OEMs Need Dealers for CX Innovation

Rent a huge casino conference center, invite a thousand dealers, introduce several new innovative models and show off electric concept vehicles in Las Vegas, Nevada and you’ve got yourself a party. Don’t forget the drinks. As any good OEM leader will do, José vegas harleyBoisjoli (CEO and President of BRP) presented his vision for the company at the BRP (DOOO) 2020 Dealer business meeting in Las Vegas this month. In addition to sharing product innovations, Boisjoli presented their commitment to customer experience (CX) innovation. CX innovation coupled with new innovative products is what will set brands, the OEMs and their dealers apart in the next three years. It will no longer be sufficient to invest in product innovation without CX innovation for the brands in the automotive, powersports, RV, and marine industries.

Innovation in Electric Mobility

The announcement that BRP was committed to building electric vehicles was not surprising. In Europe, BRP manufactures the Thunder electric racing karts. Failed attempts at the electric vehicle business include the Spyder Hybrid and the Can Am Commander-E. Boisjoli riding an electric motorcycle out on stage was a little surprise.

BRP Concept elect moto
BRP CT1 Electric Motorcycle (Concept Vehicle)

With the long anticipated and highly publicized launch of the Harley Davidson (HOG) LiveWire, this move has raised some eyebrows. The problem with Livewire is simply the high price and lack of customizability and options. Harley likely has a roadmap to bridge the gap between Livewire and the e-bikes. However, BRP may beat them to the punch. The “CT1” is their concept electric motorcycle for both “urban and suburban” riding. The stated goal is to meet customer expectations for both range and price point. Could BRP

Harley Davidson LiveWire Electric Motorcycle

launch an electric motorcycle with the same range and power as the Harley Davidson Livewire (MSRP $29,799) at less than half the cost?

BRP knows that Millennials and Generation Z are attracted to electric urban mobility. Boisjoli emphasized the modularity of the e-vehicle platform design. This is an indicator that an electric motorcycle launch will include several models and configurations as well as customization options through accessories. Can-Am has mastered this modularized vehicle manufacturing model with their line of Can Am Maverick, Commander and Defender side by sides. Although they are “in the early stages”, it is apparent BRP is on to something big.

CX Innovation

Investment in product innovation is the lifeblood of an OEM. However, customer experience innovations may have a more disruptive effect in their respective industries than a steady pipeline of exciting new models. While standing next to the BRP CT1 Electric Motorcycle, Boisjoli declared, “We are committed to creating the next customer experience.” The holistic buying experience and ownership experience are what will determine the value proposition for products in the digital age we live in.

The passionate OEM leader addressed the changing preferences of consumers. “We need to anticipate our customer will evolve. We all see the trends. Think about phone services, online music or car sharing. Younger generations are happy to pay as they go. And, as you have noticed, many of them have different purchasing habits than their parents do.” Subscription models and omni-channel commerce will be fully adopted by leading OEMs in the next couple years. BRP may be one of the first in the powersports industry to provide both at scale.

Both Polaris and Harley Davidson have ventured onto Amazon. Polaris owns several aftermarket brands that are sold direct-to-consumer by Amazon and fulfilled by Amazon. Harley Davidson sells lifestyle products direct to consumer on Amazon. In a press release last October, Harley Davidson stated, “Amazon offers Harley-Davidson unrivaled access to hundreds of millions of potential new consumers.” These and other OEMs in the automotive, powersports, RV, marine and PTV industries are dipping their toes in the omni-channel ecosystem.

brp dealer
BRP Dealership (brp.com)

OEM multi-channel tests will be scaled to additional channels; with even more products and much higher volumes. Echoing Harley’s Amazon announcement, Boisjoli referred to significant efforts to expand availability of BRP products to “more customers”. A new team at BRP has been created to drive these change efforts called BRPX. “(The BRPX team’s) mandate is innovation beyond the product. Their aim is to come up with experiences and creative new ways to make BRP products accessible to more people.” The unknown is how BRP and other OEMs will marry the digital and physical world.

Cannibalizing dealer aftersales opportunities puts the dealer’s survival and consumer loyalty at risk.  The key for OEMs is to figure out a unified digital and human customer experience that includes value added offerings from their brick and mortar dealerships.

Powersports, RV, marine and even automotive brands are highly experiential. As OEMs increasingly offer products on digital platforms, the direct-to-consumer sales could impair dealer profitability and relevance if they’re not involved or integrated into the process. Cannibalizing dealer aftersales opportunities puts the dealer’s survival and consumer loyalty at risk.  The key for OEMs is to figure out a unified digital and human customer experience that includes value added offerings from their brick and mortar dealerships. A unified hybrid physical and digital approach is the only way to realize a win-win-win (OEM-Dealer-Consumer) scenario. The “next customer experience” that Boisjoli envisions should be a unified omni-channel system of distribution and retail that puts their dealers at the center. Dealers will need to make pivots to ensure their value proposition aligns with hybrid digital and physical purchasing and ownership experiences.

Creating the next customer experience will be even more difficult than disruptive product innovations like the Sea Doo Spark and an electric motorcycle. The OEM that executes will provide a brand experience that delights customers of all generations and disrupts the industries they serve.

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