Mercedes-Benz India Implements Direct To Customer Sales With ‘Retail Of The Future’ (ROTF) Business Model

German Luxury Carmaker Mercedes-Benz, today implemented the ‘Retail of the Future’ (ROTF) business model, ushering in a fundamental transition in the luxury retail landscape in India. This ‘direct to customer’ model which was first announced in June 2021, was launched after the successful beta testing phase, by Martin Schwenk, Managing Director & CEO and Santosh Iyer, Vice President- Sales & Marketing, Mercedes-Benz India, from the company’s Metro Auto Hangar dealership located in South Mumbai. 

With ‘Retail of the Future’, Mercedes-Benz India will retain the ownership of the entire stock of cars and retail them via appointed Franchise Partners, by invoicing them directly to the customers. Mercedes-Benz will also be responsible for processing and fulfilling the customer orders. With ROTF, there will be one nationally set price by the company, which will be uniform across the country. 

The ROTF model brings a bouquet of industry-first practices, with transparency and customer convenience, aimed towards offering the best customer experience. With ROTF, customers will not have to pay any incidental charges for their purchase anymore. In addition, the customers will now have a direct access to national stock giving them a higher visibility to select their desired products from across markets. Mercedes-Benz also for the first time will now offer the VIN number to the customer even during the order booking stage.      

While launching the ROTF model in India, Martin Schwenk, Managing Director and CEO, Mercedes-Benz India commented, “In June 2021, we announced a disruptive retail business model which is highly customer centric and promised a seamless, Omni channel and transparent experience to our customers. Today, we are proud to implement the ‘Retail of the Future’ in India after successfully establishing a robust digital backbone, which will support this significant transition in our retail business. ROTF is a unique customer centric business model, which caters to the evolving trends of our customers, while empowering our Franchise Partners by significantly reducing their financial and operational risks in the market. ROTF further supports our quest toward creating customer excellence as the Franchise Partners will now solely compete on providing a superlative customer experience.”  

 “With ROTF, we have created a completely unified customer journey experience with many industry-first initiatives to its credit. For the first time in India, there are no incidental or extra charges for the customers. Customers now have a direct access to Mercedes-Benz India’s national stock with a wide variety of inventory choices. ROTF is a step in the right direction in getting closer to our customers, and a result of listening to their wishes and evolving requirements. As the most trusted luxury brand in the country, we have set a new standard in customer centricity, a new benchmark in Franchise Partners’ profitability and introduced a new culture of competing only for the best customer experience.”  Schwenk elaborated. 

The ROTF Business model consists of two online and offline platforms, An offline Sales Transaction System and an online Digital Commerce Platform.

The offline Sales Transaction System (STS) will facilitate 

• Quotation: Utilizing the visibility of the ‘National Stock’ customers can conveniently interface with the franchise partner of their choice for the purchase of a Mercedes-Benz car 
• Order Booking: Customers can book a car by simply paying an amount of INR 50,000 and then the order completion should occur over the next 14 days. For the first time in India, VIN number will be confirmed with order booking thus ensuring complete transparency 
• Order Finalization: An instant e-mail confirmation will be sent once the documents are verified and confirmed with Mercedes-Benz, as the car makes its way to the franchise partner. This process will be followed through end-to-end data security 
• Invoicing: Customers can avail a wide range of payment choices at their fingertips in a smooth and secure environment. Upon payment realization within seven days, the final invoice from Mercedes-Benz will reach the customer
• Handover: The franchise partner will deliver the car at the customer’s doorstep or delivery at the showroom

The online Digital Commercial Platform (DCP), is an online store can enables the customer to book their choice of Mercedes Benz Car themselves.

Unique benefits of DCP: 

• Search from the available stock, with product specifications and a detailed, transparent pricing
• Finance options presented upfront to customers
• Thorough booking process

ROTF is for new car sales only: 

ROTF will be applicable only for new car sales and will not alter the functioning of separate business lines including customer service, pre-owned cars and allied businesses. All Franchise Partners of Mercedes-Benz India have collaborated in implementing ‘ROTF’ in India, sharing the company’s ‘customer centric’ outlook and co-creating a future-ready business model

Mercedes-Benz India: 

• Responsible for selling cars to customers 
• Responsible for centrally managing the selling price of all new cars
• Responsible for owning and managing the entire stock of new cars 
• Responsible for order processing and fulfillment

What does not change due to ROTF:

• Cars delivered only through Franchise Partners
• Franchise Partners continue to remain brand representatives in the market 
• Franchise Partners responsible for developing customer relationship  
• Franchise Partners will be managing operational handling of customer interactions
• Responsible for developing local market requirements 
• Current showroom infrastructure will continue to remain the same