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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

November 7, 2011 at 11:39 AM

Tech enticement at Tesla showroom

Computers and software are becoming the most expensive components in a new car.

They’re also a huge part of selling cars for Tesla Motors, which opened its fourth high-concept retail outlet Saturday at Bellevue Square.

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There’s room for a car or two inside the store, on the second floor near the central atrium, between Market Optical and the Clarks shoe store.

Shoppers are likely to end up spending most of their time in the store playing with a series of 42-inch touch-screen displays or they may use a pair of iMacs in cubbies with comfy leather chairs.

You can use the touch-screen “configurators” to design your own Tesla Model S electric sedan, choosing paint and interior colors and options such as a glass roof. When you’ve finished the design, a flicking gesture will project your customized Tesla onto a huge 85-inch display across the back wall of the store.

If you’re serious, a Tesla employee toting an iPad will help you put down a $5,000 deposit on the car, which starts at $57,400 and won’t enter production until 2012. Or you can place your order later on a PC or an iPhone.

But you don’t have to buy anything. Tesla would be happy if you just came to fiddle with the displays, watch its videos or check your email in the store.

“Our goal is not to sell them a car,” said Tesla Vice President George Blankenship. “The goal is to have people feeling comfortable, understand who we are, that we’re here for them, and then this magic thing happens: When the time comes for them to buy a car, they go, ‘That’s the way I want to buy a car. Tesla’s the one I want to buy it from.’ ”

It’s a lot like the laid-back retail approach of Apple, where Blankenship spent six years developing stores as vice president of real estate. Before that he spent 20 years at Gap. He also helped Microsoft develop its new retail stores.

Since joining Tesla in July 2010, Blankenship steered the company toward high-profile, high-traffic locations where you don’t expect to find a car dealer.

It’s a leap into the mainstream for Tesla, which acted more like a tech startup with its first round of stores.

The Palo Alto, Calif., company — led by PayPal veteran Elon Musk since 2004 — opened a handful of gallerylike spaces in hip locations to sell its first model, the $100,000-plus Roadster that entered production in 2008.

In Seattle, it chose a restored brick building in South Lake Union, where it shared space with a pub that regularly fills with workers from nearby Amazon.com and Microsoft offices.

The Seattle space now houses only a service center, and Blankenship said it could be relocated to a more central location with better truck access when the lease is up. The company will then decide whether the familiarity and longevity of the location are more important than a more convenient service facility.

Meanwhile, Tesla plans to double the number of service facilities next year, using heat maps of customer locations to choose sites.

Blankenship said additional Northwest stores are likely. Portland appears to be next in line, and another Seattle store could be added eventually.

But first he’s opening stores in other retail hubs across the country and the globe. Next weekend he’s opening in Chicago, and the week after that it’s Newport Beach, Calif.

The company has the resources to move upscale. Musk’s early backers included the Google founders. Then the company received a federal loan — worth up to $465 million — in 2009, before it went public in June 2010.

Tesla has two prototype Model S sedans that Blankenship is shipping from store to store for the openings.

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The white model shown in Bellevue — with a 17-inch touch-screen display on the dashboard — is to be shipped out Monday and replaced with one of the Roadsters, which are being phased out after an initial run of 2,500 cars. Roadsters are also available for test drives from a special Tesla zone in one of Bellevue Square’s garages — near the Crate & Barrel store — where Tesla owners get special parking spots and may recharge their cars for free.

Blankenship said the first three new-style Tesla stores — in Houston, the Denver area and San Jose, Calif. — drew thousands of visitors on their opening weekends and averaged 7,000 visitors apiece last week.

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The conversion rate is nearly zero for now, with most visitors buying nothing at all.

But Blankenship believes the majority will end up buying a Tesla within 10 years — perhaps a Model S, or the SUV that’s coming next.

Or maybe they’ll just buy a Tesla T-shirt, travel mug or a baby onesie with cute sayings like “Future Tesla Owner.” Blankenship’s favorite onesie says “Zero emissions — almost.”

“It’s still a tribute to everything we want to do, in a onesie,” he said. “We want people to smile, we want them to be happy, we want them to think, ‘Wow, that was different.’ ”

Indeed.

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