Pulse.ng logo
Go

Finance We visited a Tesla showroom and a Mercedes-Benz dealership — here are the biggest differences between the two (TSLA)

  • Published:

The Tesla store and Mercedes-Benz dealership revealed a generational divide in their sales models.

Tesla's Model S play

Tesla's Model S

(Mark Matousek / Business Insider)

  • I visited a Tesla showroom and Mercedes-Benz dealership in New York City to observe the differences between their sales models.
  • Tesla's store used innovative design strategies and revealed an eagerness to sell a vision of the brand beyond its vehicles.
  • The Mercedes-Benz dealership took a more traditional, less expansive approach to selling cars and its brand.

As established automakers move toward electrification, Tesla will compete more directly with traditional luxury brands like Audi, BMW, and Mercedes-Benz.

Until now, Tesla has had limited competition in the fully-electric luxury space, but that will change in the next decade as auto companies plan to electrify a larger percentage of their offerings. As that happens, Tesla will have new challenges to face, and the viability of its unique sales model will become clearer.

Unlike most auto companies, Tesla sells its cars to consumers directly, rather than licensing its brand to independent dealerships. That gives Tesla more control over how it presents its vehicles and interacts with customers over time, but it would also make it more difficult and costly to achieve the kind of scale some of its competitors have. And Tesla has fought legal battles for the right to sell its vehicles directly to consumers in some states, like Connecticut and New Mexico, where it's currently prohibited from doing so.

Tesla's stores also look different than traditional car dealerships, using minimalist designs that echo innovative retail companies like Apple and Warby Parker. Tesla's stores could end up influencing how other auto companies sell their cars — or remain high-profile outliers.

I visited a Tesla showroom and Mercedes-Benz dealership in New York City to see the differences between how a relatively new and established luxury brand sell their cars. My time in each revealed contrasting sales models that spoke to the fundamental differences between Tesla and some of its competitors.

Here's what I saw.

I started at Tesla's store in Manhattan's Meatpacking District.

I started at Tesla's store in Manhattan's Meatpacking District. play

I started at Tesla's store in Manhattan's Meatpacking District.

(Mark Matousek / Business Insider)


The first thing I noticed was the store's minimalist design philosophy. Like Tesla's cars, the store seemed to emphasize the removal of non-essential visual information.

The first thing I noticed was the store's minimalist design philosophy. Like Tesla's cars, the store seemed to emphasize the removal of non-essential visual information. play

The first thing I noticed was the store's minimalist design philosophy. Like Tesla's cars, the store seemed to emphasize the removal of non-essential visual information.

(Mark Matousek / Business Insider)


Because Tesla sells its vehicles directly to customers instead of using independent dealerships, the company has more control over its stores and the way they present the brand to consumers than other automakers do.

Because Tesla sells its vehicles directly to customers instead of using independent dealerships, the company has more control over its stores and the way they present the brand to consumers than other automakers do. play

Because Tesla sells its vehicles directly to customers instead of using independent dealerships, the company has more control over its stores and the way they present the brand to consumers than other automakers do.

(Mark Matousek / Business Insider)


The aesthetic alignment between the store and its products reminded me of an Apple store and highlighted the fact that the store is selling Tesla as a brand as much as its cars and energy products.

A Tesla Model 3 is on display at Tesla's New York City location. play

A Tesla Model 3 is on display at Tesla's New York City location.

(Mark Matousek / Business Insider)


When I first walked in, I was approached by a friendly and outgoing Tesla employee. Her enthusiasm didn't wane when she learned that I wasn't in the market for a car.

When I first walked in, I was approached by a friendly and outgoing Tesla employee. Her enthusiasm didn't wane when she learned that I wasn't in the market for a car. play

When I first walked in, I was approached by a friendly and outgoing Tesla employee. Her enthusiasm didn't wane when she learned that I wasn't in the market for a car.

(Mark Matousek / Business Insider)


She explained Tesla's business model, vehicles, and energy business clearly and concisely.

She explained Tesla's business model, vehicles, and energy business clearly and concisely. play

She explained Tesla's business model, vehicles, and energy business clearly and concisely.

(Mark Matousek / Business Insider)


She and her colleagues reminded me of a hybrid between Apple employees and traditional car salespeople, combining the former's approachability with the latter's extraversion and persistence.

play

(Mark Matousek / Business Insider)


The first employee I spoke with was eager to strike a conversation about Tesla at a moment's notice in a style that blended tech evangelism and product-oriented selling.

The first employee I spoke with was eager to strike a conversation about Tesla at a moment's notice in a style that blended tech evangelism and product-oriented selling. play

The first employee I spoke with was eager to strike a conversation about Tesla at a moment's notice in a style that blended tech evangelism and product-oriented selling.

(Mark Matousek / Business Insider)


While the Tesla store doesn't have any cars on the lot for those who want to drive home with one, there are cars available for a test drive.

While the Tesla store doesn't have any cars on the lot for those who want to drive home with one, there are cars available for a test drive. play

While the Tesla store doesn't have any cars on the lot for those who want to drive home with one, there are cars available for a test drive.

(Mark Matousek / Business Insider)


You can evaluate your options through the store's digital "design studio."

You can evaluate your options through the store's digital "design studio." play

You can evaluate your options through the store's digital "design studio."

(Mark Matousek / Business Insider)


And if you'd like to buy a Tesla vehicle, an employee can guide you through the process at one of the store's computers.

And if you'd like to buy a Tesla vehicle, an employee can guide you through the process at one of the store's computers. play

And if you'd like to buy a Tesla vehicle, an employee can guide you through the process at one of the store's computers.

(Mark Matousek / Business Insider)


Overall, the store reinforced Tesla's aesthetic identity and showed how the convergence of the auto and tech industries might influence the way cars are sold.

Overall, the store reinforced Tesla's aesthetic identity and showed how the convergence of the auto and tech industries might influence the way cars are sold. play

Overall, the store reinforced Tesla's aesthetic identity and showed how the convergence of the auto and tech industries might influence the way cars are sold.

(Mark Matousek / Business Insider)


Even the barista's station is clean and stylish.

Even the barista's station is clean and stylish. play

Even the barista's station is clean and stylish.

(Mark Matousek / Business Insider)


I went to the Mercedes-Benz dealership in Hell's Kitchen next.

I went to the Mercedes-Benz dealership in Hell's Kitchen next. play

I went to the Mercedes-Benz dealership in Hell's Kitchen next.

(Mark Matousek / Business Insider)


Immediately, it resembles a more traditional dealership.

Immediately, it resembles a more traditional dealership. play

Immediately, it resembles a more traditional dealership.

(Mark Matousek / Business Insider)


There are more cars on display (which, of course, is a function of the fact that Mercedes-Benz sells far more models than Tesla).

There are more cars on display (which, of course, is a function of the fact that Mercedes-Benz sells far more models than Tesla). play

There are more cars on display (which, of course, is a function of the fact that Mercedes-Benz sells far more models than Tesla).

(Mark Matousek / Business Insider)


Though the brand sets some of its more high-end models, like this GT C Roadster, apart from the other cars.

Though the brand sets some of its more high-end models, like this GT C Roadster, apart from the other cars. play

Though the brand sets some of its more high-end models, like this GT C Roadster, apart from the other cars.

(Mark Matousek / Business Insider)


Visitors can use this installation to examine digital versions of the brand's vehicles and read slides about the brand's history.

Visitors can use this installation to examine digital versions of the brand's vehicles and read slides about the brand's history. play

Visitors can use this installation to examine digital versions of the brand's vehicles and read slides about the brand's history.

(Mark Matousek / Business Insider)


Open-air desks are arranged throughout the dealership and separated by rows of cars.

Open-air desks are arranged throughout the dealership and separated by rows of cars. play

Open-air desks are arranged throughout the dealership and separated by rows of cars.

(Mark Matousek / Business Insider)


The lounge area also resembles that of a traditional dealership.

The lounge area also resembles that of a traditional dealership. play

The lounge area also resembles that of a traditional dealership.

(Mark Matousek / Business Insider)


On the lower floor, a shop sells Mercedes-Benz branded merchandise.

On the lower floor, a shop sells Mercedes-Benz branded merchandise. play

On the lower floor, a shop sells Mercedes-Benz branded merchandise.

(Mark Matousek / Business Insider)


In contrast to my time at the Tesla store, I wasn't asked if I needed help for over ten minutes. Once I replied that I didn't, I wasn't approached for the rest of my time in the dealership.

In contrast to my time at the Tesla store, I wasn't asked if I needed help for over ten minutes. Once I replied that I didn't, I wasn't approached for the rest of my time in the dealership. play

In contrast to my time at the Tesla store, I wasn't asked if I needed help for over ten minutes. Once I replied that I didn't, I wasn't approached for the rest of my time in the dealership.

(Mark Matousek / Business Insider)


That wasn't a bad thing, since nothing about my activity indicated I wanted to buy a car or needed assistance, but it did reveal a key difference between the two brand's sales philosophies.

That wasn't a bad thing, since nothing about my activity indicated I wanted to buy a car or needed assistance, but it did reveal a key difference between the two brand's sales philosophies. play

That wasn't a bad thing, since nothing about my activity indicated I wanted to buy a car or needed assistance, but it did reveal a key difference between the two brand's sales philosophies.

(Mark Matousek / Business Insider)


When it comes to marketing, Mercedes-Benz can rely more on traditional advertising (which Tesla doesn't use) and a reputation built over nearly a century. If you're coming to a Mercedes-Benz dealership, you're likely already familiar with the brand.

When it comes to marketing, Mercedes-Benz can rely more on traditional advertising (which Tesla doesn't use) and a reputation built over nearly a century. If you're coming to a Mercedes-Benz dealership, you're likely already familiar with the brand. play

When it comes to marketing, Mercedes-Benz can rely more on traditional advertising (which Tesla doesn't use) and a reputation built over nearly a century. If you're coming to a Mercedes-Benz dealership, you're likely already familiar with the brand.

(Mark Matousek / Business Insider)


And unlike Tesla, Mercedes-Benz doesn't run an energy business on the side, so the brand has less of a need to sell its vision to people who aren't interested in buying its cars.

And unlike Tesla, Mercedes-Benz doesn't run an energy business on the side, so the brand has less of a need to sell its vision to people who aren't interested in buying its cars. play

And unlike Tesla, Mercedes-Benz doesn't run an energy business on the side, so the brand has less of a need to sell its vision to people who aren't interested in buying its cars.

(Mark Matousek / Business Insider)


The brand's age and the auto industry's reliance on physical retail makes it less necessary for Mercedes-Benz to adopt innovative retail models. It will be interesting to see if that holds true in the coming decades as the auto industry shifts toward electric and self-driving vehicles.

The brand's age and the auto industry's reliance on physical retail makes it less necessary for Mercedes-Benz to adopt innovative retail models. It will be interesting to see if that holds true in the coming decades as the auto industry shifts toward electric and self-driving vehicles. play

The brand's age and the auto industry's reliance on physical retail makes it less necessary for Mercedes-Benz to adopt innovative retail models. It will be interesting to see if that holds true in the coming decades as the auto industry shifts toward electric and self-driving vehicles.

(Mark Matousek / Business Insider)