CLEVELAND—As tire shopping evolves to a largely Internet-driven exercise and government-mandated tire performance labeling looms, independent tire dealers need more than ever to figure out how to become the recognized “tire experts” in their local marketplace.
That message came across loud and clear to those attending the Presidents and CEOs Panel at ITEC 2012 in Cleveland Sept. 19.
Top tire unit executives from Bridgestone Americas Inc., Cooper Tire & Rubber Co., Hankook Tire America Corp. and Pirelli North America Inc. offered their views on tire labeling, the Internet, eco tires, the Chinese tariffs and more during a one-hour discussion.
In general, the panelists acknowledged that today's tire-buying consumer is much more informed than in the past because of the Internet. They also said the coming tire-labeling program—part of the government's tire fuel-efficiency grading regulations—will increase the amount of information available.
This wealth of information, however, can be a bit daunting, providing the independent tire dealer the opportunity to step into the breach.
“I believe the harder that is to do (qualify the driver's needs), the better that will be for the traditional tire dealer because they are better equipped because they specialize on it to be better at it,” said John Baratta, president, consumer tire replacement sales, for Bridgestone Americas.
“This will be a great way to differentiate yourself going forward of being the expert in the marketplace,” he said.
Referring to the pending tire labeling regulation, Paolo Ferrari, chairman and CEO, NAFTA region for Pirelli, said his company “welcomes anything that pushes the boundary of technology. That's Pirelli; that's our DNA.”
Chris Ostrander, president, North American tire operations for Coop¬er, echoed and elaborated on Baratta's observations.
“Historically go back to newspapers … the classified ads,” the executive said.
“You can be whoever you want (to be) in those ads, and that is what the Internet brings to the scene as well. You can be whoever you want in that (online) ad, and it really gives you a great opportunity to differentiate yourself. And be who you want to be for who you want to sell to in your market,” he said.
“Utilize that as a strength in your market, specific to your segments that you want to attract into your stores.”
Ferrari suggested dealers take a hard look at their media presence, noting that most companies are underspending on social media.
“You need to be extremely local (in social media),” he said. “You need to engage with local initiatives. Your Facebook page should be specifically for your local market.”
Ferrari cautioned that advertising on the Internet can be expensive and urged dealers to consider aggregating with a partner or partners to attain the scale needed to obtain and maintain visibility.
“As the markets consolidate—the big get bigger and the smaller get squeezed in—this part of the market needs to work on the service, on the product knowledge of providing customers a different message, not just price.
“(Dealers) have to do it on their own. It all comes down to understanding the products and what the perfect fitment for that individual car.”
Ostrander said he's still surprised by how little value consumers place on tires.
“It's amazing to me that people won't give a second thought about paying $150 on some Nike shoes, but when it comes to spending that amount on a tire, a thing that's really tied to their life … it's truly amazing we don't do a better job of educating consumers along those lines.”
He said it is essential to train consumers to consider the eco-friendliness of a tire when considering its value as well.
“Look at how a U.S. consumer does a purchase,” he said. “They will define performance by looking at safety, quality, reliability, kind of mileage, how it looks on their car, and they want it at a competitive price. … We need to get that into the consumer's head that (fuel-efficiency) is part of the value equation going forward.”
Hankook President and CEO Soo Il Lee stressed that dealers and their tire suppliers can work together to build their online images, and dealers can court owners of vehicles that come equipped with OE brands they carry.
Baratta told the audience that despite all the information available, consumers are still “75 percent-plus likely to buy the tire you recommend.”
“The whole industry has the opportunity to ... take the leadership role in educating the consumer,” Baratta said.