Mercedes-Benz India is all set to revolutionise its retail business. The new approach centred around the customer is called ‘Retail Of The Future’ (ROTF). In essence, the company is shifting from a B2B (Business To Business) to a B2C (Business To Customer) model. That, however, will happen in quarter four of this year.

How will it work? Instead of selling stock to dealer-partners, Mercedes-Benz India will maintain the inventory of cars. It will sell them via the appointed dealerships by invoicing the new vehicles directly to customers. In other words, the dealership will become a bridge between the two parties – Mercedes-Benz India (the seller) and the customer.

So, what are the positives of the new retail strategy? First of all, the models will carry one price tag for the entire country. Next, the customers will get to choose from a larger pool of choices, covering variants, colours etc. The buyers can purchase a car via the conventional way, or go online, customise and order directly from Mercedes-Benz India. The latter route will enable customers to also compare prices and, thanks to price transparency, do away with the negotiation tedium. The new ‘direct to customer’ sales model will make the car-buying process much more straightforward.

Even franchise partners stand to gain from this model. Since they won’t have to maintain an inventory, which incurs massive costs, they will be much stronger financially. So, if the market fluctuates, the dealerships won’t have much revenue-related risk. Also, they can invest time and money in delivering improved car buying experiences and focus on developing the market further.

Besides that, the dealerships will continue to offer aftersales services to customers. That, and the pre-owned cars business, will continue to run as they are. Even the showrooms will remain the same.

So, there you have it. Mercedes-Benz India believes that the new approach will change the face of the retail business in the industry. At the moment, all other carmakers are still following the B2B model. Do you think ROTF is the right way forward?