Royal Enfield CEO wants to relook firm’s retail business strategy
Looks like Royal Enfield is contemplating revising its retail business to direct-to-consumer model in India, much like Mercedes-Benz.
Over the past year, due to the pandemic, automobile firms have had to rethink they way they sell products and companies have been promoting their online buying platforms to keep sales up.
Royal Enfield too came up with a dedicated application to purchase and even personalise its products. Now, it seems the automotive world is in for another big shift, but with respect to the way firms operate their retail business.
Mercedes-Benz kickstarted the change by coming up with the ‘Retail of the Future’ (ROTF) business model which is set to be implemented in the fourth quarter (Q4) this year.
Through ROTF, the German carmaker will have complete control over the inventory and cost structure, while the dealers would establish and maintain customer contact and help further build the brand.
Customers would benefit from transparency and also avail of best price for Mercedes’ cars , while discounts will be uniform for all, the manufacturer claims.
Royal Enfield seems to have been intrigued by this retail business model, as its CEO, Vinod Dasari, has recently stated that “people want to buy (vehicles) directly from the company, (and get them) delivered straight to home.”
Unlike Mercedes, Royal Enfield is not expected to change its retail business model immediately, for Dasari also added that, in the long run, “we will need to relook at our distribution strategy overall.”
At the end of FY21, the bike manufacturer had 2056 dealerships across 1750 locations in India, of which 1025 were regular showrooms and the rest were ‘studio stores’.
The direct-to-customer Royal Enfield retail business model, if adopted, would mean that the firm’s franchise partners will not go out of business, as Enfield would control the inventory.
Source – Moneycontrol.com