Tire Factory Inc. members have rebranded the vast majority of their 206 stores to the Point S banner at a breakneck pace. And leaders of the Oregon-based cooperative are unveiling new programs with two big hopes: the momentum of current members continues, and more independent tire dealers join their network.
More than 85% of the group’s current members have rebranded or are nearly finished with the process, said Walter Lybeck, CEO of Tire Factory, which joined the global Point S network in June 2015. During the group’s annual dealer meeting in February, Lybeck said the pace that members have adopted the blue and green Point S branding is “way above my expectations.”
Tire Factory tapped its tire vendors for financial support to help dealers rebrand their stores. Each store was eligible for up to $25,000 to help pay for the switch, but most members have invested far more than that in paint, signage and improvements. Collectively, he said dealers have spent $10 million to refresh and enhance 182 stores.
With the bulk of the transition complete, Lybeck said the group is ready to focus on growth, and remains committed to a goal stated a year ago at the group’s annual meeting: for Point S to become the third largest network of independent tire dealers in North America. There’s a similar boom of Point S stores underway in Canada.
Among the newest dealers to join the Point S banner in the U.S. are David’s Discount Point S in Haskell, Okla., and Direct Discount in Stillwater, Okla. What makes those stores especially significant is they come with an existing distribution center. Lybeck said that distribution capacity will allow the group to continue to expand in Oklahoma, and neighboring states. The Point S footprint covers the western half of the U.S., and includes the Dakotas and Oklahoma. Filling in the mid-section of the country with Nebraska, Kansas and Texas, and continuing the march east is the goal. Prospect areas stretch as far as Ohio, Virginia and Georgia and include more than 200 identified active leads.
Improving delivery service was a big concern for dealers in northern California, and Lybeck said the group has purchased trucks to run daily routes to stores in that region. Dealers will have until 5 p.m. to place an order and have it delivered the next day from the Tire Factory warehouse in Portland, Ore. “We’re ready to implement that any day,” Lybeck said.
Bumping up delivery service is just one project on the table. Tire Factory also is developing its own online tire sales system. It’s hired a full-time professional trainer to expand educational offerings through its Point S University portal, and there’s one recruiter fully focused on finding new dealers to bring into the fold. The group also is offering dealers market analysis data specific to their stores and territories.Clint Young, director of sales and business development, outlined another advancement being considered. “We’re looking at using telematics to help the tire buying decision.” If a consumer came to a Point S dealer for an oil change, and the technician noticed the vehicle is a few months away from needing tires, Young said there’s a tool that can be plugged into the vehicle’s Onboard Diagnostics II port that will identify the kind of surfaces a vehicle travels. When the consumer returns and is ready to purchase tires, the dealer can offer a specific recommendation based on his or her driving habits.
But with every improvement, leaders said the group remains committed to its core focus — the independent dealer.
“We’re going to be consistently independent,” said Eric Gill, owner of 15 stores and chairman of the Tire Factory board of directors.
Dealers are happier
A survey of Point S dealers in 2016 showed a drastic improvement in satisfaction over the previous year, Young said. 2015 was the year Tire Factory announced it was joining Point S, and many members were vocal in their opposition. Twelve dealers ran for election to the board, and the candidates were split 50-50 on whether they supported the move to Point S. In 2015, members’ net promoter score (NPS) of Point S and Tire Factory was -7%. In 2016, it jumped to 41%.
The low score came in a year with a record number of dealers responding to the survey: 71% in 2015. The response was even greater in 2016: 74%.The top tires
Point S dealers in the U.S. purchased about 700,000 tires from Tire Factory warehouses in 2016. Joe Moore, director of merchandising, estimated the group’s total unit sales was “pushing about 1 million tires” in 2016. By sheer numbers, tires from Hankook Tire America Corp. were the most popular, and Moore said units were up 11% in 2016 in large part because of the launch of the Laufenn brand.
The 35% increase in Falken Tire Corp. orders was “almost entirely due to” the availability of one new tire: the WildPeak A/T3W.
Moore told dealers the biggest jump last year was with Nokian Tyres Inc. Nokian revamped its program for Point S, and dealers responded by more than doubling sales of the company’s products in 2016. “You guys knocked it out of the park with Nokian.” ■