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Architecture + Branding: Mercedes-Benz gets Wise with smart in North America

1-From watches to cars

The idea was ambitious if not naïve. Take everything known about the automotive business and toss it, because a revolution in mass customization was underway.

In the late 1980s, Nicholas Hayek, CEO of Swatch watch maker SMH, hatched an ingenious idea for a small city car. The small car would be personalized, complete with interchangeable body panels, and was to be manufactured using similar techniques employed to make the relatively inexpensive Swatch watches. The idea would not-too soon become referred to as the “Swatch mobile”.

Eco-sprinter and Eco-speedster, circa 1993 (source: wikipedia)

Initially developed by SMH and Volkswagen in 1991, Volkswagen would later withdraw from the joint venture in 1994. Daimler-Benz stepped into the picture shortly thereafter, and in October of 1998, the smart City-Coupé and City-Cabrio successfully launched in several European countries. Subsequently, the model line expanded to include the fortwo coupe, fortwo cabrio, Crossblade, Crosstown, Roadster, Roadster coupe, and forfour.

smart Crossblade (source: wikipedia)

smart forfour (source: wikipedia)

smart Roadster (source: wikipedia)

After several years of shrinking sales and experiencing significant financial losses, several models were discontinued, and smart now operates under the Mercedes-Benz Cars division of Daimler AG, soldiering on with the fortwo lineup as its only product.

smart fortwo coupe and smart fortwo cabrio (source: wikipedia)

2-Pile’em high, watch’em buy

“Pile’em high, watch’em buy” was a repeatedly used expression when I worked in retail. The simple premise being, bombard the consumer with a visual abundance of product, and it will trigger this instant, euphoric, uncontrollable desire to buy. Maybe it worked for consumable, but no one had tried it quite so literally the way smart did.

Displayed in towering cases like objects of desire, to be admired, coveted, and collected, the architectural identity was quirky, fun and whimsical. It was new, fresh, irreverent, and completely off the wall in automotive retailing. It brought the smart brand into focus and distilled the brand values into a tangible design while being an antithesis to the established way.

smart dealership, Germany (source: headlightmag.com)

smart dealership, Frankfurt, Germany (source: travelpod.com)

Mercedes and smart dealership, Canberra, Australia (source Wikipedia)

However, the counter culture architectural design statement did immeasurable damage to the brand value, taking a serious transaction involving a serious piece of machinery and engineering, and treating it with derision. The architecture did little to enhance or embellish the brand, quite the contrary; it gave the product a bigger hill to climb and did a great disservice to the brand.

The revolutionary automotive idea was hampered by a lack of maturity and restraint, amplified by treating and showcasing the vehicles like toys. Not surprisingly, it was little help that to many critics and consumers alike that the vehicles were very “toy like” in functionality and stature. The resulting damage very well crippled the brand before it gained traction and painted the cars with a “novelty” tag. Cute, but little substance to back up the fashion statement. And yet the price point screamed anything but cute.

smart toy dealership (source: blogspot.com)

3-Preparing for launch

When smart was introduced in North America, it initially launched in Canada, a car market more receptive to smaller vehicles than the United States. The first smart dealership which consisted of a brand exclusive floor area within an existing Mercedes-Benz dealership, opened in Toronto in 2004.

The look and feel of smart was different. Minimalist, bright and white, complete with upscale furnishings, it possessed all the requisite design cues to meld with the Mercedes-Benz image. In addition, dark, rich, black signage with the smart name and logo identified the unique space, inside and out.

Mercedes-Benz and smart dealership, North York, Ontario (source: cityinthetrees.blogspot.com)

The toy trappings were jettisoned for a more upscale approach, and it would be required, as the cars had to be marketed accordingly to justify the required “premium price”.

In the spring of 2005, initial demand was brisk, with several month long waiting lists in major urban areas. However, after the initial first-on-the-block wave, demand tapered significantly, with a noticeable uptick in interest when gas prices spiked in the fall of 2008.

4-R.O.C.K. in the USA

In the spring of 2008, smartUSA started selling in theUnited States, mainly through smart exclusive stores in major urban American markets. The timing could not have been better. Rising gas prices combined with the novelty of the product and its European cachet, had sales taking off like a rocket, and by the end of 2008 smartUSA had sold nearly 25,000 units. Demand was high and wait times were measured in months going into 2009.

smart Center, Bloomfield, Michigan (source: itibitismart)

smart Center, Bloomfield, Michigan (source: prweb.com desrosiers architects)

smart Center, Pewaukee, Wisconsin (source: blogspot.com)

However, by the summer of 2009, as gas prices finally receded, sales began to taper off dramatically. And sales continued to fall, like a rock, with 2010 sales numbering just over 5000 units. In early 2011, after several quarters of dwindling sales, Penske Corporation, the authorized distributor for the smart fortwo through smartUSA, announced that they would relinquish the distribution rights, sales and marketing of the brand back to Mercedes-Benz.

5-Back to the front

On July 01 2011, Mercedes-Benz took back control of the smart brand in the United States and set out to reinvigourate and relaunch the brand. Elevating the awareness of the brand and product portfolio, and building on the established culture were touted as the hallmarks of the turn-around.

Where smart dealerships were once expected to be distinct, separate, or even stand alone showrooms, a more integrated approach was now being sought. Although it is almost unequivocally desirable to have a strong, clear, definite architectural identity for a brand, the narrow product line and the small margins make it competitively challenging for smart. Carving out an area within existing Mercedes-Benz showrooms will make it more expedient to roll out the product into more locations and recast the brand.

Mercedes-Benz and smart Center (source: stidge.com)

Mercedez-Benz and smart Center, Englewood, New Jersey (source: benzelbusch.com)

Mercedes-Benz and smart Center, Chandler, Arizona (source: smartcarofamerica.com)

Mercedes-Benz and smart Center, Seattle (source: mercedessource.com)

Mercedes-Benz and smart Center, San Diego, California (source: timscribbles.com)

The upscale look and feel, along with the more sumptuous brand experience of a Mercedes-Benz dealership could well exceed the minimalist expectations of a typical smart purchaser, which should only aid in the task of moving the metal. It would not be the first attempt Mercedes-Benz had trying to elevate a product above its class. When Mercedes-Benz owned Chrysler, products like the Chrysler 300 and Dodge Magnum proudly stressed their associations with the Mercedes-Benz E-Class from which the platforms were derived. The perceived higher value product/brand was intended to elevate the mass volume products in the minds of the consumers, casting a “Halo effect” over the mass market cars, to the benefit of both brands.

In the case of the smart brand hampered by such a narrow product line, there exists a possibility that poor execution of strategy may lead the brand into relative obscurity within the broad Daimler portfolio. There are nonetheless indications that Mercedes-Benz is intent on making the smart brand relevant again. One such example is the smart For-Us Concept that was unveiled at the 2012 Detroit Auto Show.

smart For-Us Concept (source: Autoblog.com)

A commitment to product renaissance with a nod to the packaging efficiency, unconventional style and whimsical roots provides some indication that smart may still have some fight in it. Fresh product, a clear focus, a concise memorable brand message, and a distinct architectural identity replete with unique brand identifiers should assist in providing this diminutive automotive phenomenon some much needed room to grow.

Disclosure:
All brands and trademarks are property of their respective owners.

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About marc lortie

marc lortie is an Architectural Designer (Technologist) currently based in Ottawa, Ontario (Canada). marc has several years of experience working in Canada and the USA on various projects, including commercial shopping centres, big-box stores, industrial plants, educational facilities, warehouses, storage facilities, intermodal facilities, hotels, offices, and residential developments. marc is a graduate of Carleton University, Algonquin College and La Cite Collegiale.

Discussion

One thought on “Architecture + Branding: Mercedes-Benz gets Wise with smart in North America

  1. smart is a fantastic case history in long term strategy and vision. Very few brands have the guts to invest in great projects. Even Hayek, the “Swatch” co-founder of Smart along Mercedes Benz didn’t believe in the real success of this brand. Smart, when launched, was ahead of its time. Now it can boast a vantage point in experience, marketing strategy and innovation. The others will follow.

    Carlo Muttoni

    Posted by carlo | March 19, 2012, 5:16 am

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