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Philadelphia Challenge, part II: Boundaries? What boundaries?

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Philadelphia Challenge, part II: Boundaries? What boundaries?

Second of two parts

The city of Philadelphia and the county of Philadelphia are one in the same. Metropolitan Philadelphia, however, encompasses western New Jersey (separated from the city by the Delaware River) and northern Delaware in addition to southeast Pennsylvania.

Tire dealers two counties away can — and do — reach Philadelphia residents with radio and television advertising. The whole metropolitan area is commonly known as the Delaware Valley.

“There are these divisionary lines that don’t hold water,” says Ricky Blatt, owner and service manager of Blatt Tire & Service. His is the closest dealership to the Historic District, also known as the “Old City,” in downtown Philadelphia.

“It’s only a 15 to 20 minute drive to New Jersey. Montgomery County and Philadelphia County are separated by a street. It’s not like areas are separated by the Berlin Wall.”

There is plenty of competition for customers in the area. In this second of a two-part series that began in August, we profile four retailers who have experienced continued success despite ever-changing demographics. Three are from northeast Philadelphia.

Allen Tire & Service uses its wholesale warehousing and strong partnership with the Nexen brand to make a name for itself.

Mayfair Tire & Service Center Inc. out-services everyone in a crowded area of Philadelphia known for its row housing. Bustleton Tire and Service, also known as Bustleton Goodyear, peacefully co-exists with a nearby Sears Auto Center and Pep Boys Supercenter.

And outside of Philadelphia in Berks County, located northwest of Montgomery County, CJ’s Tire & Auto Services has 12 stores going on 150.

“I’m not worried about the big box stores,” says Craig Myers, co-owner of Allen Rubber Co. Inc., which does business as Allen Tire & Service. “They can compete with me on price, but certainly not from a service side or a knowledge side.

“It’s just a job for the guy working at Sears. He might want to do something else with his life. My managers — they’re in it for the long haul.”

Other independent tire dealers are a different story, according to Myers. “They are good competitors. They don’t beat the price into the ground. They don’t sell refrigerators or other products that they can mark up so they can low-ball tires.”

Allen Tire and customer retention

“Northeast Philly is so big, we have two retail stores,” says Myers, who describes the immediate area as blue collar but diverse.

(Only 14 miles away in Camden Count, N.J., Allen Tire has a third store that does business as Trio Tire & Service. It is located in Cherry Hill, a suburban, affluent area.)
One of the Philadelphia stores recently received a Nexen-themed retail makeover, complete with a bay door wrap that makes it look like the store is busy even when the door is closed.

Changing the landscape is one of the ways Allen Tire helps bring potential customers to the store. Myers says the company works very hard to keep them coming back as well.

New customers are surveyed to find out “how you got to us,” he says. The brief “Penny for your thoughts” survey is literally that: Customers receive a penny encased in an

Allen Tire keychain for completing the four question survey:

1. “What brought you to us today?

2. “How did you find us?”

3. “Were there services you needed that we do not offer?”

4. “Do you have any suggestions to help us make your future visits better?”

Every customer also receives a “thank you” note in the mail personally signed by Myers. And each note comes with a $5 off any repair or purchase coupon.

Customers are encouraged to tell their friends about Allen Tire; if one comes in, the existing customer receives a $25 gift card.

“I still think it’s cheaper to invest $25 for a new customer than the amount you would spend on all the advertising and lead generation.”

Allen Rubber Co. was established in 1929. Myers and Brad Goldstein purchased the company in 1982. They have since added two partners: Craig’s son, Wes, and Phil McConnon, vice president of Allen Tire’s wholesale division.

“Since Craig and I came to Allen Rubber, the business has changed dramatically,” says Goldstein. “The recapping has long been discontinued, and all energies are directed toward a major, multi-diverse distribution of various brands of tires.”

In addition to Nexen, Allen Tire’s primary brands are Yokohama, Toyo, Michelin, BFGoodrich, Uniroyal, Toyo, Continental, General and Firestone.

Earlier this year, the company launched its Web store (www.allenrubber.com) powered by Tire Company Solutions Technologies.

“The new Web store will simplify the tire and car care buying process for consumers, making it easy for them to shop online for tires, schedule auto service, or receive an online quote,” says Myers.

[PAGEBREAK]

Who doesn’t like Mayfair Tire?

Customer service is not lip service to the owners of Mayfair Tire and Service in northeast Philadelphia.

Ron and Kenny Hughes and Charles “Chalie” Mirro are equal partners in the business. Ron, who joined the company in 1990 and is now president, says customer service is the key to the business.

“We’re not considered the cheapest, but our pricing is affordable,” he says.

That is even more important as the neighborhood tries to recover from the recession.
The dealership was started in 1986 by Ron and Kenny’s late father, Joe Hughes Sr., and older brother, Joe Jr., who eventually sold his share of the business to Mirro.

“We grew up two blocks away from here,” says Ron. “My dad always walked past this corner and said that it would be a good place for a tire shop.”

Twenty-six years later, it still is, despite a lack of space. Mayfair stocks some 250 tires, specifically the Continental, Goodyear, Dunlop, General and Federal brands. The store relies heavily on nearby wholesalers like Allen Tire to get tires when needed, which is why Ron says all major brands are available.

“It was worse until renovations. We had three bays, now we have five. And we rent a double bay off Ammco Transmission next door. We have a lift over there.

“With the phones always busy and people coming in, there’s always something going on here. I call it the Pat’s Steaks of the automotive and tire business!”
(Pat’s King of Steaks, a Philly mainstay since 1930, is famous for its steak sandwich — with or without Cheez Wiz.)

According to Hughes, the neighborhood unfortunately has changed from upper middle class to middle class on its way to lower middle. Mirro, who grew up in south Philly, says their customers price shop.

“For the most part, people are looking for middle-of-the-road type rubber in this area. They want to think they are getting a good buy for their buck.”

dba Bustleton Goodyear

Eric Russo, co-owner and store manager of Bustleton Tire, agrees that the demographics in northeast Philadelphia are ever changing.

“It’s definitely blue collar. It’s very ethnic now. It’s changing all the time. When I got here, it was more Russian. Now it’s a lot more Asian.”

Near his store, there is a lot of Section 8 housing for families with low or fixed incomes. He describes the area as a “low price market.” He also says his customers are more demanding than in the past, but loyal if they believe they are getting a good deal, whether that’s the least expensive tire or not.

“They want to know what they are paying for. There’s no carte blanche anymore.
“It’s also all about convenience. Why do you think Wawa (a chain of convenience stores in Pennsylvania, New Jersey, Delaware and Virginia) and 7 Eleven do so well? People don’t want to go two blocks. They want to go one block.”

The Sears Auto Center down the street from Bustleton is both a competitor and an ally, says David Sovani, the one-store dealership’s co-owner and service manager. “They send work to us.

“We try to not to look at everybody as our competitor. We try to think of us as their competitor.”

In addition to Goodyear, it offers the Dunlop, Kelly and MAST (Michelin Americas Small Tires) brands. It also stocks some Kumho and Hankook tires.

Bustleton Tire is part of the Main Line Tire Group and the Delaware Valley Independent Goodyear dealers.

[PAGEBREAK]

For CJ’s, the future is now

Imagine a tire store without a sales counter. Everyone, even the customers, use iPads to buy their tires.

That’s what Bill Bainbridge, director of marketing for CJ’s Tire & Automotive Service, envisions happening, and sooner rather than later. So instead of waiting, he is outfitting his 12 stores with the tools necessary to meet the needs of customers in the near future.

The company’s flagship store in Birdsboro, Pa., in Berks County, is being designed using a pod strategy, without a sales counter. “It breaks down barriers,” he says. “If you are standing behind a counter, how can you interact?

“Selling is more interactive, more casual, and as technology develops to use a tablet, we’ll be ready. We are anticipating that in the near future, most sales in a tire dealership will be made with a tablet computer. And everything from our tablet will basically be an interface to our website.”

The makeover was late in coming, according to Vice President Paul Levengood Jr. “We needed to get more progressive. Every five to 10 years you should refresh your look.

“We were in this building 17 years and it needed a new look. It needed to be refurnished. We wanted to be current and not cluttered.”

Levengood’s father, nicknamed Skip, co-founded the dealership as C&J Tire in 1971. Skip changed the name to CJ’s in 1991, the same year he began to expand into other markets.

Bainbridge considers Birdsboro, a small town in the westernmost suburbs of Philadelphia, and the other CJ’s stores in southeastern Pennsylvania to be within advertising range of the big city, and he takes advantage of that. CJ’s is a sponsor of both the Philadelphia Phillies Major League Baseball team and its minor league affiliate, the Reading Phillies. (Birdsboro is located between the two cities, 11 miles from Reading and close to 50 miles from Philadelphia.)

The company’s growth must be sustainable, says the younger Levengood. “We want to be the best regional tire dealer in our area. My goal is 150 stores. We have a lot of work to do.”    ■

Philadelphia pricing

Here are some of the retail prices for a V-rated, size 225/50R17 tire sold in metropolitan Philadelphia. The pricing includes installation.
       
Mayfair Tire & Service Center

High: $247.49 (Michelin Pilot MXM4)

Low: $141.94 ( Nexen CP641)

Bustleton Tire and Service

High: $235.50 (Goodyear Tripletred All-Season)

Low: $155.45 (Dunlop Signature II)

CJ’s Tire & Automotive Service

High: $231.19 (Michelin Pilot Sport A/S +)

Low: $130.71 (Hankook Ventus V2 Concept H437)

Word of mouth: Its customers consider Mayfair great

At a visit to Mayfair Tire and Service Center Inc. earlier this year, it became apparent why the one-store dealership is so successful in northeast Philadelphia, Pa.

“They’re the best,” said Mike McGuigan, who recently was getting his tire repaired, plus an oil change. “They’re honest. They take care of you.

“If the car isn’t worth fixing, they’ll tell you, instead of letting you dump money into it.

They’ll tell you to go out and get something else to drive.”

On the same day McGuigan was getting his car serviced, there were three women in the showroom. They all agreed Mayfair was the place to go.

“This is the only dealer you can go to and won’t get robbed,” said one of them. “They are honest.’

“They tell you the truth,” echoed another. — Bob Ulrich

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