Porsche to create boutique showroom 'Studios'

LOS ANGELES — Porsche is exploring a future beyond the all-in-one dealership as the brand looks to attract the next generation of car buyers.

The sports car maker plans to enlist its U.S. dealers to roll out a boutique retail concept, called Studios, that is less about pushing metal and more about brand-building, Porsche Cars North America CEO Kjell Gruner told Automotive News on the eve of the Los Angeles Auto Show last week.

It's a retail approach being adopted in varying degrees by luxury automakers, including Tesla, Polestar and Mercedes-Benz.

Porsche expects its first U.S. Studio to open early next year in Portland, Ore., followed by a "handful" more in the next few years. Studio locations have opened in Asia and Europe.

The Porsche Studio takes a cue from the Apple Store concept, which is more informational than transactional, to be an avenue for the curious to learn about the company's cars and heritage rather than be sold to.

The Studios will offer bespoke customization kits and brand merchandise. Customers will be able to trick out their 911 in a loungelike experience while sipping on an espresso.

There's also a community component, with space for art installations and exhibitions by local artists.

This format can address new customer needs and bring down investment requirements for dealers, Gruner said.

Unlike sprawling dealerships in suburban auto malls, the planned small footprint Studios are designed for city centers where real estate is limited and expensive.

That model would move the Porsche brand closer to a younger clientele, who flock to fashionable and walkable mixed-use urban neighborhoods. "New target groups ... are not willing to drive a long way to the dealership," Gruner said. "They say, 'Be where I am.' "

The first challenge will be enlisting dealers.

"We're in quite some conversations," Gruner said. "We need dealers to like the concept, find the right spot and then have the investment capabilities."

But some dealers are wary of the model.

Robert DiStanislao, owner of RDS Automotive, which operates a Porsche store in suburban Philadelphia, is concerned that Porsche could be diluting the brand by going after price-conscious younger buyers.

"We're in a beautiful niche spot between Mercedes and Bentley," Di- Stanislao said. "Why are we chasing the downscale business that everybody's knifing themselves over?"

The dealer advises Porsche to remain an aspirational brand and not chase the mainstream.

"Rather than following Tesla, follow Gucci and Louis Vuitton," Di- Stanislao said. "That's a much better business model because if you tell Americans they can't have it, they have to have it."

Persuading dealers to abandon traditional business ways is an "ongoing journey," Gruner said.

Dealers need to sell cars today and make revenue today, the CEO acknowledged. But they also need to invest in educating and engaging new customer groups who might consider the brand tomorrow or the day after.

"You cannot only think about, 'I have to sell something today,' " Gruner said.

Porsche is also rethinking the traditional dealership experience.

While the vehicle-buying process is rapidly moving to the digital realm, brand engagement remains largely an analog experience — one that brick-and-mortar stores are best positioned to deliver.

"The customer doesn't distinguish between a physical experience and a digital experience," said Gruner, Porsche's former global marketing chief.

"They have one experience, and it needs to be emotional. It needs to be seamless. It needs to be convenient."

Gruner, a fan of the Apple Store experience, sees Porsche showrooms evolving into spaces that stoke enthusiasm about the brand and steep fans in its culture.

Just as Apple hosts product classes in its stores, Porsche stores will host Porsche Club get-togethers, Formula E racing watch parties and even yoga classes.

Experiences wrapped around the car make brand advocates of customers, DiStanislao said. "I take my customers to Canada to learn winter driving; I take them on rallies," he said.

But the new way to retail will mean "job roles need to change," Gruner said.

Porsche stores will be staffed with product specialists similar to those at an Apple Store.

The Porsche Pro "is not a salesperson, but they are very knowledgeable, especially about the technology in the car," Gruner said. "There is zero sales pressure."