Tyre Retailing: Fast Forward
By TA News Bureau:
Tyre retailing and marketing have brilliantly kept pace with the technological upheavals that are happening in global tyre manufacturing process. From online sales and service platforms, where even tyre makers are directly selling products, to innovative dealership and retailing techniques, the landscape is fast changing to pamper the customer
It is a brave new world for tyre retailing industry across the world. Tyre shopping is no more a boring affair that one does only because one has to. The dealer, who is the first post for any tyre company who meets the customer one-to –one, is today the prime factor in the value chain. With the changing needs and moods of the customer, who always remains the king, defining how a tyre must be sold, retailing networks have undergone a magical change in the way they try to attract customers.
Since customer satisfaction is the key phrase every tyre maker repeats untiringly, the retailing sector has now become the most important point of reference after the tyre manufacturing plant. The modus operandi of retailing has undergone revolutionary changes to meet customers’ preference in terms of time, cost as well as efficiency. From online sales to service centres that offer all kinds of comfort and support, not only to the customer but also to his family, tyre retailing today is a statement in style as well as substance.
They are now talking about customer experience while picking up the tyre he wants or getting his tyres serviced. Retailers are focusing their efforts to make tyre shopping an experience for the customer.
Direct and online sales
One of the major changes happening in tyre retailing is that tyre makers themselves are selling their products to customers directly through e-commerce platforms. This may be the starting point of a new trend, but experts say that it will soon expand to become the new normal.
It is Goodyear who first got into direct retailing in the US. Soon Bridgestone Americas and Michelin Americas joined the fray. They are testing the waters now, but generally the prospects are good, they say.
However, there are challenges in online marketing. As competition increases, it could impact margins. Customers can get an overview of tyre price as they visit different websites from the comfort of their homes. They are not dealer-hopping in the city to see where they will get cheaper tyres. This is a challenge online dealers will face.
When more tyre makers enter direct sales, the customer is definitely getting more and easier options. But this is not going to making the regular retailer happy. Tyre companies cannot ignore them totally. This will lead to a tricky situation where the company becomes a competitor to its own designated retailer.
However, there are online retailers who see things differently. The Indian online retailer changemytyre.com, for example.
Considering the fact that India is among the fastest growing automobile and tyre markets in the world, tyre retailing through e-commerce platforms is only catching up with the traditional methods of tyre sales.
“Selling tyres like any other product has its specific challenges, says Ankit Gupta of changemytyre.com. The company has been in the Indian online tyre retailing market for more than three years. “We have certainly seen an uptrend in the number of people who have been replacing tyres through online sales channel. The tyre customer who buys online has evolved and relies on product reviews , product discovery , price discovery and company discovery like any other product category.
According to Gupta, the biggest challenge in selling tyres online has been in providing an end-to-end solutions, i.e. from giving a price to the customer which is competitive till getting a tyre fitted onto the customers’ vehicle. “To be more specific, one of the biggest hurdles experienced by online sellers of tyres has been the product delivery and logistics involved.
“At changemytyre.com, we have been successful on this particular front with our proprietary technology in the form of a tyre dealer specific mobile phone app called the ‘Tyre Retail caddy’ & our unique website interface for the customers looking to buy tyres.
“Together the ‘Tyre Retail Caddy’ mobile app and the ‘changemytyre.com’ mobile website brings in seamless connectivity, starting from a customer selecting a specific tyre and ending with fitment of the tyres at the tyre dealer’s store.”
About the advantages offered to tyre companies, he says: “The advantages offered by changemytyre.com to tyre companies are multifarious, to say the least. Let us give you a few examples of the issues that a tyre manufacturer might come across in the market:
• For any tyre brand the biggest dilemma is; How to showcase their entire range.
• Tyre dealers are always more interested in stocking ‘fast moving SKU’s’ only.
• Some of the ambitious product launches have failed since, they ended up being slotted as slow movers, hence not stocked.
“The advantages that we offer to the tyre brands are:
• We enable the tyre brands to showcase their entire range on changemytyre.com, even the slow moving ones.
• We enable Tyre brands to communicate directly with the consumers, influence the purchase and drive a purchase to their dealer.
• Changemytyre.com is sharp targeted and therefore a cost effective platform built to improve sales for tyre companies, without competing with their existing offline sales channel of tyre dealers. In fact it complements the tyre dealers’ efforts.
About tyre companies themselves getting aggressive on online business, Gupta said: “We feel that it is imperative for tyre companies to show aggression when it comes to online business. This can only have a positive bearing on changemytyre.com’s business. We have been bearing the costs of educating the Indian tyre customer for the last three years, and it’s high time some others joined us in sharing this cost.”
Companies and dealership networks
The offline segment remains the conventional and most common area where dealers are the face of the company. Companies face the challenge of managing and also promoting brands through dealers.
Kazutoshi Oyama, Executive Director, Sales and Marketing, Bridgestone India, says: Bridgestone India boasts of nearly 6000 dealership network, holistically covering 200 cities across tyre segments, making us one of the largest tyre companies with a vast expansion of our dealership network in the country. Our dealers are like our partners in business with whom we envision long term goals and achievements. We believe in being transparent with our channel partners ensuring organised systems and processes and hence maintain healthy relationships with them. Healthy number of customer enquiries for Bridgestone products makes it easier for our dealers to promote our products.
In a price sensitive market like India, where people prefer cheaply priced products dealers also need to push for better margin products.
According to Oyama, Bridgestone’s product portfolio caters to the demands of varied customer segments. “We are committed to reach out to our customers with quality tyres and services. A recent example is our Firestone launch in 2016, which is targeted for our value seeking customer base. Hence, we are able to cater to the requirements of all customer segments as well as ensure reasonable profit margins to our dealers.”
In the retail business the challenge is to create awareness among customers about different product offerings, says Oyama. “Tyres are not aspirational products and hence customers have limited knowledge and awareness regarding the importance of tyres. Our effort is also in educating customers to understand their tyre needs and opting for correct tyres suitable for their vehicle. Ecopia is one such offering from Bridgestone who is the front runner in fuel-efficient and environmental friendly tyres. The digital revolution has enabled customers to research on different tyre products at the same time providing us a platform to create awareness about different products and offerings.
He adds: “We are confident about the increase in online tyre sales owing to the digital revolution in India. Supported by our government’s digital movement, mobile service providers in the country are competitively providing varied offers for internet connectivity facilitating easy access of information for customers holistically. To cater to online tyre demand, Bridgestone India has our e-commerce portal called bookmybridgestonetyre.com for easy selection, payment and fitment of tyres.
“Bridgestone’s family channel stores mainly aim at revolutionizing the tyre buying experience with an ardent focus on safety, reliability and eco-friendliness. As part of our continued and significant growth plan in the Indian market that is underpinned by commitment in providing superior products and experience, Bridgestone India currently has approximately 6000 dealership network nationwide. As part of our aggressive growth plan in the market, we will continue to expand our network to provide quality products and services even to the remote parts of the country. We are also expanding our family channel stores Select, Super Select, Bridgestone Fleet Points and Bridgestone Fleet Point Mobile which offer unique experience of sophistication, progressiveness and enhanced customer experience.”
Tyre companies have huge networks of dealers. Managing them is no easy task. Vikram Malhotra, Marketing Director, JK Tyre & Industries Ltd, says: “Dealers are the point of contact between you and your customers and therefore, are an integral part when selling offline. Managing a huge dealer network can also be daunting at times. For a company with a wide dealer network, it is imperative to establish a relationship with your dealers and reward them for the work they do for your brand. This becomes decisive when winning customer trust.
“At JK Tyre, we invest time in knowing our dealers and acquaint them to the brand vision and guidelines through programmes like ADVANTAGE, for passenger car radial (PCR) dealers and JK STAR, designed for truck tyre dealers.
“Our Steel Wheels and Truck Wheels Centres at multiple locations are a wonderful example of the trust we share with our dealers. These centres are one-stop solutions for tyres, offering a bouquet of services, from sales to fitment and other service requirements. Equipped with state-of-the-art technology for wheel servicing, including computerised wheel alignment, wheel balancing, automated tyre changing, tyre rotation, and air care, all under one roof, these centres convey JK Tyre’s focus on technology. They also stand for the success factor in our dealer network.
The question of price is always a challenge for the automotive sector, especially in India, where customers are sensitive to price, Malhotra says. “However, customers don’t just buy products just because they are cheap. They look for the value the product brings to them. It is then that they make decisions. Added to that is the challenge is the competitiveness of the Indian tyre market, where products are prone to unfair pricing due to middlemen present at every stage of a tyre’s production, from the time a tyre is manufactured to the time it reaches the customer. The GST will take care of a part of this challenge, but that still does not do away with the distortion in caused in the market due to unchecked dumping of cheap low-grade tyres from China. JK Tyre has been advocating the need for an anti-dumping duty to arrest this charge caused by tyres that are not up to the standards.
“From a business perspective, we realise the customer wants options and have established exclusive dealership centres and selling points that cater to the customer’s needs and demands. We also invest a lot in our technology, we have an R&D centre coming up soon. The constant emphasis on innovation is an important driver for our products that are aimed at customers across segments. Moreover, we try and provide options in the same category so all our customers, and even potential ones, get what they want.
According to malhotra, like any other retailing medium, the online retail industry has its own challenges, including product variety and categorisation, pricing and logistics. In case of tyres, the manufacturer needs to take care of fitment and service centres to make online buying experience more comfortable for their customers, he observes.
“Most tyre manufacturers lack in providing a comfortable end-to-end solution to their customers when purchasing online. This has been restricting the full growth of online tyre retail business in India. Right from the delivery of the product to getting the tyre fitted on to customer’s vehicle, the whole experience can be very challenging sometimes if right logistics approach is not applied. Apart from ensuring this, online tyre sellers are under huge pressure of maintaining competitive pricing for their products. We offer attractive discounts, free fitment services and warranty programmes to buyers to address this.
“All these challenges can be overcome if right approach and technology is implemented to organise the huge, diverse and fragmented online retail space. With India moving towards a digital revolution, we are sure the manufacturers will be able to utilize the potential of the online retail market.
Makhotra adds: “The online tyre selling business has not gained as much popularity in India. However, it is expected to grow substantially in the future. With new technology trends coming in, more consumers moving to online buying and increasing popularity of online platforms in Europe and the US, tyre manufacturers are investing in setting up their presence online on different channels to boost their domestic and global sales.
“The shift in buying preferences — from an offline to online — can be attributed to customer convenience in terms of exploring product alternatives and comparing prices. In some cases, customers do complain about missing personal touch, but that is also being replaced by advanced technology offered by online retailers wherein customers can virtually experience their product, compare prices and read their reviews. From the point of view of a manufacturer, one of the greatest benefits online retail industry has to offer is elimination of unnecessary middlemen.
“While some of our products are available online, the team at JK Tyre is continuously exploring different online retail business models in order to increase and strengthen our presence online.”
JK Tyre has evolved as a 360-degree service solutions provider with the biggest tyre selling and after-sale services network in India, which includes 32 Truck Wheels Centres, 240 Steel Wheels, 14 Xpress Wheels Centres and multiple selling points. These centres are equipped with state-of-the-art technology and provide various services, including wheel servicing, computerised wheel alignment, wheel balancing, automated tyre changing, tyre rotation, and air care, all under one roof.
“Going forward, we aim to consolidate our strong presence in the commercial vehicle segment and ensure our foray into other segments, translating into capturing a major market share overall. Our plants all work to capacity and everything has been planned well in advance. We only need to ensure these plans are implemented properly,” he said.
“With increased focus on innovation, technology and our employees, we aim to drive new product launches and product diversification. A multi-tier strategy to cater to various segments ranging from truck and bus radials passenger vehicles to two-wheel rides has helped us stay ahead of the curve in an extremely competitive industry. We will strengthen our channel partnerships and distribution network and build capacity in places that have limited resources. We will engage with global technology experts, enter into projects with international institutions, develop superior value-engineered products, widen the product range to carve out a larger global footprint and enter into enduring relationships with OEMs and raw material suppliers.
“We are enthusiastic about the new GST tax regime and intend to strengthen our supply chain leading to greater efficiencies, lower distribution overheads and optimisation of resources with a faster movement of goods.
“And, of course, we intend to become one of the Top 10 tyre companies in the world and are confident that with our culture, innovation and our people, we will get there,” Malhotra said.