Program and dealer groups have been around for many decades. However, due to increasing consolidation within the tire industry, changing consumer preferences and other factors, the need for these organizations is arguably greater than ever.
“The industry looks considerably different than it did 15 years ago, both in the retail marketplace and the manufacturing and distribution arenas,” says Dave Marks, president and CEO of the Independent Tire Dealers Group LLC (ITDG.) “It’s impacting all sides of the market.”
Stability and consistency
Marks says that as more consolidation occurs, “it’s critical that dealers have a partner that adds some level of stability and consistency. Think about supply programs. Someone gets bought or sold and dealers say, ‘Uh-oh, what will happen to my program? Can I buy this product anymore?’
“By having a partner out there fighting for them, it adds stability to their day-today business. We’re out there negotiating programs and making sure pricing is stable, so our members can focus on their business.
“If they spent all of their time adapting to new vendors or programs that might have changed, they would be outside of their business instead of inside, making sure it’s running properly and focusing on their customers and systems.”
‘Eye of the beholder’
“The importance of a program group of dealers — or the idea of joining one of these groups — is all in the eye of the beholder,” says Dave Miller, director of marketing for K&M Tire Inc., which offers the Mr. Tire/ Big 3 Tire program to its customers.
“Dealers can be successful going it alone or dealers can be successful networking with a group of other like-minded business owners,” he explains.
“If dealers value networking, sharing best practices and utilizing program and group perks through the strength in numbers of a dealer network, they will certainly find value and success by joining those groups.”
“We’ve seen a shift from dealers who want to compete in the marketplace to a sense of them wanting to win,” says Greg Bell, president of American Tire Distributors Inc.’s Tire Pros program. “What used to be differentiators are table stakes now."
“Dealers love to get in their lane and execute and they do a great job of interacting with their customers,” says Clint Young, chief operating officer of Point S USA. “That’s what they do and they are awesome at it.”
But the sophistication of consumers has changed, he adds. Dealers’ needs are more complex, as well.
Service still rules
“When we first started in 1994, we had a few tire and auto parts distributors,” says Marks. “We had six or seven programs. Today, we have over 85 vendor partners that cover eight different categories of products.”
Miller says K&M Tire’s dealer program also has evolved.
“Every dealer’s needs are a bit different, but generally speaking, their expectations and what’s important to most of them have evolved from (earning) a couple of bucks per tire for their purchases to helping them grow their businesses through targeted marketing campaigns, financials and human resource education and effective stocking methods to keep overhead as low as possible, while rewarding their bottom line.”
Digital overhaul
The COVID-19 pandemic accelerated the need for digital tools that help dealers market to customers in different ways.
“We’ve moved from newspaper ads 10 years ago to geofencing and geolocated targeting of certain demographics and age groups, so we can maximize marketing dollars and be surgical about it,” says Young of Point S.
“We’ve made some recent additions to improving the (store) experience for customers with digital marketing boards and other in-store functionalities.”
In 2019, K&M Tire transitioned its Mr. Tire/Big 3 Tire marketing plan “from a primarily in-store-focused marketing campaign to more of a digital-focused marketing plan,” says Miller.
“We still provide our dealers with in-store point of sale materials revolving around exclusive rebates and incentives, but we also began to shift our marketing strategy towards Google and social media advertising, utilizing geomarketing” and running professionally produced video ads, while promoting giveaways.
Staying current
More tools, services and programs translate into increased ease of doing business for members, according to ITDG’s Marks.
ITDG members “now have tools available to them like category management — what sells in their market and what they need to stock to support that; tools for pricing comparisons and competitor marketing comparisons; and social media and website optimization tools to connect more quickly and effectively with the consumer.
“Our goal has always been to secure programs, pricing and vendor partnerships that add value and profit to our members’ businesses. As ITDG has grown, so have the depth and breadth of our programs.”
Keeping up with changing technologies and consumer buying preferences will be critical, according to Bell.
“More consumers are gravitating toward online buying experiences,” he says. ATD recently entered into an equity partnership with Tirescanner.com to create a new version of its Tirebuyer.com platform.
“We want to make sure we give our (members) the ability to attract and convert” online tire buyers.
Creating opportunities
ITDG, K&M Tire’s Mr. Tire/Big 3 Tire program, Tire Pros and Point S all experienced growth during 2020.
“The greatest thing about independent tire dealers is their ability to rise to the occasion and create an opportunity out of any challenge that is thrown their way,” says Miller.
The agility displayed by tire dealers continues to impress Marks. “The independent dealer is very effective at understanding and adapting to changes and to the needs of the market.”
The April 2021 edition of MTD contains an in-depth look at dealer, program and franchise groups and the perks and features they provide to members.
