The sales counter just moved. Well, it didn’t “just-move,” it’s been moving. In my early days of selling tires at retail, it all happened in a small area at the store known as the sales floor.
Consumers called or visited the store where the initial details of a potential sale were discussed. Today, the initial discussion is digital. The salesperson at the store had a great deal of control because the product and pricing information resided with the salesperson at the store. Today, there’s plenty of product and pricing information available to the consumer before they call or visit.
In the beginning, the best tire knowledge resided with the salesperson at the store; in other words, the best solutions were in person at a place. Then the internet inserted itself into the process. Currently when most tire shoppers call or visit tire stores, they have done a certain amount of online research. Arguably, however, still today the best sales solution for purchasing tires is the local, knowledgeable salesperson at the store.
That being said, consumers are now buying everything from toilet paper to mattresses to cars online. I ask myself, “Who would buy a mattress online and have it delivered to their door?” Worse than that, “Who would buy a car without sitting in it or driving it first?” Well, the good old days and the good old ways are gone, replaced with new ways and new processes.
Online car sales are “currently” only taking place in a limited number of dealerships. “Currently” only the very largest tire retailers and manufacturers are selling online. However, this trend is going to grow, and independent tire dealers who cannot engage due to costs of development and participation will feel the threat to tire unit sales.
You can bet that major tire retailers and online retailers are working hard to enhance the complete online sales solution. When I stop to think about it, it blows me away to think consumers feel they now have a valid and relevant solution to purchasing tires online without visiting a tire store or speaking to salespeople.The person and the place are being radically affected by advances in online sales technology. It’s not that this hasn’t been predicted or that we haven’t seen it coming, it’s that it’s unfolding. If tire dealers are not prepared, then it leads to further erosion of customer count, tire sales and revenue.
I remember when the clubs arrived and took some market share. I remember when car dealers started getting serious about replacement tires. I remember when tire manufacturers started attempting to sell tires directly. I’ll state the obvious, tire sales drive service sales, and the erosion of tire sales has a real impact on top-line sales and bottom-line profits. Every dollar matters.
Reasons that erosion matters? I have a membership with Costco; they do it right. Like millions of other members, I’ve drunk the Kool-Aid. Every time I go in and out of the store, I walk past the customer service return counter. Costco processes returns at record speeds and in high volume, making their customers happy.
I buy my gas at Costco, top tier gas at the best prices in town, period. They have a sign at the gas island reminding me to get a free air pressure check at the tire department. When I arrive at the tire department, someone greets me and quickly adjusts my tire pressure without complaining. I drive away happy. Permit me to make a prediction, don’t expect to see a stream of Costco’s customers returning to your store complaining about Costco’s service or prices.
When you add up the erosion of tire unit sales from car dealers, clubs, online retailers and others, it’s going to be tough to take another hit.
Tire dealers had no choice in the expansion of clubs, car dealers, etc. However, you do have control over your website and digital relevancy. Consumers want to buy online. They want to get real answers and real value. They want to be in control. They want transparency.
The shift to online sales technology is taking place at an incredible pace. The sales floor is now on the smartphone. Granted, the call or visit to the store is still real and a vital part of the process, but the front-end of the sales process is changing rapidly.
As we continue to explore shifts and threats in the marketplace, it’s important to realize the need for flexibility and change in established paradigms. As consumers continue to purchase more and more items online, such as tires, if we as independent dealers don’t have an e-commerce option, then the best we can hope for is to capture some portion of the sale/service segment, becoming an “installation destination.”
We’ll discuss more specifics next month. Remember this, the fastest growing language in the marketplace is the digital language. Speak it or die! ■
Wayne Williams is president of ExSell Marketing Inc., a “counter intelligence” firm based in La Habra, Calif. He can be reached at firstname.lastname@example.org.
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