Making the Most of the Internet

Online retailing has come of age and UK consumers are leading the way. Conservative calculations suggest UK e-shoppers bought some £6.9 billion worth of products online in 2005. This year IMRG, the professional body representing online retailers, expects sales to increase to around £30 billion because 45 per cent of shoppers are looking to increase their online spending this year. Despite this, government figures suggest that only 15 per cent of tyre related businesses are represented online. And the 2006 NTDA/Trend Tracker Tyre Wholesaler survey found that over half of respondents described the Internet as “not important” when it came to their part of the business. Tyres & Accessories spoke to Internet specialists from both inside and outside of the tyre trade and found out that fresh business is there for the taking.

From the consumers’ point of view, the Internet is all about being in control. Online shoppers perceive they are in control of when they shop and even how much they pay. The good news for tyre businesses is that this isn’t strictly true, and the increased popularity of the Internet across all social sectors means there are very real profit opportunities to anyone enterprising enough to take advantage of them.

Independent retailers are most likely to shy away from this technology because of the perceived threat of lost business from companies like blackcircles.com and mytyres.co.uk. However, it needn’t be this way.

Don’t be scared off by the existing players

True Joe Bloggs tyres can’t compete with national and international companies online, but the opportunity is there for independent retailers to raise the profile of their business within their region. Most marketers agree that the print edition of Yellow Pages might as well be dead – all of the tyre retailers that T&A spoke to have either reduced or completely cut their spending in what used to be the most popular directory service. The reason? Consumers are using online search engines like Google or Yahoo to find their nearest dealer instead. So while typing the word “tyres” into Google results in a list of national businesses.
Typing “tyres+bolton” for example, returns www.thistlethwaitetyres.co.uk followed by touchlocal.com’s “Tyre Fitters in Bolton” page. No doubt Thistlethwaite Tyres would be a successful business if it didn’t have a website, but you can bet it is doing better with one.

Dealers can learn two things from this particular example – the importance of a good search engine ranking and that online directories (like touchlocal.com) are also replacing Yellow pages. And that’s why smart businesses are making sure their company’s website is registered with as many search engines and as many online service directories as possible. A word of advice – if you are not in the top three pages of results in any of the major search engines or directories for your local area, you may as well not be listed. In April Jupiter Research found 90 per cent of potential customers give up reading search engine results after this point, with 62 per cent clicking links on the first page.

So once you have launched a website promoting your business, the next step is to build in a system for taking transactions. The benefits of this kind of system over an information site alone are clear. Firstly you can close a sale without speaking a word, and secondly your computer can ring though sales when your branch is closed. Of course fitting will have to be done during working hours, but once a customer has entered their credit card details, the price is fixed and a new long-term customer has potentially been won.

But I haven’t got time to do that…

For those of you who shuddered when you read the words “build in a system for taking transactions,” don’t worry it needn’t be either as expensive or as complicated as it sounds for individual outlets. It’s in the supplier and wholesalers interests to help sales along.

Currently most retail outlets with a broadband connection are already connected to an online stock ordering system. Surely the next step is to develop this into a customer facing front end that can be inserted in to dealers’ websites. The fact that some premium manufacturers are distancing themselves from having a direct sales engine on their own website (for fear of alienating independent wholesale and retail customers) suggests that finding a more diplomatic way of presenting this technology is likely to be the preferred approach. The word on the grapevine is a couple of well-known names are already considering doing exactly this. As the webmaster of one leading company told T&A, “its going to happen, its just a question of who gets their first.” The implication being, once one company has got it the technology in place others will follow suit.

However this isn’t an easy task. The manufacturers’ development of a system of this kind is likely to be hindered by the intricacies of EU competition law dictating how pricing is controlled. While this doesn’t rule them out, it might mean one of the UK’s large wholesalers is better positioned to produce a customer facing front-end. Micheldever Tyre Services IT manager, Luke Claughton explained that another problem is the variety of ordering and stock-keeping systems in use: “Tyres businesses run on a number of different operating systems, use different stock code formats within each operating system and have independent pricing structures. It would therefore be very difficult to tie all of this together in one single front end.”

According to Claughton Micheldever see the Internet is an increasingly important sales channel and is keen to help independent dealers become confident users of its technology: “ A number of tyres dealers rely on third party providers of IT systems to manage their computer systems. This may have had an impact on their willingness to get involved with a nothing computer related other than their basic computer systems. Micheldever have a team of field based business development managers that are supporting our customers in an attempt to increase confidence in using new technology – the Internet being at the forefront of this.”

If you can’t beat them, join them

The fact remains that a “plugin” style customer front-end system linked into a wholesaler or manufacturer is not yet on the market. This leaves retailers with two options: Wait or take advantage of what is already on offer. One strategy industry observers have suggested is to sign up as a fitting partner of as many of the online retailers as possible. The theory is that while you may only earn a nominal fee the first time one of their customers comes to you, you can look at this as the cost of getting that customer to come through your door. Once they are there retailers have the opportunity to win over the consumers for themselves with their professional service and competitive offers. When this suggestion was made at the recent NTDA conference in Marbella, sparks flew. Some saw this as giving extra business to the competition. But surely it is always worth considering the flipside.

Introducing the e-tailers

Whether you want to work in partnership with them or not, it is always worth keeping informed about who’s doing what in the market. With this in mind Tyres & Accessories compiled the following list of online tyre retailers. If you know of any more that aren’t included please email the magazine and fill us in. One thing is for certain, new e-tailers are popping up all the time. 18 months ago there were roughly nine and now there are almost double that.

• Mytyres.co.uk (Delticom AG) –

Europe’s largest online tyre seller, Delticom operates 60 online shops in 25 countries and predicted a turnover of 128 million euros for the 2005 financial year. Delticom reports that 90 per cent of orders are delivered within a seven working day period.

• Blackcircles.com –

Blackcircles.com is another tyre e-tail pioneer. Led by entrepreneurial rising star Mike Welch, the Peebles, Scotland-based company is the UK’s largest online tyre seller. The company is predicting a turnover of at least £10 million this year.

• Bestbuytyres.co.uk –

New addition BestBuyTyres is backed by 12 leading multi-outlet independent tyre specialists who operate over 250 tyre fitting centres in England, Scotland and Northern Ireland. BestBuy’s unique selling point is that it is affiliated with a some well-known tyre specialist chains including Universal Autocentres, Merityre Specialists, Formula 1 Autocentres, McConechy’s and Mr Tyre Ltd. Interestingly the outlets are only identified by address and not by name on the bestbuytyres.co.uk website.

• Etyres.co.uk –

Launched in 1997, etyres is the registered Internet trade name of Fleet Mobile Tyres Ltd. The fleet business was established in 1992, offering a completely mobile service to the “business-to-business” sector. According to the company’s website, the etyres business model operates profitably with gross margins that are a fraction of those required by traditional tyre depots. Customers order tyres or batteries and are quoted an all inclusive fitted price. A fitting time is agreed at the chosen fitting location and local partners arrive and fit the battery or fit and balance the tyres.

• Rubberball.co.uk –

Rubberball’s site describes the company as a “UK-based company although we source tyres from outside the UK.” Rubberball reports that it has portfolio of over 40 tyre brands and more than 10,000 types of tyres at “low discount prices.” The company includes delivery in the price of its tyres and says that 90 per cent of its deliveries arrive within four days.

• Ctyres.co.uk –

While this site has a web address reminiscent of the leading UK passenger retread producer, ctyres is actually the online retail outlet of Bradford-based Carlisle Tyre Centre. Ctyres’ prices include VAT and delivery for all but the highlands and islands, where the company charges a £6 per tyre surcharge. 90 per cent of deliveries are said to arrive within two or three working days.

Other online tyre retailers include:

cheaptyres4u.co.uk
eventmobiletyres.com
jettyres.co.uk
premiumtyresonline.co.uk
tyrefitdirect.co.uk
tyresonline.net
tyretorque.com
tyretraders.com
top-tread-tyres.co.uk

Obviously this is not an exhaustive list so if there are any we have missed out or you can provide further information about the companies listed above, T&A would love to hear from you.