With 2,800 company-owned stores between them, two of the world’s largest tire makers are making big investments in their retail spaces. They’re experimenting with everything from store design and vehicle check-in procedures to finding the best employee uniforms and coffee machines for customer waiting areas.
And they’re doing it with lab stores.
Goodyear Tire & Rubber Co. and Bridgestone Americas Inc. both are operating retail laboratories. From the consumer’s point of view these shops might look a little different, but they offer all the traditional services, from tire sales to oil changes. Every single detail, right down to the paint color on the wall, is calculated.
“This is going to be a test and learn lab for us,” says Fred Thomas, vice president and general manager of Goodyear’s company-owned stores. Goodyear is testing initiatives inside the store closest to its Akron, Ohio, headquarters. The tire manufacturer has operated a store inside Summit Mall for 54 years, but last month moved from one side of the mall to the other, into a former Firestone Complete Auto Care store.
The entire space was renovated. Walls were knocked down and the floor of the 10-bay shop was dug up and rebuilt. Its muted walls and floors make it look more like an Apple store than a tire shop. And that’s not by accident.
“We’ve actually trailed people on their tire journey with cameras and interviews,” says Thomas. “How did you start your journey? What made you go to that retailer? When you got there what did you like? What didn’t you like?”
Those questions were asked via blind interviews with consumers. Eventually Goodyear revealed itself to those consumers and asked them to visit a Goodyear store. They followed up with more questions. “What do you like? What don’t you like?”
The lessons learned drove every detail in the new Akron-area store. One example: consumers said the bright blue and gold walls looked too harsh, and “a little too ’90s.” Goodyear isn’t abandoning its iconic color scheme, but it’s using those colors as accents. Instead of blue walls, there are blue chairs.
Bridgestone is doing the same kind of analysis at its lab store 400 miles to the west in the Chicago suburb of St. Charles, Ill. Actually, this Firestone Complete Auto Care store is one of seven lab stores operated by Bridgestone Retail Operations LLC. Four of the lab locations fly the Tires Plus flag.
Stu Crum, president of Bridgestone Retail, the arm that controls all 2,200 of the company-owned stores, says the lab stores are an essential part of making the company’s brand a recognized leader in customer service.
“The only way we can put our strategy into action is by changing even the way we present our service and our offering to the public,” Crum says. “That’s what the lab store is about. It’s about learning best practices.”
Bridgestone is wrapping its improvement around a company-wide initiative called Vision 2020. Its goal is to be among the best customer service companies in all sectors of business, and be the top provider in auto care services. (Goodyear has the same goal, of course.) Bridgestone wants to do all of that while also growing its reach. (See sidebar: Bridgestone wants to add at least 800 company-owned stores, page 22). To get there, the company has restructured, eliminating six vice presidents who led different aspects of the business. Now there are two divisions, north and south, 22 regions and 216 smaller geographic areas. Each of those 216 areas is headed by an area manager who oversees eight to 10 stores. “My area managers need to be in the stores every week. You can’t be in the stores if you have 35 stores,” Crum says.
That hands-on approach extends to other parts of the business, too, and it all supports what’s happening at the retail level. The process has helped Bridgestone make two startling discoveries.
One is they had no support system for what Crum calls “our most important teammates,” the tire technicians. Chris Blanchette is leading that charge as director of technical operations and innovation. The company also wasn’t using its database of 34 million customers. “It was just sitting there idle,” says Jeffrey Lack, vice president of marketing and promotions. Bridgestone admits it is playing catch up in that department. The company began putting the database to work during the third quarter of 2015. Here’s just one fact it culled from the data: 9% of Bridgestone’s retail customers represent 42% of its revenue and 47% of its profit. Crum says, “We had to start growing our boss loyalty.” (Bridgestone refers to its customers as “the boss.”) The 9% represents the most loyal customers, those who rely on the company’s stores for every kind of auto service. Lack says the goal is to increase that 9% to 14% by 2020.The two tire makers are focusing on a lot of the same things in their lab stores. Both are running every single vehicle through a check-in system to gauge tire tread depths, alignment and battery life. Goodyear is testing Hunter Engineering Co.’s Quick Check system, while the Firestone store in Chicago is using Bosch Flex Inspect.
In both stores there’s a focus on transparency. The Goodyear store’s 10 bays are separated from the showroom by a glass wall. “Anywhere you stand in our shop you can see what’s happening with your car. You can see what’s happening with the team member that’s working on your car,” Thomas says. “We’re calling this our open kitchen concept.” As the customer waits, Chris Campbell, director of the customer experience for Goodyear retail stores, says Goodyear is focusing on regular interactions. No matter what service is ordered, some member of the team is going to give a customer an update every 20 minutes. “That’s an ongoing cadence until your service is complete,” Campbell says.
There’s not quite as much glass at the 10-bay Firestone store, but both companies are tackling transparency at the sales counter. There’s no long counter in sight in either store. Instead there are individual pods where a team member stands shoulder to shoulder with the consumer. Both have equal viewing access to the computer. Damien Harmon, vice president of operations for Bridgestone Retail, says customers no longer have to wonder what the employee is looking at on the screen. “Here we’re arm and arm. There’s no hidden agenda. You can see the full transparency of what we’re trying to accomplish.”
Goodyear is trying the same approach. “We’ve engineered this so our team cannot get behind the computer,” says Thomas. Consumers expressed doubt about the prices they were quoted and “a lot of folks would tell us they’re gearing up for battle” when they enter the shop.
Bridgestone is aware of that battleground fear, too, so the company is taking its customer service to the curb. A concierge greets each customer as he or she steps out of a vehicle. That team member relays the services the customer needs and escorts the customer indoors. Once the work is done, the concierge walks the customer back to the vehicle and asks about the service experience.
Both companies are trying to put customers at ease, whether it’s by offering them a cold bottle of water or hot cup of coffee to drink, or a comfortable seat with chargers nearby to power up their phones and tablets. Goodyear is even loaning iPads to consumers to use while they wait.Tom Hix manages the Firestone lab store outside Chicago, and his team is seeing results. They’ve gone from 22 to 30 transactions a day, and on the day of grand opening festivities Hix says the team “comfortably worked on 51 cars.” Customer service assessment scores have increased almost nine points in the past year. Network-wide, customer service has gone up 2.26 points in the same time frame.
The key for both Goodyear and Bridgestone is to figure out what’s working in these lab stores, and how to make them work system wide. For Bridgestone, every element has to pass three tests: is it good for the team, good for the customer, and good for the company?
Goodyear says it doesn’t plan to remodel all of its stores to look exactly like its lab store.
“We think there are things in here we can roll out,” Thomas says. “It’s cool. It’s nicer than our typical stores. We’re not going to do this in every store across the country, but we can have everyone greet the customer within 10 seconds. They can talk to the consumer within 20 minutes of when they get in. We’re really focused on the consumer experience more than the physical thing.”
Bridgestone wants to add at least 800 company-owned stores
Last year’s attempt by Bridgestone Retail Operations LLC (BSRO) to acquire Pep Boys – Manny, Moe & Jack wasn’t a random shot at growth. It was one gigantic step to fulfill Bridgestone’s plan to increase its footprint to at least 3,000 tire and service centers in the U.S. One failed deal aside, the company isn’t backing down from its plan to grow.Stu Crum, president of the tire maker’s company-owned stores, says the company is looking to expand its retail reach, which currently includes 2,200 company-owned stores in 48 states. Those stores employ more than 23,000 people and operate under four brands. The largest is Firestone Complete Auto Care, with 1,600 stores, followed by Tires Plus, Hibdon Tires Plus, and Wheel Works.
“We are on a growth journey. You see 2,200 stores but quite frankly our goal is to get to 3,000 to 3,500 stores,” Crum says. “We thought we did that with the purchase of Pep Boys.
“I tell you what, negotiating with Carl Icahn was the most interesting six months of my life. You don’t get to negotiate with people worth $22 billion very often.”
Two months after Pep Boys initially agreed to a purchase by Bridgestone, Icahn ultimately outbid the tire company for the Philadelphia-born chain, paying $18.50 per share, or more than $1 billion for the service chain’s 800 stores.
Crum says he expects BSRO to grow via new store openings, as well as acquisitions. He says there are a “couple” of non-disclosure statements signed already, and that the company will make a couple of acquisition announcements yet this year.
As for organic growth, Crum says Bridgestone is adding 25 new stores in 2016, probably 40 stores in 2017, and as many as 60 or 65 stores each year after that.