e-commerce and online tyre business news
Tyrepac, reputedly Asia’s first online tyre portal, has launched a mobile service in Hong Kong. “We are extremely pleased to now offer the same convenience as consumers in Singapore [where the company is based]…to consumers in Hong Kong.” said Tyrepac managing director and co-founder, Ler Hwee Tiong. According to the company, battery change and “a host of other services on top of the tyre changing” will soon be offered.
October's Tyres & Accessories issue contains features on the online tyre business and wholesaling. Subscribers, click more to read the e-magazine online.
With 70 per cent of us now having access to the Internet, and consumers making an average of 2.1 virtual purchases a month, maintaining the right online presence is as important as ever. According to the 2009 Oxford Internet Survey, the two most common online activities are researching product purchases and actually buying them (about 80 per cent of web users having done each). However with a multitude of distractions out there in cyberspace, tyre businesses have developed complex e-marketing strategies designed to lure customers to their sites with low prices, before up-selling them onto more expensive products. Some of the clearest evidence to date shows that the Internet is an increasingly competitive mid-range market, not a budget bargain basement as some say.
Comparing online price monitoring data with the results of market research conducted by Encircle Marketing shows that national fast fits continue to be the most expensive places to buy, with tyres costing £86.22 between January and August 2009. No surprises there. The fact that tyres are cheapest at pure e-tailers (£65.91) on average, won’t surprise many either. In fact, with the exception of average prices at autocentres rising to meet those at car dealerships (£78.68 and £79.18 respectively) the pattern is pretty much the same as it was last year.
Cam Systems, the leading provider of software solutions and services to the UK independent tyre industry, has announced that it is investing £1.3 million in a customer charter called Cam 20:20. According to the company, Cam 20:20 sets out the its aims to serve customers more effectively by providing “wider IT options…and by ensuring the transparency of Cam’s performance against defined customer service levels.” In other words, the company is furthering its joined up approach to tyre business systems, with new products and a set of new service level agreements.
Cam 20:20 is the result of customer surveys conducted by Cam that highlighted the requirement for both more tailored and, at the same time, more comprehensive services from one systems provider. This means the launch of a 32 bit version of the company’s popular Cameo software, which runs on the latest windows operating systems and vastly improving reporting capabilities – even opening up the possibility of Google-style analytics. At the same time, Cam’s .NET system rewrite will deliver document management software (for purchase and sales ledgers, fleet management and call centre options) in the early part of 2010.
To support the introduction of Cam 20:20, the company has created a dedicated customer services team after appointing Steve Bazeley to the new role of customer services director. And new service level agreements (SLA) provide a more tailored approach to IT service needs. Customers can opt for Premium, Business or Standard agreements.
Blackcircles.com is aiming to increase its garage network by 30 per cent by the end of 2009, adding as many as 400 garages. Announcing the news the company vowed to help independent garages “fight back”, saying it offers “additional revenue, customer footfall and national marketing, helping [independents] compete with major high street brands.”
Booth 2105 in Hall 2 will belong to DailyDepot Inc., a wheel production division under China Southern Motor Group. Products cover alloy wheel for passenger cars, steel wheel for passenger cars and steel wheel for commercial vehicles. The company has an annual production capacity of 5 million piece alloy wheels and 9 million piece steel wheels. It has in-house test labs and tooling work-shop, with teams to provide service from scratch, R&D to production to logistical services. Moreover, the company says it can support EDI and JIT system too.
Its experience includes the joint-development of new product and supply chain management, with customers including China Chery, China BYD, Audi, Ford, India Tata, and many other prestige after-market brands in United States and EU. DailyDepot will be welcoming interested observers to its booth, promising presentations on new designs in a fully-curtained area. It will also promote its new e-Commerce enabled website during the show, with registered customers in with a chance of winning a set of alloy wheels.
The first-ever Virtual Aftermarket eForum is set for 30 September. The eForum is an educational symposium focused exclusively on e-commerce and business technology in the automotive aftermarket. The planners chose to apply the latest web conferencing and virtual event technology to the eForum this year as a way of delivering the same content with significant savings to attendees and vendor participants. The eForum will be conducted completely on the web through a virtual event portal powered by ON24 of San Francisco, www.on24.com. The ON24 technology will provide a scalable and seamless experience for participants from the moment they register until the conference shuts down in March 2010.
30 September will kick off the eForum with four streaming keynote presentations on leading technology topics with online interaction and Q&A with the presenters. Registered attendees will have access to download exclusive white papers, videos and other presentations from the eForum archive, which will be available for six months. Attendees can network and participate in discussion chats in the eForum lounge. Individuals will be able to search for others with similar interests and start discussion threads about the presentations or other topics. (Tire Review/Akron)
Blackcircles.com has appointed two new senior managers as part of the company’s ongoing expansion plans. The Peebles-based business has recruited Alan Littlewood as head of network and supply and Peter Nowell as head of commercial operations. The appointments follow the announcement of a major partnership deal with the RAC, enabling Blackcircles.com to sell tyres directly to the motoring club’s seven million members through a new venture, RAC Tyres.
Peter Nowell will be responsible for developing mutually beneficial relationships with Blackcircles.com’s suppliers. He has previously held senior marketing roles at both Kwik-Fit and ATS Euromaster. Alan Littlewood joins Blackcircles.com from car dealership operator Pendragon Plc. His role will be to expand the company’s network of franchised garages and develop its servicing offer through its partnership with Unipart.
The rise in online tyre shopping seems set to remain ongoing, but will this trend prompt another more worrying development in terms of consumers fitting appropriate tyres to their equipment? Tyresafe believes that as e-Commerce continues to boom motorists looking to online retailers for their next pair of tyres are putting their safety at risk by selecting tyres with a lower speed symbol than recommended for their car. This error is not always made unintentionally, says the campaign; in fact, there is a danger that some customers are deliberately choosing lower speed rated tyres due to the lower prices yielded in online comparisons. With safe vehicle handling largely dependent on using the right type of tyres for the car, TyreSafe is urging motorists to consider that selecting tyres of the recommended size, load index and speed symbol is essential to safe driving.
Stuart Jackson, chairman of TyreSafe comments that, “When shopping for tyres, many motorists hold the misconception that their choice of speed symbol should be determined by how fast they drive. The reality is that a tyre’s speed symbol is not just a measure of the tyre’s maximum speed capability; it also provides an indication of overall performance, even at lower speeds. While many motorists may be feeling the pinch in the current economic climate, we would encourage them not to compromise on road safety. Driving on tyres with a lower speed symbol than recommended may seriously compromise vehicle handling, putting the driver and other road users at risk. It could also cause irreversible damage through exaggerated wear or sidewall cracking.”
On April 22 the European Parliament approved – by a large majority – a number of draft measures that will see tyre performance in fuel efficiency, wet grip and noise levels explained on a standardised label attached to new tyres. The new rating system, pencilled in for implementation by late 2012, will use a scale similar to that utilised on the EU Energy Label or “fridge mark” as it has affectionately been dubbed.
Now that the tyre labelling measures first published in November have been approved, it has been proposed that tyres generating particularly low levels of noise be given an extra insignia, imprinted on the outer sidewall. Another proposed change is an upping of the level of information provided in tyre advertisements – the aim is to better inform consumers and provide a stimulus for the development of safer and more environmentally friendly tyres. However, specific details of the labelling scheme have yet to be finalised, and the draft text still awaits the scrutiny of the Council of Ministers, the body representing the 27 EU member states.
Leading motoring organisation RAC has teamed up with Blackcircles.com to create RAC Tyres, an online tyre retail portal offering “hassle free online tyre service” to RAC’s seven million members and any visitors to the RAC website. Blackcircles.com will power the motoring organisation’s new tyre retail operation, RAC Tyres (accessible at both www.rac.co.uk and www.ractyres.co.uk). The service will enable visitors to order tyres through the website and have them fitted at any of the over 900 garages in the Blackcircles network.
Announcing the news, company representatives described the agreement as a “landmark deal” and pointed out that the move follows a period of sustained growth for Blackcircles.com. According to an interview with the Financial Times published in early April, company founder Mike Welch believes the recession could benefit Blackcircles as customers seek a lower cost tyre alternative.
Blackcircles.com has grown to a turnover of in excess of £10 million since it was launched in 2001. In the earlier report, FT quoted Welch as saying sales were as much as 80 per cent up year-on-year. While year-on-year sales growth is currently quoted at 60 per cent it remains nonetheless impressive.
MAM Software has announced the forthcoming release of its 'Autonet Ediwheel Buyer (AEB)' e-commerce solution. When launched in April, AEB will enable users of MAM's Autopart software to retrieve real-time stock availability from any Ediwheel-enabled supplier. In addition, users can place immediate purchase orders and receive real-time line-level acknowledgements.
Ediwheel is a new and commonly agreed e-commerce protocol, developed by the major tyre manufacturers to communicate on a business-to-business basis with their trade customers. By conforming to Ediwheel, MAM's AEB will be compatible with any major European tyre manufacturer and tyre importer that has adopted this standard.
Online tyre retailer Blackcircles has appointed Unipart Automotive as its preferred parts supplier. As part of the new partnership it will promote the Unipart brand and product range to its network enabling the garages to tap into better pricing on parts which can be passed on to customers. Revenue is reportedly up 40 per cent this year while visitors to its website are said to have increased by 55 per cent.
The partnership agreement also has benefits in terms of customer confidence, a key area for online businesses. Under the new deal, Unipart will conduct a 10-point quality check, on behalf of Blackcircles.com, for all garages within the network, which will provide a mark of excellence designed to create a new consumer confidence and encourage greater use of independent garages.
Mike Welch, managing director of Blackcircles.com, said: “In Unipart we are partnering with a proven and trusted name that will enable us to support our garage relationships across the UK at a crucial time for the industry. Block Exemption creates an excellent opportunity that will ultimately benefit consumers. We are confident that this new deal will increase consumer confidence and highlight the many benefits of using local independent garages to the general public whilst educating people about Block Exemption.”
Unipart Automotive marketing director, Wendy Williamson, commented: “By sourcing our service products, the garages can be more confident about the quality they are offering their customers. This will increase customer satisfaction, generating higher sales for the garages involved.”
According to the company, Blackcircles.com has developed the largest network of fitting outlets in the UK during the course of the last six years and is currently recruiting more garages to join its UK network.
The Pirelli Scorpion Ice & Snow and ATR tyres have been ranked first in their respective categories by customers of US e-tailer TireRack.com. In addition, the latter was voted the highest performer among all-terrain tyres by a leading consumer magazine in their November 2008 issue.
The Scorpion ATR scored highly with consumers thanks to its “impressive handling dynamics in wet and dry conditions, cornering stability, noise and comfort, snow traction and its resistance to hydroplaning.” The tyre features a very aggressive symmetrical all-terrain tread, designed to optimise comfort and wear while keeping its all-terrain traction characteristics. The ATR’s special tread compound provides enhanced noise reduction, wear uniformity and aquaplaning resistance. The tyre is available in 15-24″ fitments, either as original equipment or replacement.
In recent years the online tyre market has swollen in size (as observed in other retailer sectors). Whilst the proportion of the total market controlled by this sector remains limited, the fact that the number of different e-tail platforms is continually proliferating means online sales could already account for as much as 3 per cent of the European replacement market. With this in mind, knowing more about how these businesses operate is of interest to everyone in the tyre trade.
The latest insight is that the average tyre offered for sale online costs consumers around £69.14, meaning the myth that ‘virtual’ margins are too thin to make business sense could be evaporating. However, the most commonly offered tyre online is characterised as a mid-range brand costing around £60. It seems making money online is all a question of business model.
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