Its official dealers are telling us that the reduction in vat is having little or no affect on increasing new car sales. Buyers are confused by what it means to them and see vat as a state fine and not anything to do with real discounts. Throughout history the makeup of car sales has been about great discounts and special offers, gimmicks rarely work. If you can show a customer a real genuine financial offer they can make a considered choice and if it feels right they will often do it even if the car could be bought cheaper elsewhere. High street supermarket retailers are the very best at this with constant buy one get one free offers which may not be the reason a customer goes to the store but will often look too good to turn down. It is reckoned that major supermarkets lose money or certainly don’t make any money on everyday items such as bread, tea, coffee and sugar, but these loss leaders bring customers into the store where they will often purchase more items which are very profitable. The thinking being that by drawing buyers in with great offers the aesthetics and bargains they find in store will encourage them to spend more. That certainly seems to be borne out when you consider that when you go to a supermarket to buy maybe just tea bags and milk you invariably end up picking up a few more items that have appealed to you whilst looking for them. The shelf position of many products and the way they are displayed will be critical for stores to entice customers to spend more and these ‘hot spots’ are the places where stores will make the biggest profits and sell large volumes. If this were not the case then would stores just place the high volume essentials such as tea, coffee, milk, sugar and bread at the very front of the store by the entrance, so buyers could get exactly what they want and then just leave?
Although “buy one get one free” has been seen in certain car showrooms it is still met by many car buyers with suspicion. Either a car dealer is making way too much money from a car that he can afford to give another away free (unlikely) or the model is just not selling so must therefore be unpopular so why would a customer want to buy it? Car showrooms and used car displays are similar to supermarkets in one way and that is the idea of positioning cars in certain spots which are guaranteed to arouse interest and usually the cars that go onto these positions are the best sellers or where the most profit to be made. This is much the same as your local supermarket, where the most profitable items are usually positioned in the eye-line of customers thereby encouraging them to put them in their basket.
The best car displays are the ones where the cars are prepared and presented to the highest standards and with a mixture of colours and models. It is no secret that buyers will choose certain cars because of the way they are presented. It’s nuts and bolts marketing and the old adage is as true today as it has always been – ‘retail is detail’.