HILTON HEAD, S.C.—A point-of-sale panel is exactly what the independent tire industry needs to make sure tire manufacturers make the right tires at the right time that consumers want to buy, according to a speaker at the recent Clemson University Global Tire Industry Conference in Hilton Head.
GfK, the global leader in POS tire retail measurement, was approached some years ago to establish a retail panel and create an unbiased complex distribution channel for U.S. replacement tires that would be statistically sound and help reduce back orders, said Neil Portnoy, managing director-POS tracking for New York-based GfK.
"Seven years later, the biggest problem is back orders," Portnoy said. "How can we have huge inventories that don't meet the needs of consumers?"
The tire distribution channel simply doesn't work as it should, according to Portnoy.
"Can you imagine a supermarket where Campbell's soup is constantly out of stock, or Crest toothpaste?" he said. "The reason they aren't is that retailers are sending their sellout data straight back to manufacturers."
The U.S. is an important market, representing 40 percent of global demand, according to Portnoy. Independent tire dealers represent 62 percent of replacement distribution, he said.
When global players approached GfK on establishing a retail panel on tires, GfK chose the independent distribution channel for study because it was the largest and hardest, Portnoy said. But it proved hard in more ways than one, he said.
"We had to be very specific about the information we wanted," he said. "When we first approached dealers, they thought we wanted to take their customer information to sell to manufacturers. All we wanted to know was what tires they sold, to what customers, at what price."
It was difficult gaining the trust of POS companies until John Gamauf, retired president of Bridgestone/Firestone North American Tire, joined the GfK retail panel in April 2015.
"Without Gamauf, we wouldn't be here today," Portnoy said. "Everyone was willing to talk to him."
Throughout the process, GfK also stressed that all dealers, large and small, would be treated the same.
"We're an impartial market research company," Portnoy said. "Whether you have one store or many, you'll see the same data set.
"What this industry needs," he said, "is a better way to predict what will happen."
In its research, GfK discovered that 147.5 million replacement tires were sold through independent channels in 2016, at a value of $20.3 billion and an average per-tire price of $135, Portnoy said.
