Rocky Mountain High

Lexus National Dealer Meeting highlights the opportunities for growth in a rapidly changing luxury retail market 

September 06, 2017

Room with a View -- Jeff Bracken, group vice president and general manager of the Lexus Division, addresses the brand's dealers at their annual national meeting last week.

Lexus’ dealers quite literally had a mountaintop experience last week, gathering in Colorado Springs for their annual national meeting.
 
And what did they see from that scenic location, perched more than 6,000 feet above sea level? A luxury automotive brand that’s leading change while it remains true to its core mission to treat each customer as if they were a guest in their home.
 
“Last year, we began our journey to amazing – to brave, thoughtful and imaginative at every touchpoint,” said Jeff Bracken, group vice president and general manager of the Lexus Division. “Well, this year, it’s time to do just that. It’s time to create amazing. Not just talk about it, but do it.”

Auto Enthusiast -- Yoshihiro Sawa, the new president of Lexus International, told dealers that -- earlier in his career -- he helped design the Toyota MR2 sports car. "Which I still keep in my garage," he said.

Market Forecast: Blue Skies Ahead
 
Before diving into the details, Lexus’ executive team painted a positive picture of the overall luxury market:
 
  • The labor market has tightened
  • Wages are growing
  • Unemployment is down
  • Housing starts are up
  • Equity markets are strong
  • Corporate investment is robust
  • Consumer confidence is at its highest level in 15 years
They were also bullish about the automotive sector of that market, saying industry sales are likely to remain well above 2 million units in the U.S. in each of the next three years. And, that Lexus is on pace to exceed 300,000 vehicles this year.
 
Meanwhile, Yoshihiro Sawa, president of Lexus International, said the brand’s worldwide sales are on track to grow from 644,000 units this year to 725,000 in 2019.


Experience Amazing -- In addition to traditional business sessions, dealers also had the chance to put the new LC (pictured) and LS through their paces.

‘A Challenger Brand’
 
Make no mistake: Lexus is poised for growth – both in terms of its share of the market and the scope of its brand.
 
“We want to remain youthful, vibrant and flexible in our approach to design and not get bogged down in a traditional set of design rules,” Sawa said. “Thinking of ourselves as a lifestyle brand, not just a car company, will help differentiate us from the competition. Developing our cars based on changing lifestyles and trends will keep us on the cutting edge. Because as a challenger brand, that’s where we need to be.”
 
“Akio’s (Toyoda, president of Toyota Motor Corporation) vision for Lexus is to be the best luxury brand in any industry, not just the best automotive brand,” Bracken said. “We aren’t just competing with other car brands. We’re competing with all brands in terms of our customers’ expectations of their experience.”
 
To that end, Lexus dealers got the opportunity to learn from innovative marketers in other fields, such as Jim Stengel, former global marketing officer of Proctor and Gamble; Jenny Fleiss, co-founder of Rent the Runway; Danny Meyer, CEO of Union Square Hospitality Group and owners of numerous award-winning restaurants; and Jeffery Sears, co-founder of Pirch, a luxury lifestyle retailer of high-end appliances and fixtures.
 
They also had a chance to interact with and be inspired by athletes at the nearby U.S. Olympic Training Center, including Paralympic silver medalist John Register.
 
And they were given the opportunity to take a deeper dive on three other core initiatives: an extensive driving/education experience with the new LS and LC; technology/design breakout sessions featuring chief engineers; and a robust expo/product salon that served as an introduction to new products and supporting programs.

Soul Men -- Lexus Product Line Marketing Manager Geoff Partain (right) greets LS Chief Designer Koichi Suga, who led a breakout session titled "The Soul of the Machine: Brave Design/Takumi Craftsmanship."

Personalized Experiences
 
However, the bulk of the business meeting was focused on the tangible steps Lexus is taking to put all of those best practices into action. Heading that list were confidential sneak peeks of future products, including a commitment to “own the Luxury Utility Vehicle segment” that Lexus created when it launched the original RX in 1998.
 
Also critical were ways to couple Lexus’ more passionate and performance-minded vehicles – such as the RC and LC – with more personalized purchase and ownership experiences.
 
A sampling of some initiatives included:
 
  • Early successes of dealers who are pilot-testing Lexus Plus, a program that offers customers a single point of contact as well as negotiation-free prices on vehicles, accessories and services;
  • Formation of a cross-discipline task force to find ways to enhance the online shopping experience;
  • Creation of a Spanish-language version of Lexus.com to better serve that growing demographic;
  • Progress of Lexus’ RC F GT3 motorsports program that aims to rev up the brand’s performance image;
  • Continued investments in engagement marketing in niches like golf, motorsports, cycling, culinary associations, driving events and courtesy drives at Lexus’ luxury hotel partners;
  • More Facebook campaigns, like the “RC Real-Time” 10-hour live broadcast, in which fans voted on car modifications, which Lexus made in real time;
  • A cross-marketing partnership with Marvel Studios, the largest film integration in Lexus’ history, starring the LC with the GS F in supporting roles in next summer’s The Black Panther movie.

Brand Champion -- A year ago, TMC President Akio Toyoda created the Lexus Brand Champion award. It's inaugural winner was Jim Hudson (center), owner of Jim Hudson Lexus in Columbia, South Carolina. Celebrating his acheivement are Bob Carter (left), TMNA executive vice president, and Jeff Bracken (right).

"We will never settle for the status quo,” Bracken said. “We’re just not wired that way. The minute we think we’ve reached the top is also the very moment the fall begins.
 
“The dynamics of retailing are changing – rapidly,” he continued. “But it’s important to remember that for Lexus, it all began by keeping it personal. No matter how much our product improves, our winning hand and our unique advantage is the personal experience we create for our guests. So get out there, create some amazing and make it personal!”
 
By Dan Miller
 

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