Are dealers ‘tyred’ of fighting with local garages and retailers, asks GForces’ Tim Smith
Recent research shows the UK replacement tyre market was worth around £1.29bn in 2010, with business distributed between fast-fit chains, independent garages, online tyre specialists and franchised dealerships. A 2010 US Tyres Review, studying hundreds of independent dealers across North America, revealed a proactive and clear understanding of the importance of tyre sales in a dealership.
The research further highlighted what could be perceived as a latent approach among many dealers in the UK. Results showed that, while 34 per cent of customers wanted a specific brand of tyre, 55 per cent would happily switch based on dealers’ recommendations. This is a clear indication that nearly nine out of 10 customers rely on dealers for the ’right’ tyre’.
A 2010 Google Aftermarket report confirmed this. Of customers who shopped on the web for tyre prices and information, 89 per cent preferred to buy in person at a garage, citing installation, time and professional advice as vital considerations.
It’s widely acknowledged that customers need to be regularly reminded when it comes to aftersales. That’s why most dealers must be active with their advertising. The US study reveals 51 per cent of dealers advertise new tyres on their websites as well as via social media, aware tyre sales on the internet is encroaching on their market.
With larger retailers – such as Tesco, AA and Costco – taking a greater slice of the automotive pie, many programs have been put in place to allow customers to purchase tyres online and have them fitted within hours. Operations such as ‘site to store’ and low warehouse prices mean the importance of independent dealers’ personal relationships is slowly being eroded. Quite simply, this advantage isn’t enough in an industry where consumers are driven by the convenience and perceived value of online shopping.
No dealer wants to give their customers a reason to go elsewhere. With Google’s claim that 66 per cent of customers still purchase offline following online research, there still remains a third of customers to target.
In January, Mark Crockett, director of service and quality at Renault UK, announced plans in Car Dealer to ‘help drive down’ the cost of motoring by introducing its own high-quality, low-price tyre brand. ‘After servicing, tyre replacement is the second most frequent reason for a motorist to visit a dealership or workshop, and is also one of the highest-value items when maintaining a vehicle.’
It’s apparent that, with rising motoring costs, the threats posed by large retailers and cheaper alternatives are minute compared with the opportunities dealers can offer.
Dealers would benefit from a program and simple quotation system that allows customers to shop for tyres and other parts. With an opportunity to compare prices and brands, consumers have the reliable functionality of finding the tyres they need and dealers can continue to build on customer retention.