Tesla Shakes up Australian Car Market

Thursday 6 November 2014
Tesla Shakes up Australian Car Market

The Australian Financial Review reported on October 30, 2014 that electric car maker Tesla is seeking retail sites in Australia. This ground-breaking manufacturer and retailer has been selling on-line to Australia, but the intention of opening retail sites is a dramatic step in their investment in this market.

One of the most exciting aspects of Tesla’s announcement is that it intends using the same ground-breaking retail strategy in Australia as it uses in the USA and UK.  That is, rather than finding their showroom on a major highway just outside town as you will with most car retailers clustered together, you will find Tesla’s showroom in a shopping centre.  Whilst Tesla is yet to secure sites, this means you may well see their showroom in shopping centres such as Chadstone in Melbourne and Chatswood in Sydney.

The theory behind traditional car showrooms being located near one another is based on Hotelling’s Law or the Principle of Minimum Differentation (put your location close to your competitors’ and avoid missing out on customers who don’t want to travel to your site).  It’s one of the reasons why we often see fast food restaurants clustered in one area.

The beauty of Tesla’s retail model lies in its preparedness to break with the norm.  When establishing their sales channels many businesses ask themselves “How should we sell our products?”, or worse still, “How do other businesses sell their products?”.  Both questions ignore one of our 8 Rules for Growing a Great Business – Make your products easy to buy (Available for download here ).  Making your products easy to buy requires a change in mindset to ask the question “How do people want to buy our products?”.

Framing the question from the consumer’s point of view and viewing your business from their perspective, gives you a whole new view on how you should sell and where you should sell.   Tesla is breaking the mould and hoping that consumers strolling through a shopping centre looking at clothes and drinking a juice will step into its store and start the journey to buying a car.  Whether or not that succeeds in Australia is yet to be seen, but it will certainly raise brand awareness!