Mercedes plans more pop-up stores to entice new buyers

Mercedes-Benz will open more pop-up stores in the coming year as it experiments with brand environments focused less on pushing metal and more on engaging consumers.

The foray into experiential retail began with one pop-up store late last year in Atlanta, followed by a second store in suburban Miami’s Aventura Mall, and a third location now planned for Chicago’s Michigan Avenue.

Mercedes plans on opening one more store this year and then “doing way more of them, probably focused on new product launches,” said Mercedes-Benz USA CEO Dietmar Exler.

The new A class that arrives in U.S. showrooms this year will be a prime candidate for showcasing, since it is pitched at the younger demographic who might find the Apple Store-influenced pop-ups particularly appealing.

The stores operate typically for about two months and are intended to educate curious mall-goers on the Mercedes brand.

The environment is more laid-back than hard-sell, with a goal of making the brand more approachable and relevant to consumers who might never have considered a Mercedes.

Exler told Automotive News this year that the desire is “connecting with the customers.” That connection is translating to sales.

“We are seeing an appreciable number of people who had not previously considered the brand, but who bought a Mercedes following a visit to the brand stores,” a company spokeswoman said.

Mall shoppers

The concept would find mall shoppers wandering into a store branded with the Mercedes-Benz star. Only a couple of vehicles might be on display, including the GT sports car. There would be Mercedes-Benz-branded accessories to ogle and a chance to take a 3D virtual reality ride.

At the Atlanta pop-up late last year, shoppers even bumped into Exler, who spent time at the Lenox Square store.

“I would just go up there and say, ‘Hello, I’m from Mercedes. How do you like it here?'” Exler recalled. He told visitors he was in sales — which was true, if a bit modest.

The stores offer newcomers a fresh glimpse of Mercedes. The automaker hopes to reach millennial shoppers with its new A-class sedan this year. That vehicle will have a new multimedia system — called the Mercedes-Benz User Experience, or MBUX — with improved displays and speech-recognition capabilities, along with artificial intelligence and predictive learning abilities.

The pop-ups are also a modern twist on a traditional auto show, where consumers are exposed to the product and can experience the technology, without having to make a purchase, said Jeff Aiosa, owner of Mercedes-Benz dealership Carriage House of New London, in Connecticut.

“It’s just about gathering information in a more contemporary space,” said Aiosa, who is also the Mercedes brand representative for the National Automobile Dealers Association.

The pop-up stores don’t sell vehicles. Employees collect email addresses from prospective customers and forward them to dealerships.

“I’m not getting heartburn as long as everything is going through the dealer network,” Aiosa said. “This isn’t the manufacturer competing against the dealers.”

Greg Barnes, a Mercedes-Benz dealer based in Coral Gables, Fla., and chairman of the brand’s dealer advisory board, views the pop-ups as lead generators.

“It’s a nice creative way to get people who might not walk into a Mercedes showroom,” Barnes said. “It’s a good way to draw in the casual mall shopper, who could be converted into a customer.”

The relaxed atmosphere is the antithesis of a typical dealership experience.

“We have many customers who just come through browsing,” Exler said. “And the joy in their visit is because they know we’re not going to sell them a car.”

Where next?

Mercedes is being deliberate in selecting where to expand the concept, opting for upscale locations and geographic diversification.

“We want to be careful in getting in the right locations,” Exler said. “We wouldn’t want to go into a mall that’s 30 miles out a of city center.”

Mercedes chose to keep each store open for about two months because mall traffic starts repeating itself after that, and visitors to the pop-up store trail off a bit.

But Exler stops short of wanting Mercedes to consider the permanent accessory stores that Porsche is introducing in high-end shopping areas.

He says his options are open. “But at the current time, we are not thinking about putting full-time accessory stores throughout the U.S.,” he said. “We have the accessory stores in all our dealerships, and I think that that is a very good solution for us.”

Amy Wilson contributed to this report.

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