San Diego Union-Tribune (Sunday)
LUXURY LOUNGES
ut: simple auto showrooms. In: the “brand experience center.” Overlooking New York’s Hudson River at the western edge of the meatpacking district is Genesis House, a three-story, 46,000-squarefoot space that includes a lightbox theater, a showroom, a library, a teahouse, a boutique, a cafe, an outdoor deck and a restaurant run by a Michelin-starred chef.
The expansive space — a monument to weathering steel, copper and traditional wood joinery — was designed by architect Euhlo Suh. For someone who wandered in for a latte after trekking the High Line, it might raise the question: What is a Genesis?
“Genesis is a very new brand. We started just five years ago,” said Claudia Marquez, the North American chief operating officer for Genesis, a luxury subbrand from Hyundai, the South Korean auto giant. “You can probably imagine that the cost of this space is very high, but of course it’s worth it. It is the best place for the Genesis brand to express and show to the world — not only New Yorkers but many tourists — what the Genesis brand is all about.”
Genesis House is how the brand makes its pitch to desirable and hard-to-reach consumers, those visiting the trendy boutiques, restaurants, museums and parks in a lively downtown neighborhood.
While reservations are required for the restaurant and the traditional Korean tea ceremony held in the stunning teahouse, the beaded metal curtains draped over the cars in the giant street-level windows are expected to lure in the public.
“Everyone is invited. That’s what we want,” Marquez said. “The more people that actually come into our house, the more people will start talking about the amazing things that we are offering here.”
This isn’t a new idea. Audi opened a temporary brand experience center, the Audi Forum, in midtown New York back in 2006 to showcase its design-forward vehicles as the brand moved upscale to compete more directly with Mercedesbenz and BMW. In 2016, Cadillac signed a 10-year lease on Cadillac House, a 12,000-square-foot space that had a cafe, an art gallery, a revolving fashion pop-up, and a few classic and contemporary cars, on the ground floor of the automaker’s new global headquarters in west Soho. It was part of a long-term project to change consumer perception of the staid brand, though it lasted less than three years before Cadillac’s parent company, General Motors, pulled the plug and recalled the brand to Detroit.
Still, the Genesis space joins a handful of branded automotive experience centers in lower Manhattan. From October until early December, Mercedes sponsored an 8,000-square-foot pop-up space one block north of Genesis House. Just east on 14th Street, Lexus underwrites its threestory, 16,500-square-foot Intersect by Lexus, which contains a cafe, a lounge and a bar, as well as a restaurant that features a rotating chef-in-residence, drawn from kitchens around the world. Downtown, at the Seaport at Pier 17, Lincoln sponsors lifestyle and cultural events that often feature the brand’s array of luxury SUVS. And a bit north on West 26th Street, Lamborghini opened its Lamborghini Lounge, a 5,400square-foot loft, in May.
These are car companies, so all of these spaces are, ultimately, focused on finding new ways to sell more cars. “Car shoppers — especially from the younger generation, Gen Z and millennials — are looking for more personalized and immersive experiences so they can truly experience the vehicle itself,” said Jessica Stafford, senior vice president for consumer solutions at Kelley Blue Book, an automotive research company.
Whether online or in person, consumers desire a low-pressure environment, absent a pushy salesperson. “They want to be able to touch, feel, look at and experience the vehicle itself without the hard sell right off the bat,” Stafford said. In fact, according to Kelley data, consumer satisfaction with car shopping has reached an all-time high in recent years, as the pandemic shifted more of the experience away from dealerships, digitally or elsewhere.
Each site has a specific goal.
Mercedes is spotlighting its new EQS luxury sedan, the first fully battery-powered production vehicle the brand sells in the United States. The focus is on demystifying the electric car lifestyle, with large interactive displays on charging and range.
“So many people hesitate to make the jump to electric,” said Monique Harrison, Mercedes’ North American head of brand marketing. “But that’s because we haven’t really educated them yet on how easy it really is to own an electric vehicle.”
Lexus’ space is the least car-centric. There are no contemporary Lexus vehicles; instead, the richly welcoming space is meant to showcase core brand virtues. These include “omotenashi,” which Lexus describes as “an unwavering commitment to exceptional hospitality,” as well as “takumi” craftsmanship, “a quintessentially Japanese term translating roughly to artisan.”
It also provides visitors a more encompassing array of experiences, similar to Aston Martin’s forays into interior design or Ferrari’s latest venture in haute fashion.
Lincoln’s engagement at the Seaport is mainly a means to cross paths with an elusive target audience. “Lincoln has been around for over 100 years,” said Michael Sprague, Lincoln’s North American director of marketing, sales and service.
“The boomer generation has a very ingrained idea of the Lincoln brand, whereas the millennial generation is not familiar with us at all.”
Lincoln arranges test drives from the site and uses surveys to gauge shifts in perception. “We’re trying to show up in a new way to new people,” Sprague said.
Lamborghini, on the other hand, is decidedly not seeking this kind of incidental interaction in its lounge. “The space is invite-only,” said Andrea Baldi, the brand’s CEO for the Americas.
Clients can use the Lamborghini Lounge as a location to take delivery of their vehicle when it arrives from Italy. The lounge also acts as an ideal site for previewing confidential new vehicles to local reporters, tastemakers or clients without requiring a trip to headquarters in Italy.
But the lounge’s primary function is business. Through its Ad Personam customization service, Lamborghini offers each client the opportunity to personalize a six- or seven-figure vehicle. This “bespoking ” practice can add significantly to the price of a car and reportedly yields profits of as much as 80 percent.
By bringing this process in-house, Lamborghini can expand its offerings and encourage customers to partake of more of them. And because high-end consumers desire — and are willing to pay for — direct access to the brand and its executives, this process significantly enhances percar profit. It is an important consideration for a manufacturer that sold only 7,500 cars globally in 2020, about as many F-150 pickups as Ford sold every 31⁄2 days in the United States alone.
As disparate as these brand experience centers are, they have one more thing in common: They give the automakers more control over shopping, separate from car dealers.
“We tend to see with the higher-end luxury brands, the more exclusive brands that are creating these brand experience centers, that it gives them the chance to own more of the full experience for a consumer,” Stafford said.
Shifting brand perception in a crowded marketplace is not an easy or a one-time action. So in this time of great upheaval in the industry — including electrification and the further digitalization of car buying — car shoppers can expect more of these centers.
“This is not a sprint, it is a marathon,” Marquez of Genesis said. “We know that we are here for a long period of time.”
“They (Gen Z and millennials) want to be able to touch, feel, look at and experience the vehicle itself without the hard sell right off the bat.”
Jessica Stafford
Senior VP for consumer solutions at Kelley Blue Book