BMW mall strategy strikingly similar to Tesla

Yesterday it was reported that Tesla Motors (TSLA) set a new company record for the most Model S deliveries (a 55% year over year increase). And, earlier this week it was also reported that the BMW i8 Plug-In Hybrid will double production to meet demand. Is BMW following in Tesla’s footsteps?

Take a look at this (see above). Quietly in the last four months, BMW of North America has opened up the first of what will be many “pop-up” boutiques. Their first is located in Costa Mesa, California's South Coast Plaza, showcasing… you guessed it: the BMW i8. Taking a page out of Tesla’s playbook, BMW chose the South Coast Plaza, an upscale mall location, in the Irvine area (surrounded by high-end boutiques like Louis Vuitton, Tiffany's, Gucci, etc.).

And, we're not surprised BMW is trying this in light of the numbers. At Bellevue Square, a shopping center in an affluent Seattle suburb, Tesla Motors produced sales of $5,500 per square foot last January, more than five times the mall’s average and at a pace the mall’s owners say is likely a U.S. record for any retailer.

It appears that BMW has taken note of this – according to Automotive News*, BMW eventually wants all its nearly 340 US dealers to participate in its new Future Retail program by 2019, where similar showrooms are opened in their respective cities with a total pricetag of $500 million.

While BMW's Future Retail program mirrors much of Tesla’s look, BMW doesn't actually “sell” cars from the South Coast Plaza mall showroom. Instead, shoppers can sign up for test-drives at local BMW dealerships. Nevertheless, the stores themselves are designed in a strikingly similar format to Tesla stores, as BMW has placed an emphasis is on "digital tools and a clean, cool environment" with open space and lots of glass and light.

To showcase the similarities, check out this Tesla store in a Miami mall…


Are the Germans following the retail model of the Silicon Valley “disruptor” in the auto industry? It turns out Mercedes also has a unique “gallery” showroom located next to high-end fashion boutiques on the famed Champs Elysees in Paris. Again, we see similarities to Tesla's approach, check out the video below.


And even Japanese luxury-leader Lexus has gone public stating that, "The model that Tesla has... to open up their outlets in shopping malls is a clever one, (and) I think they’re getting a lot of folks to stop in and learn about Tesla,” admitted Jeff Bracken, Group Vice President-Lexus at Toyota Motor Sales U.S.A., continuing "We’re interested to watch what (Tesla does), how the business model works and what kind of customers wander into their outlets,” he says. “That’s really interesting to us... (If) that’s an outlet that could work for them, then we need to take a look at that to see if that’s something that could make sense for us.”

It looks like Tesla is disrupting more than just automotive engineering… it’s starting to disrupt the auto retail model itself.

*Source/Photos: Automotive News