When asked what artificial intelligence (AI) is, ChatGPT — an artificial intelligence chatbot — said this:
“Artificial Intelligence refers to the development of computer systems and machines that can perform tasks that typically require human intelligence. By simulating human intelligence, AI technology aims to automate and enhance various processes, solve complex problems and improve efficiency in a wide range of fields such as healthcare, finance, transportation and more.”
AI seems to be at the forefront of every tire dealer's mind — no matter the size of the tire dealership.
From RNR Tire Express, which has over 180 locations, to Kilgore Tire Services, which has two locations, and Ghanim Group dba Tire Store Service Center with nine locations, dealers are dipping their toes in the AI world.
AI utilization can vary
Darrin Mallett, president at the Kilgore, Texas-headquartered dealership, says that his first interaction with AI was through ChatGPT.
“I saw an advertisement and downloaded the app and started using it within my businesses by having it help me reply to customer Google reviews or create some emails,” says Mallett.
As of now, Mallett is the only employee at Kilgore utilizing AI.
“I use it for writing, answering questions, updating policy, creating a mission statement and things along those lines,” he says.
Mallett says he wants to get comfortable with the new software before introducing it to the rest of his team.
However, RNR Tire Express is doing the opposite.
“RNR Tire Express is using AI as much as we can right now and are utilizing it in stores, but we are mainly focusing on the corporate side of it right now,” says Adam Sutton, president, RNR Tire Express.
“We are actually building a new point-of-sales (POS) system that our entire operating system will switch over to and we are releasing that in modules.”
RNR started rolling out its POS system in January of last year. The company rolled out price quoting first and then AI analytics of predictive pricing and inventory management came next, according to Sutton.
Although Mallett and Sutton operate different sized dealerships, both believe that product and demand forecasting will be the biggest asset that AI can help tire dealers with.
Baker Ghanim, president of Tire Store Service Center, a Bedford, Texas-based dealership, says he wants to break the utilization of AI in dealerships in two categories — near term changes and future changes.
“For the near term, with more tire sizes and patterns in the market than ever, and our business model of stocking over 2,500 tires per location, we are trying to use AI to help us manage our inventory across our nine locations,” says Ghanim.
“We believe that an AI tool can manage orders from suppliers and in-company transfers.”
However, the AI tool must take into account the location's sales trends, tire tiers, dealer and consumer rebate programs, seasonal trends and more, according to Ghanim.
His goal is to have “software that will look to see if there is an alternative option in stock or overstock at a different location before ordering a specific tire size and tier.”
In the future, maybe 10 years from now, he believes AI will become more integrated into the day-to-day operations. Such as, putting a car in a bay with a technician at the right time, predicting the expected time required for repair, the current tire condition and more.
“These factors will determine the work needed and the arrival time to service the customer.”
AI in POS systems
The new POS system that RNR is releasing in modules will have demand forecasting and product inventory bult into it. It will also give more data analytics.
“The system will give us cleaner data than we’ve ever had before to make data-driven decisions, and then we are going to be utilizing AI to help make those decisions and predict and forecast the things we should be doing,” says Sutton.
Mallett agrees that AI can work “faster than our brains” when it comes to inventory.
“It could really help if I can come in Monday morning and say, ‘I need 2,000 pounds from Goodyear,” and put the parameters in the system and have it spit out a suggested order,” explains Mallett.
Another task that AI is helping with is marketing.
Similar to Mallett, RNR says it uses ChatGPT to create scripts for training videos or scripts for salespeople.
RNR’s learning monitoring system (LMS) can also create a digital character through AI and have it follow prompts.
“Historically, we’ve had to film videos and get an actor or a trainer and carve out studio time and write a script and then pay everyone,” says Sutton.
“Now, we can go to ChatGPT and say, ‘Write me a script about tire safety with topics x, y and z.’ And that won’t give you the final output but it's going to get you 60 to 80% of the way there. Once the script is done, we can put that into the AI technology that will generate a person following the script.”
Imagery is another way AI can be utilized for marketing.
Jason Sexton, creative director for RNR Tire Express says the biggest challenge for marketing is always visuals.
“Midjourney is an AI text to image generator that we utilize,” says Sexton.
“I can type into the text to image ‘Jeep Wrangler climbing over rocks at sunset’ and in one minute it will generate a high-resolution image that looks real.”
“The other thing I think of immediately that AI could improve upon in our industry is the service writer position,” says Mallett.
“There is so much to keep up with in a given day that we can forget to do little things or drop the ball on them. Sometimes we drop the ball on calling people back or ordering something, so having a POS system that could remind the dealer, ‘Did you put the order in for those tires?’ or ‘Did you call that customer back?’ would be really helpful.”
Another thing AI could help service writers with is the communication between customers and technicians.
According to Mallett, if a service writer is inexperienced and a customer brings their vehicle in for inspection there may be some questions that the technician would want to know the answer to that the service writer just doesn’t think to ask.
“For example, if a car comes in and it’s overheating, mechanics will want to know if it overheats in the morning or afternoon or just when the customer starts it up,” says Mallett.
“These are the things mechanics will want to know when diagnosing the problem, so if an AI POS system that is intuitive and asks those questions would help not only mechanics but service writers too.”
Potential resistance
“One of the things I think is super important is change management and training,” says RNR's Sexton.
“Whenever you implement a new process — especially something to this level — it's important that you look at the changes it's going to have on workflow, processes and job roles within the organization.”
Sexton says dealers need to prepare for potential resistance to change and implement effective change management strategies like upskilling opportunities for employees to ensure they have the necessary skills to work with AI.
“In essence, it’s like when the first accountant was able to use a calculator at their desk instead of doing everything on a spreadsheet,” says Sexton.
“People shouldn’t be afraid of it. It’s a new tool to make you even stronger and better.”
Mallett agrees that AI is a tool for employees rather than a replacement for employees.
“I remember when people were nervous about robots coming over and taking jobs, but the thing is people don’t want to do manual labor as much,” says Mallett. “So, these machines took care of it. That is how I view AI.”
He continues by saying he doesn’t believe AI is a manual labor tool, but it can free people up from the stuff they really don’t want to do.
“Plus, AI creates more jobs because you’ll need people monitoring the software and implementing and teaching it,” he says.
Sexton draws similarities to the internet and AI when the internet was first released to the public.
“A lot of people viewed the internet as a fad — like it was only something geeky people use,” says Sexton.
“But it completely changed our way of life, like the introduction of the cellphone. I find AI equivalent to these in the way it will affect and influence consumers.”
Ghanim believes that AI will not become the new norm within the industry for another 10 years but believes the shift to AI will be “gradual and natural because the machine will be so good that it will be our preferred option because it never damages a tire or wheel.”
Where to start
“To start in AI, it is important to identify what your goal is,” says Sexton.
He says that goal could be enhancing customer experience, becoming more efficient or gaining a competitive edge over competitors.
“What are you trying to get from the system, and then make sure you evaluate different systems or different AI programs that will help you achieve your goals. Once that is in place you can move forward by bringing it into your company.”
A good way to pinpoint goals for your dealership is to look at repetitive actions happening in your dealership, according to Sexton.
“Take that repetitive, mundane task to AI and free up someone's time to be more powerful and save money,” he says.
Sutton reminds dealers that AI is only as good as the data it pulls information from, so it is important to effectively communicate with AI on what you need or want.
Sexton recommends adding an AI chief officer — a newly created role — to the team. Put that person in charge of AI and its tasks within the tire dealership.
“Part of the process is educating and training people so they understand we aren’t trying to replace anyone, but actually trying to expand and enhance their role” says Sexton about the apprehension around AI.
“AI isn’t coming,” says Sutton. “It’s here and if you can be an early adapter and put somebody on your team that knows how to do it, it can help and enhance, not hurt and hinder.”
Ghanim says he has a new shop in the works and is taking these industry changes into account.
“We are designing our shop in the shape of a circle with bays all around the shop, and technicians in the center of the shop,” says Ghanim.
“The setup facilitates smoother communication today and will set us up for a more efficient shop in the future.”
Mallett encourages tire dealers to educate themselves on AI and become comfortable with the upcoming changes it will bring to the tire industry.
“If you’re not changing, you’re not growing,” says Mallett.
AI for service advisors
What if every service advisor in your tire dealership had a coach whispering in his or her ear a punch list of the precise services a customer’s vehicle needs? And what if the list came with standardized talking points to ensure the jobs were properly explained and sold?
Patrick Murphy, the CEO and co-founder of Sidekick360, says his company is building that tool, and using artificial intelligence (AI) to gather the information in the span of a few seconds.
“The biggest problem in our industry right now is (service advisors) are spending 15 minutes trying to figure out what to sell this customer,” Murphy says. They are searching their local records, checking CarFax reports, and scanning other resources to find lists of recommended services, not to mention warranty and recall information.
It’s easy to cut steps off that process when time is short and there’s a line of customers at the counter. But even when an advisor performs a thorough review, Murphy says it can be difficult to synthesize all the information.
That’s where AI and Sidekick360 can help. AI is capable of gathering the data, but also analyzing, summarizing and prioritizing it to determine what service needs to be completed. If the result is a recommendation for a fuel system service, the tool can help the service advisor explain the service to the customer in a brief and understandable manner.
“We provide a standard conversation for every rooftop. So (with) every service, (you’re) having the same conversation.”
But these aren’t cookie cutter recommendations with an alignment or brake job on the list for every vehicle that rolls into a service bay. The data is specific to each vehicle, and considers prior service records, mileage and histories of like vehicles.
Sidekick360 also provides users with a way to track what services weren’t sold, so owners and managers can monitor those missed opportunities. They can also set local “rules” to make sure a customer who replaces a cabin air filter in August is reminded and recommended a year later to replace that filter again.
There’s already tons of data available. Murphy says his goal is to provide “better data right now for each dealer we work with.” —Joy Kopcha
AI is only as good as its data
American Tire Distributors Inc.'s intelligence company, Torqata, is utilizing the new AI rush to educate dealers on data and how best to utilize that data.
“AI or machine learning — those are fancy words for concepts that have been around for a few years, basically statistics — means I am able to learn from something that happened in the past to predict something that might happen in the future,” says Tim Eisenmann, CEO, Torqata.
“Data is the ingredient you’ll learn from and if you don’t have good data, your recommendations from AI will not be good.”
The importance of large data
Eisenmann believes the tire and automotive industry is at its infancy with the establishment and familiarity of large data sets and he wants dealerships to be able to “leverage decades of customer interaction and transactions.”
He believes the two biggest applications within the tire industry right now for AI and large datasets are forecasting and customer experience.
Forecasting and becoming more predictive can help dealers with ordering and inventory levels and customer experiences can be tailored to fit each customer.
“For example, if I know a certain customer really likes a printed invoice, I shouldn’t have to ask the second time they come in,” says Eisenmann.
“I should learn from that initial time of asking if he wanted a printed invoice to create a better customer experience for them.”
Making data more usable is where Eisenmann recommends tire dealers to start.
With thousands of tire dealers there are "probably a million different assistants and they all input data differently,” he says.
“For example, you’ve got a Goodyear assurance tire that’s also called Goodyear Assurance Pro, GY Assurance — there's a million ways to input that tire. So, what we do is we plug into 15,000 different shops and extract all of that data. Now, the AI models like forecasting and inventory optimization can work and normalize that big pool of data rather than just your one location.”
Start with what you have
When beginning to implement AI into your dealership, Eisenmann suggests starting with the problems the dealer already has in their shop “because that’s the only thing worth solving.”
“I wouldn’t necessarily look for an AI solution to (another tire dealer's) problems,” says Eisenmann. “I would look for a software provider that solves my specific business problem and then see if it has AI features to utilize.”
Point-of-sales systems are great because many shops already have some type of system implemented. Eisenmann suggests talking to the sales rep and asking if there are any additional packages or plug-ins,you’re not utilizing that you should.
“So, it’s not like dealers have to implement AI software,” he says. “It’s software that is doing a certain thing and it does it in a very intelligent way, and that intelligent way is usually fueled by AI.”
Eisenmann believes the industry is going to keep getting more sophisticated, so, now is the time to get a good understanding of what does and what doesn’t work in your dealership.
“The complexity of the system is going to increase,” he says. “You will need that support and you will need that technology to amplify the intelligence and knowledge you bring.
"So, if a call for action isn’t there for retailers, it needs to come really soon because there are other, larger chains harnessing the power of that technology. It’s not going to get simpler. It’s not going to get easier. So, the best time to start educating yourself is now. Otherwise, you’re going to be left behind.” —Madison Gehring
About the Author
Madison Hartline
Associate Editor
Madison Hartline (Gehring) is the associate editor for Modern Tire Dealer and Motor Age. Since joining MTD after graduating from The Ohio State University in 2022, she has taken on the role of managing the brand’s social media strategy, producing podcast episodes and overseeing eNewsletter content.