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Termed ‘Retail of the Future’ (ROTF), the Direct to Customer (D2C) model is introduced by Mercedes Benz India with four key fundamental changes and ROTF will be implemented in India from Q4 2021 onwards:
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
According to this new business model, Mercedes-Benz India will own the entire stock of cars, sell them via appointed Franchise Partners/Dealers, 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 customer contacts, developing the market, and facilitating the sale of Mercedes-Benz cars. The ROTF model promises to be a beneficial proposition for customers, Franchise Partners, and the brand, with the advent of digitization and changing dynamics of the retail business the 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 that is sustainable, empowering, and digital. The advent of a new sales channel has 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
ROTF business model is applicable only for the 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
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