Sticky questions: Labelling, retailing and the necessary systems

With levels of label-readiness varying significantly across the country and across Europe, the introduction of EU tyre labels that began a year ago remains in infancy. However, while some have gone on the record as saying it is a waste of space, labelling could also be seen as a developing field that – also like a small child – grows fastest in its early years. And with this debate in mind, Tyres & Accessories recently received an interesting addition to the debate, focusing on the nuts and bolts of retail labelling.

Sir,

The advent of tyre labelling legislation has given rise to a seismic shift in the way tyre performance characteristics are presented to the consumer.  Since 1 November 2012, tyre manufacturers and importers have made available over 60,000 part numbers via systems like the Online Tyre Catalogue.  As of today’s date, some 6,080 individual data changes have taken place within the OTC in Categories C1, C2 and C3 since the legislation was introduced, representing the entry of new labels or revisions on existing labels.  This has placed a critical focus on the importance of accurate data profiling aligned with effective product management to be able to process information quickly and make the necessary adjustments to keep purchasing mechanisms streamlined and resilient.

A recent survey into consumers’ buying habits since the legislation was introduced has highlighted that, far from being a misplaced directive from Brussels imposing a cost on the tyre industry as some thought, tyre labelling is being used by motorists to make informed decisions online about the tyre products they require before going to their local tyre centre to complete the transaction and have the tyres fitted at the depot.

The influence of the tyre label is such that it is having a positive impact on the industry and is creating an opportunity for those proactive retailers who are embracing the legislation and using it as a way to reshape their retail businesses.   We’re already seeing an increase in tyre dealers’ online presence as they use the web strategically to direct traffic back to their physical locations.

At the heart of the ruling is the assumption of transparency and accuracy of tyre information.  Not only is it a legal entitlement for the motorist but it’s also imperative that tyre dealers have access to the right data so they can fulfill sales orders.  Let’s consider the basis of purchasing systems – whether they are from CAM Systems or anyone else.  A purchase order is generated in your own system and requires some kind of reconciliation with a supplier’s.  At the lowest level, this means product data must be recognised between parties, otherwise the system misfires or even fails outright.

But how are such mechanisms affected when the product data is changing so frequently?

The introduction of new labels, constantly changing product information, amendments to article numbers, changes within categories and movement of tyres from active to non-active products are a daily occurrence. Tyres are also reducing in weight to make them more energy efficient, for example, but their labelling characteristics may not have been changed.

Yet retailers may be ordering and re-ordering tyres based on existing product information within their own systems, leading to failed orders as a minimum, right through to the delivery of the wrong tyres and the administrative issues which naturally emerge downstream.

Without the ability to analyse these revisions, dealers are unaware of the level of changes that are taking place.

What they need is access to accurate and timely tyre information.  As a result, IT systems have to be sufficiently adaptive and robust to translate these revisions systematically and in near real time and flag them up to tyre dealers.  This will ensure their status is completely up-to-date, enabling retailers to manage their purchase transactions successfully.  In essence, a dynamic catalogue that reflects all the tyre data changes on a regular basis, checks and validates them and then publishes all the variations so the retailer can view these changes and make decisions on their stock profile effectively.

Tyre labelling may not have been everyone’s panacea to new business development.  But conducted with the right product data management support that ensures retailers are placing the order right first time every time, it’s proving to be just that.  And an unforeseen channel for reducing costs and inefficiency.

Yours sincerely

Steve Daly

Commercial Director

CAM Systems