Is the future in brick and mortar, mobile or online?
The landscape of the tire industry has been changing over time; it’s no longer the sole domain of the brick-and-mortar store. New ways of doing business such as online e-commerce retail and mobile van sales/services are growing in popularity. So what’s the future for the tire dealers? Traction News talked to those in the know and compared the three business models.
The case for online
SimpleTire chief operations officer Josh Chalofsky started his online tire-selling business with his brother Andy six years ago, building on three decades of family experience in the tire industry. Traction News profiled the brothers’ e-commerce business recently. Their highly successful business model sees SimpleTire source the cheapest tire price for its customers through its network of independent distributors and manufacturers at any given time and ship the product that day.
Josh Chalofsky says e-commerce is here to stay and the industry needs to “embrace disruption.”
“Society is changing, and shifting towards the idea of convenience,” Chalofsky said. “There is the understanding that these days more and more things are being purchased online and whatever the industry is, creating an easier and more convenient experience for the consumer, they are going to excel.”
However SimpleTire’s business model still relies on physical tire stores — it has a network of installers to put the tires on for the customer, or the customer can nominate their own — and Chalofsky says that’s how it should remain.
“There’s room for all kinds of business models and there’s always a need for consumer interaction,” he said. “I don’t think brick and mortar will ever diminish; we have a very strong relationship with our installers and brick and mortar will still be a big part of the industry because customers need a place to have their tires installed. A lot of people, including me, would have no idea how to install tires.”
Chalofsky suggests change may come by tire dealerships focusing more on the servicing aspect but points out that no matter how convenient buying tires online may be, it’s not for everyone.
“There’s always going to be a need (for physical stores),” he said. “Online is great for a planner — someone who doesn’t need a tire right now — but if you get a flat tire, you’re still going to need a local guy.”
Mobile tire services are growing
Scott Blair, founder of Wheelworks Mobile Service Solutions, formed a company that supports independents starting their own mobile tire business and helps established dealers add a mobile service to their existing tire dealership. That includes custom vehicles, training and business development services.
He agreed that these days people are used to ordering things using their mobile phone and having it delivered to them super fast. He says they are willing to pay for that convenience.
“The most valuable thing people have these days is their time; you’ve got families with two working parents and two or three children going off in all directions every day and they just do not have the time to go to a retail store and sit for three or four hours for a basic service,” Blair said.
“Whereas the mobile van can show up at their driveway, at their office, at the playground on a Thursday or at a Friday evening ball game and they are willing to give up $60, $70 dollars or more to have that convenience and to have that time back.”
He said that while brick and mortar stores might have to offer discounts or free services like a rotate and balance to encourage a customer to drive past their competitors, the mobile service offers something different: making life easier. The challenge, he said, is that the vans have to be fitted with all the expensive high-end equipment and technology to enable a single person to undertake the changes themselves. Training is also essential and more complex.
However, Blair believes the increasing popularity of mobile tire services is also due to the ‘personal touch.’
“The great thing about this business model is that you have owner-operators, people who are responsible and have a vested interest in what’s best for the customer,” he said.
“People like to be able to speak to the person who is performing the work. It’s more customer-facing and the great thing is that we can bring the tire store to their driveway; they don’t even have to move their car.
“They can watch us perform the service on their vehicle and know that mobile operators that attain Tire Industry Association Certification like us have high-level knowledge and are passionate about what they do.”
Bricks and mortar – built to last
Executive director of Lex Brodie’s Tire, Brake & Service Company Scott Williams is firm in his belief in the value of brick and mortar tire stores. His stores don’t sell tires through e-commerce or provide mobile assistance but add value for their customers by providing additional services, such as online tools, education services and face-to-face good old customer service.
“We have no concerns that (brick and mortar stores) will fade,” he said. “We completely expect our business to grow.
We don’t sell tires online but we do provide a tire estimating tool where customers can research and see the good/better/best tire buying options we have, they can see the full estimate online and make an online web appointment 24/7.
“We also have multiple auto service tools where our customers can educate themselves, get a price range on their repairs and we even post pictures of the needed items once we inspect the vehicle, online. We feel making these sort of online tools available help draw customers to our website and ultimately into our stores.”
Williams said physical stores encourage communication between customer and technician, with tire professionals offering advice on wear patterns, auto care and maintenance. Lex Brodie’s describes itself as “like your family doctor, for your car” and, like a family doctor, tire dealerships and service centers are often at the heart of their communities. Lex Brodie’s, for example, has donated $26,000 to local non-profit organizations through its loyalty scheme.
So it seems the takeaway is this: while each way of getting tires to customers has its benefits, drawbacks and differences — from price and convenience to face-to-face customer service and advice — there is no one-size-fits-all in the tire industry. Personal preference, quality of service and employing innovations that make the consumer’s life easier all have a part to play in the changing face of tire dealerships, no matter what shape or size they come in.