This Father’s Day, some dads might end up with a gift they’ll really use (that is, if their kids happen to have a lot of money lying around).
On Saturday, Tesla Motors, Elon Musk’s Palo Alto-based manufacturer of electric vehicles, will open one of its "galleries" in Nordstrom at The Grove, the Los Angeles retail multiplex owned by billionaire real-estate magnate Rick Caruso. Tesla will feature its Model X SUV inside the boutique-ish, 400-sq. foot outpost, and try to entice Nordstrom shoppers with mix-and-match interior car panel displays, as well as on-site test drives with Tesla employees.
The Tesla gallery will be open at the Nordstrom location—which, among 38 other stores, serves as The Grove’s anchor—through the end of the year, during which time it will serve as a pilot to determine whether the companies want to expand their partnership. "We’re focused on listening to our customers and seeing how they respond to this type of differentiated experience," Nordstrom said in a statement. The upscale retailer operates 121 stores in the U.S. and Canada, in addition to 200 Nordstrom Racks.
"[We’re] bringing Nordstrom customers a Tesla experience, and I think for Nordstrom as well, it’s like, How can we target Tesla’s audience?" says Ganesh Srivats, the luxury carmaker’s vice president of North American sales. Srivats, a former retail exec at the British fashion house Burberry, had worked extensively with Nordstrom in the past and played an instrumental role in setting up the initiative.
Tesla says it is currently in the process of obtaining a sales license for the gallery. Until then, if a customer expresses the desire to make a purchase, Tesla employees must arrange a call between the customer and an off-premises sales associate, direct the customer to the nearest licensed Tesla store (it’s California, so that’d only be five miles west), or to its website, where Tesla accepts a large chunk of its orders and preorders. This process would not be unlike the current maneuvering that Tesla does in states such as Connecticut and Texas, where, due to decades-old franchising laws, its ability to build stores or sell directly to customers is constricted—or banned altogether.
In that context, the Nordstrom partnership is a smart move, as Tesla’s founder and CEO recently surprised investors when he announced plans to sell 500,000 vehicles—which will include its cheaper upcoming sedan, the Model 3—by 2018. To meet that goal, Tesla, which has just 215 storefronts globally, will need to expand its infrastructure for selling and delivering cars to potential buyers, many of whom are unfamiliar with the company’s still-nascent brand and all-electric vehicle technology. Acknowledging the fact that there will surely be a lot of moms and partners shopping at The Grove on Saturday (women play the leading role in 68% of new car purchases), in the larger scope of things Tesla could be offering a glimpse of what its future sales network might look like.
"This kind of innovation is just not going to be possible if we don’t have a direct sales model," Srivats says. "Because ultimately we’re going to be restricted by the dealerships from engaging in the new playful ways that we’re able to do because we own our business."