Retail 2020 sets vision for future
September 5, 2011
Filed under Features
Harley dealers to benefit from strategy
By Liz Hochstedler
As the third piece in Harley-Davidson’s strategic realignment, the company has begun focusing on its retail side with a vision it calls Retail 2020.
Retail 2020 is not focused simply on a year, company officials say, but rather a vision that will bring Harley-Davidson into the future, with one-, three- and five-year milestones, as well as more goals in the future.
“It’s a multi-channel, overarching view of ‘How do we continue to provide a premium customer experience where the customers are engaged with our brand?’” Rod Copes, senior vice president of sales, said in an interview with Powersports Business.
Harley’s realignment began with a focus on product development before the company concentrated on manufacturing and now on the retail side. The retail vision is targeted at improving the retail experience for customers worldwide.
“It’s looking at that broad-based approach and making sure that all of our channels are integrated and connected, so we can truly give our customers that premium experience,” Copes explained.
The goals of the program are to improve the customer experience with the brand as well as increase dealer profitability.
“The benefit is it drives profitability and customer satisfaction, so that’s what’s in it for dealers — improving profitability for their specific dealership, because we think those two things are really tied together,” Copes said.
Retail 2020 was first announced at the OEM’s dealer meeting in July, though many of the details still have yet to be shared. At the meeting, dealers were allowed to give their feedback and suggest further ideas for the program.
“Overall, they seem like they’ve been pretty receptive to it,” Copes said.
The transition will include Harley’s 1,300 worldwide dealers, its clothing and accessory retailers, as well as its e-commerce site, but the first initiatives have been focused on U.S. dealers. In an aim to improve dealers’ retail experiences, Harley-Davidson first analyzed each U.S. dealership’s current situation. Each was plotted on a graph that Harley officials call a “two-by-two optimization matrix.” Dealer profit lies on the y-axis of the graph, while customer experience sits on the x-axis.
“It’s a tool that we can use with all of our dealers to map out where they really lie within that four-quadrant matrix,” Copes explained.
Once each dealer was plotted onto the graph, detailed action and priority plans were designed for each store, with the goal that each will seek to chart in the top right of the graph, where profit and customer experience are optimal.
“We want dealers to be more profitable and provide a better experience for their customers,” Copes said.
On top of the individual dealer piece, Harley-Davidson is also looking to add new systems and programs into its network — which will include improving customer relationship management capabilities — so the company can proactively provide better products and services.
Also, a new e-commerce site will be launched next summer. Harley will operate it, while sales will be funneled through the dealerships.
“We’ve had an e-commerce solution for over a decade, but it probably has not been consistent with our brand and not as user-friendly,” Copes said.
The new site follows a business model unlike any Copes has ever seen. When a customer orders PG&A, the shopper’s local dealer will get credit for selling the product. And if a customer chooses a free shipping option, the item will be shipped to the dealer’s store. The customer, of course, has to go to the dealership to pick it up, allowing the dealership extra face time with that customer. Dealerships can also advertise the e-commerce site outside their dealership, as they will still be credited with sales.
“A good e-commerce presence increases brick and mortar stores’ sales as well,” Copes said. “It’s a great opportunity for our dealers to benefit from customers engaging.”
The premise of Retail 2020 is based on customer experience. Harley-Davidson wants customers to become more comfortable with and more loyal to its brand. The company believes it already provides an exceptional customer service environment but would like to extrapolate on that.
“What we’re all about is not just selling motorcycles. It’s really providing a unique premium life experience, and we believe it’s been one of our company’s assets. It’s been one of our directions for growth,” Copes said, explaining that customers who are satisfied with their experience become loyal and spend more money.
To create that premium experience, Harley-Davidson will study what customers want now and what they will want in the future, while also being mindful of customers who have regular local dealerships and customers who travel to Harley dealerships as a destination.
“The expectation from customers has really increased over the past decade, of what they expect a company to provide them and how to engage them,” Copes said.
While Retail 2020 is customer led, it focuses primarily on the retailers who interact with the customers more often than the manufacturer.
“Primarily, our dealers are the face to the customer, so I think it is a true commitment to the dealer that we’re going to help them improve and really provide a premium experience across the world,” Copes said.
Each aspect of Retail 2020 is expected to be beneficial for customers, dealers and the manufacturer, or what Copes calls a “triple win,” and dealers are asked to take the vision’s journey in partnership with Harley-Davidson.