Radical Retail – Performance in the Retail Model
However, this by no means implies that dealers can sit back and relax. On the contrary: where new sales models are losing momentum, manufacturers are intensifying efforts to optimize the existing model. The strategic question is: How can the key effects and efficiencies of the agency model be transferred into a traditional dealer network—without changing the formal structure?
A central topic is the consistent analysis and optimization of structural costs in retail. Manufacturers know that in a volatile market environment, every avoidable cost burden becomes a risk—for both sides. That is why we are seeing greater involvement in questions of commissions, internal organization, and process design within dealerships. The trend is clearly toward leaner structures, more efficient teams, and clearly defined role profiles. Anyone who wants to succeed in the dealer network today must not only sell but also operate with excellence.
At the same time, one issue repeatedly comes to the forefront: responsibility for inventory. The question of who will bear the economic risk for demo and stock vehicles in the future is currently being renegotiated in several manufacturer organizations. It is conceivable that risk-sharing will change in the future—especially as manufacturers have realized they need to support dealers more in economically turbulent times to stabilize network results. It is a paradigm shift: less formal control through an agency model, but more operational intervention in the existing system.
Another lever is emerging—one that has often been cited as an argument for direct sales or the agency model: data management. Integrating CRM processes across the entire sales chain is also possible within the traditional model. An agency contract is not required to harmonize data flows, increase customer transparency, and unify the customer journey. On the contrary: many manufacturers are only now beginning to fully exploit these potentials within the dealer model.
Another area where I see clear change is pricing. Even though manufacturers cannot set binding end prices for vehicles in the traditional model, the gap between list and transaction prices can still be significantly reduced. Manufacturers are increasingly working to align pricing more closely with real market prices—creating greater transparency. For customers, market orientation improves; for dealers, the pressure for tactical discounting decreases; and for manufacturers, sales management becomes more reliable.
For me, “Radical Retail” describes precisely this development: not a revolution in legal contracts, but a fundamental efficiency reform within the existing system. Manufacturers are not abandoning strategic ambitions—they are merely changing the tools. Instead of a radical system change, the industry is increasingly aiming for radical optimization of the current model.
And that is why it is more important than ever for dealers not to fall into a false sense of security. The coming years will not be easier—but they offer enormous opportunities for those willing to reposition themselves, further develop their organization, and actively shape their role in the market. Radical Retail does not mean regression. It means realignment—and at full speed.
