsche redesign might cost. Blue declined to say how much he invested in the Palm Springs store, noting his costs were atypical because it was a prototype.
"Porsche learned from our store what to cut and what to keep and how to build more efficiently," Blue said.
Factoring in tweaks to the design, Blue estimates that the next-gen Porsche stores could cost up to 10 percent more per square foot to build than the brand's newest stores.
But getting dealers to step up to the new look could take awhile.
Porsche's last design refresh, referred to internally as Generation 4, was rolled out to U.S. dealers in 2013, when the auto industry was in the midst of a business rally from the crash of 2009. The Generation 5 design arrives as dealers grapple with rising interest rates, shrinking new-vehicle margins and anemic sales forecasts.
Dealer profitability for luxury brands was down 4.3 percent last year, compared with a 2.6 percent decline for the overall industry, according to the National Automobile Dealers Association.
Most of Porsche's 191 U.S. stores are updated to the Gen 4 standard, leaving dealers to now consider another upgrade.
"I don't like that some manufacturers come to dealers to build buildings without new innovation," Blue said. "At the same time, dealers cannot expect to woo customers with tired, worn-out buildings."
Porsche said it will work with individual dealerships on the timing of the upgrade, based on market size, sales volume and when the store was last updated. The automaker expects the new design to roll out across its retail network over a decade.
"Dealer profitability is always at the forefront of our mind," Lawrence said. "We want to be reasonable with our dealer partners. Many of them have just invested in beautiful facilities with the current design concept. We are certainly not asking them to upturn that overnight."
Selling dealers on a major store update will hinge on consumer confidence and brand performance, said Chris Sutton, vice president of J.D. Power's U.S. automotive retail practice. "If it's been awhile since the last store update, and the automaker has new models, new segments, new customers, then it's probably an appropriate ask," Sutton said.
