Hankook Tire America Corp. is offering consumers a $50 rebate on certain purchases of four passenger and light truck tires from May 21 to July 13, 2018.
This year, in order to meet consumers’ changing needs, we will offer another way to purchase Goodyear consumer tires, and this is... online.” With those words, Andy Traicoff, vice president of consumer sales and customer development for Goodyear Tire & Rubber Co., set in motion what was thought to be a paradigm shift in the tire industry.
Goodyear had been testing the concept of selling tires directly to the consumer via its website, goodyear.com, for three years, but made it official at the Goodyear Dealer Conference in Grapevine, Texas, on Jan. 26, 2015. More than two years later, would it be fair to call that a fateful day?
I think you know the answer to that. Goodyear and Michelin North America Inc., the only two tire manufacturers selling tires on their respective websites, have not set the world on fire with online sales. And none of you went out of business because of it.
Don’t get me wrong, it matters. If you didn’t literally get with their programs, you may have had business taken away from you. Or not. If you joined their programs and became a preferred installer, you may have gained business. Or not.
At the time, some dealers considered it a direct attack on their gross sales and profitability, just one more thing the tire manufacturers were taking from them. I can’t blame them.
By selling their tires online, tire companies are competing against you. They can’t say otherwise. However, they also are trying to work with you to lessen the sting. In addition, their reasoning behind selling online — the needs of smartphone-loving millennials require it — is valid.
If your website doesn’t offer your customers the ability to purchase and pay for tires online, at the very least you should be looking into it. Consumer buying habits are changing because of technology. Don’t ignore that, embrace that.
Some of the record 2,140 people attending the Goodyear Dealer Conference were not happy; I know, because I was there. I asked them. Some thought it was a great idea. Some took a wait-and-see aproach, grudgingly jumping on the Goodyear bandwagon knowing they could jump off at any time.
Was Goodyear’s announcement a game changer? It hasn’t been so far.
Here’s my quote at the time: “There is no question in my mind other tire manufacturers will follow suit within the next 24 months.”
It hasn’t happened en masse. I do believe more tire manufacturers will sell tires online, but no one knows when. I commend the tire companies that have chosen not to sell online because they don’t want to compete with their dealers (and, let’s not be naive, potential dealers).
I also don’t blame the companies that have chosen a different path based on sound reasoning.
I do believe more tire manufacturers will sell tires online.
Remember when Michelin decided to take the concept a step further by testing its OnSite concierge service in Raleigh-Durham, N.C.? That would have made Michelin a tire dealer, not just an online seller. The dealers balked. Michelin eventually decided to scrap the idea.
Following Goodyear’s announcement in 2015, one of its dealers was very vocal about the strategy. Charley Gowland, owner of Chabill’s Tire Service LLC in Morgan City, La., sent a letter to MTD outlining his concerns.
“Why in the world would I want to sign on to a program that spells eventual doom to a large part of the profitability of my business?” wrote Gowland, who has spent 50 years of his life in the industry. “In the end, another distribution channel will be established, in a static marketplace, with the loser being the independent tire dealer.”
Like me, Gowland believed other manufacturers would follow suit. Only Michelin did. Ironically, Michelin is Gowland’s largest supplier.
He has softened his viewpoint a bit since then. He has yet to join either program, but believes significant growth in online sales is inevitable.
“Fifteen percent of tire transactions are going to happen online,” he says. “You certainly want to be a part of it, but you don’t want to be a part of that and lose money.
“If they want to be successful and make the 15% happen — and it will happen because the consumer wants it to happen — manufacturers will have to make the programs more helpful and profitable for the dealer.”
Gowland has paid close attention to the programs in the last two years, and has witnessed a change in attitude for the better. When the time is right and he feels he is getting a fair return on his investment, he may just sign up. Until then, his 14-store chain is doing just fine on its own. ■
If you have any questions or comments, please email me at email@example.com.
See more of Bob Ulrich's editorials here:
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