The design and layout of your dealership is more important than you might think. It should facilitate exceptional customer service and efficiency, from the showroom to the service department. Remember, the first impression your customer gets when they walk through the door is a lasting one. What message does your dealership design send? Joining us today, is Nicholas Berndt, facilities design and construction director at AMSI to discuss the significant changes in dealership construction, and what you should keep in mind when designing your space.
Jim Fitzpatrick: Nicholas, welcome to CBT News. So glad that you could take the time out of your busy schedule to join us here.
Nicholas Berndt: Thanks for having me, Jim. I appreciate it.
Jim Fitzpatrick: Yeah, sure. So let’s talk about … I know that you’re the facilities and design and construction director for a large auto group and nowadays, it’s all about having the right facility, isn’t it?
Nicholas Berndt: It absolutely is, yeah.
Jim Fitzpatrick: Yeah. The OEM’s demand, and probably more importantly, the consumers want to have an enjoyable experience. Talk to us about some of the hot areas in a dealership design today.
Nicholas Berndt: Well, definitely showroom as well as the exterior of the building. You know, the exterior of the building is the first thing that customers see. It’s typically what grabs the attention from the interstate or wherever your building is placed. So putting a lot of emphasis on the exterior. Showroom is really important as well. There’s a lot of amenities and features in the showroom, finishes that go into it. A lot of things that probably most customers don’t even think about when they’re going into a showroom.
Jim Fitzpatrick: Sure, sure. How much do the OEM’s really play a role? Are they coming to you with the plans and saying, “Here, you don’t have a lot of leeway,” or do you find that they are …
Nicholas Berndt: You know, it really depends on the manufacturer.
Some are definitely more flexible than others. They start out with their prototypical plan, but one thing that we’ve done is really put an emphasis on the operation of the facility and how it flows. And what we do internally is typically put together a schematic plan and then we work with them on what they’re going to require us to do and what we would like to do.
So, some manufacturers are pretty good with the back and forth. Others are pretty particular and they kinda draw a hard line in the sand and say, “This is what we want you to do and you can’t deviate from that.”
Jim Fitzpatrick: Yeah, yeah. I know, imagine coffee shops. I go into some dealerships and they have a Starbucks franchise or a Starbucks in there. Is that an important element to have those kinds of amenities nowadays?
Nicholas Berndt: Yeah. I mean, you want your customers to be comfortable in the store and the reality is, the more time they spend in the store, the more likely they are to spend money and purchase other items, whether it’s service or retail. Maybe a hat, something like that. So you want them to be comfortable and most of our stores were providing that feature, the coffee, free refreshments, even down to danishes and sandwiches. So they have everything they need there and they don’t have to leave.
Jim Fitzpatrick: Sure, sure. It seems as though in the last 15 or 20 years, we’ve seen a shift from having the waiting area of the service drive being over by the service drive in some little … maybe a ten by ten room, with some stale coffee. Now they’ve taken that waiting room and brought it, in many cases, right out to the center of the showroom, or maybe just off the showroom and have it all open, you know. There’s no walls or what have you.
Nicholas Berndt: Yeah, you’re exactly right.
Jim Fitzpatrick: Yeah. What’s the thinking behind that?
Nicholas Berndt: Well, I think a lot of the thought process is allowing those service customers to see the new product line that’s in the showroom. It also gives the store, the people that are running the store, an opportunity to maybe sell a service customer on a new product. Maybe they’re in for a fairly expensive repair, and it’s actually more cost-effective for them to move into a new unit instead of spend the money on the repair.
Jim Fitzpatrick: That’s right.
Nicholas Berndt: The dealer gets a used unit, they sell a new unit, so it’s really important to get that interaction between sales and service.
Jim Fitzpatrick: And then with regard to the service drive, we see service drives that used to be one lane, and now some service drives are six lanes, you know? Talk to us about that.
Nicholas Berndt: I think typically you’re going to see most service lanes around three lanes. Once you get into a higher volume store, four or five, even six lanes, there’s a lot that goes on in the service drive now. Our vehicles are a lot more complicated than they used to be years ago, and they’re also starting to do a lot of diagnostic in the drive itself.
So we’re checking an alignment in the service drive so it’s taking a little bit more time.
Nicholas Berndt: And then you also want to be able to accommodate that Saturday morning rush and have everybody comfortable, get all the cars in the service drive. So yeah, it is becoming larger.
Jim Fitzpatrick: Nowadays, customers are doing so much online as you know, and is there still an importance of having these mutli-million dollar, twenty thousand square foot showrooms and facilities? Is there still an emphasis on that? It seems, you know, you drive by them and you’re like, “What? Why are they going so much on the bricks and mortar when so many people are doing so much of the transaction now online?” And almost using the showroom as kind of a delivery center? Just a place to come get the car.
Nicholas Berndt: Yeah. No, it’s a great question. Obviously we need a place to keep the inventory and my other thought is a vehicle is the second-largest investment most people are going to make.
I find it hard to believe that most people are going to buy a forty or fifty thousand dollar vehicle without coming out and test driving it first. Maybe if they’ve owned the same car two or three times they know exactly what they want, then yeah, it probably becomes that delivery center.
But they also still need a place to service that car after they purchase it as well.
Jim Fitzpatrick: That’s right. That’s right. So how far out do you start to plan the layout of a dealership? I mean, what’s the building expectation of the time that it takes from the time you say, “All right, we bought the property and we’re going to erect a new dealership.” Is that a six month process, or a year, or?
Nicholas Berndt: It takes a little time and every jurisdiction, from the permitting standpoint, is going to be a little different and of course the complexity of the design. Most of the time, you can plan on spending four months in design, another four months in permitting. So we’re eight months before we can even start breaking ground. And then depending on the size of the facility, especially now, the construction market is really busy and trying to find the resources to be able to build the stores. So you’re going to plan on spending another 12 months on your construction. So it could be a 20 to 24 month process from the time you purchase a piece of real estate.
Jim Fitzpatrick: What’s the running average right now to build a dealership, square footage wise?
Nicholas Berndt: If you’re in the domestic brand, I’m going to say you’re probably in the 35 to 45 thousand square feet for a pretty good size, including shop, service drive, showroom. Luxury stores, depending on the market again, can be a little bit smaller than that. And then, you know, we’re also doing some pretty large facilities based on demand. There’s some projects that are upwards of two hundred thousand square feet.
Jim: Geez. That’s incredible.
Nicholas Berndt: It is.
Jim Fitzpatrick: And talk to us about vertical. I know there’s dealers out there that are looking at building a vertical lot now, right?
Nicholas Berndt: Right. Real estate’s getting more expensive and harder to come by, so a lot of projects we’re looking at in urban markets, we’re having to go vertical to be able to have a place for all the inventory. So a lot of times, we’re building parking decks above our shops and even our showrooms.
Jim Fitzpatrick: What are some of the trends you see down the road? I mean, we know what dealerships are looking like now, but you guys are probably in meetings saying, “What are they going to look like in ten or twenty years?” Is there anything that you can share with us to say, “This is kind of what’s coming down the pike?”
Nicholas Berndt: Well, you know, every manufacturer typically comes out with a CI every ten to twelve years, so it’s tough if you’re a group that has a number of brands, just to try and keep up with all the new requirements.
Jim Fitzpatrick: I can imagine.
Nicholas Berndt: And then we also start talking about the EV requirements. So that’s a big investment into the future, not only from a sales standpoint but also from a shop standpoint. All the infrastructure that it requires. I think you’re going to continue to see large stores. I think you’re going to continue to see the open air design and the visibility, but I think you’re also going to start seeing a lot of emphasis put on shops and service.
Jim Fitzpatrick: Nicholas Berndt, I want to thank you so much for joining us on CBT. We really appreciate it.
Nicholas Berndt: Thank you, Jim. Appreciate it.
Jim Fitzpatrick: It’s been great insights and I know our viewers will get a lot out of it. It’s interesting to see and talk about where the showrooms and dealerships of tomorrow are headed. So, thanks so much.
Nicholas Berndt: It’ll be interesting to see. Thank you.
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