IN UNION THERE IS STRENGTH
Tire distribution networks
In Italy too, tire dealers are progressively moving towards the creation of outlets organized within professional multi-service networks, some of which belong to some of the world's largest tire manufacturers
The economic crisis, as we all know too well, has changed many aspects of our daily lives. These changes, as expected, didn’t spare the tire market either. Nowadays many specialist retailers have to cope not only with economic problems, but also with an increasingly aggressive competition as well as well-informed customers who often approach the dealer after having carefully studied on the internet what they believe to be the best product and point of sale for them.
Hence, the need to be present online with a regularly updated site to inform the public about their company, products and services. Services that may go well beyond those traditionally linked to tires since a growing number of end customers appreciate the opportunity to be able to rely on a single sales service centre that is not limited to tire services, but that ("while we're here ...") can also deal with and solve several other issues with their cars, what insiders call a "one stop shop". A whole sum of new challenges that – considering the rather difficult economic situation – can prove to be quite arduous for anyone to tackle alone.
The growing presence of hi-tech vehicles is contributing to a gradual redefinition of the market, as these require increasingly sophisticated and expensive equipment. Not to mention the growing popularity of EFTPOS terminals and the increasing market presence of large multinational companies along with corporate and rental fleets who need reliable quality standards and set costs.
"Gone are the days when all a tire dealer had to do was limited to purchasing and reselling the product," were the insightful words uttered, back in 1999, by the then managing director of Goodyear Italy Antonio Corsi, upon opening a SuperService Centre. "Today our dealer is called upon to make a qualitative leap if he wants to compete on the market from a leading position. This means moving from a mere product philosophy to a product-service concept offering each client a personalized service".
Since then, the need to join forces has become increasingly felt. It is now a common opinion that it is better to be supported by a large company such as a tire manufacturer. Raffaele Beltrami, Euromaster Italia’s head of Marketing and communications, has no doubts about it: “the market is clearly moving in the direction of networks”. Although, he points out, "the Italian market is still a bit immature".
Not all networks are the same
Immature yet complex. If, on the one hand, we find "official networks" such as Continental’s BestDriver, Pirelli’s Driver, Michelin’s Euromaster, Bridgestone’s FirstStop and Goodyear/Dunlop’s SuperService – created through a strict selection of retailers interested in extending their activities beyond tire services alone -, on the other we also find so-called "indirect networks" bringing together companies from the technical assistance sector with the aim of creating buying groups with the purpose of providing both tires and additional services at convenient prices. Moreover, somewhere in the middle, we also find "direct franchising" networks or organized tire retailers offering, for the most part, "second line tire brands" and a narrower range of services compared with “official networks”.
Focusing on “official networks” we cannot help but notice how, for some time now, tire manufacturers have focused their attention on this venue of business. A bit like what happens between a car makers and its dealerships. Unlike car dealerships, though, these tire networks are not "mono-mandatory" meaning they do not sell only the tires of the manufacturer they represent. On the contrary, they sell and fit just about any tire on the market, performing, in many cases, also light repair works (wiring, oil change, headlights, brakes, suspension, steering etc.), turning into what can be considered a small repair workshops, which, as previously mentioned, is an important attraction for end customers.
Mind you, the business too will have its benefits. «Joining a network means having access to a package of turnkey opportunities designed to increase customer traffic in the store, optimize business management and, equally important, access training courses on both products and equipment as well as on business management and sales strategies", says Marco Prosdocimi, SuperService retail manager.
Despite the changes taking place in the market, though, there is no reason to think that these transformations must be total. "In the medium-term I cannot see any severe contrasts between official networks and specialist retailers," says Federico Tebaldini, CEO of CDG-ONE, "but it is clear that inevitably the first are likely to have a stronger market awareness stemming from the popularity of the companies they represent”.
Not just tires
Nowadays, pulling in the same direction is becoming increasingly important. Recent surveys indicate that maintenance and repair works, just to mention a few, contribute more to the profitability of the business an just relying on sales volumes, and will probably continue to do so in the future. If on the one hand, the aging of the national fleet is in fact encouraging motorists to rely on independent workshops, on the other, in contrast with the general framework of the sector, multi-service centers such as those belonging to “official networks” are also experiencing a sudden surge in business.
Considering the current threats and opportunities, First Stop has identified a number of targeted solutions, such as expanding the portfolio of products, working on repositioning the brand on the market and brand communication. «The password is: diversification. We need to offer our customers more in terms of services, "says Davide Ivac, manager of First Stop Retail, Bridgestone Europe-South Region. "We must, therefore, redefine and promote our image".
Perhaps, more importantly though, like car dealerships, official tire networks too, provide regular training for their staff. Training programs specifically organized by their reference brands. In so doing, the staff will be able to do much more than simply indicating tire sizes and prices, advising professionally the customers as to which tires best meet their needs. After all, customer satisfaction is the common goal of all the parties involved: the tire manufacturer, the network and every single retail store.
CDG Network (Consulenti Di Guida)
In their quest to improve the quality of Yokohama and Magri Gomme dealers, the Segema group created, back in October 2010, CDG-ONE, a "direct network" which started its activity in March of the following year with two levels of partnerships and approximately 150 CDG-ONE members (premium level) with access to all available contents, and a further 650 CDG-Service partners (basic level) dealing with car rental companies only.
Not surprisingly, these have traditionally been the main source of business for CDG which, after gaining enough experience in these areas, went on to gradually extend its range of interest to the transport sector with its Service Fleet program for remote tire management. Still in 2016, CDG opened a new training centre together with Mondolfo Ferro, a company specialized in workshop equipment.
Moreover, in the spring of 2016 CDG-ONE signed an agreement with Kwik Fit - one of the world’s largest independent specialists and experts in automotive parts repair - to create a new network that should, according to plans, open over 200 Kwik Fit centres in Italy by 2026. CDG-ONE thus becomes master franchise of Kwik Fit and will oversee the management and activities of all its affiliated stores while Kwik Fit will offer training and support in terms of marketing and technology.
Franchising Service Company (Continental group) was the first Italian company to develop a tire sales network in franchising. The network includes more than 1,000 affiliates in Italy divided into an official network such as Best Drive (created in 2006) and two direct networks like TAC (focused on Continental and Barum) and Pneus Expert (Uniroyal).
Along with the ubiquity of the outlets, the experience of the dealers that run them is a guarantee of quality and client satisfaction. Selected according to specific parameters, network partners are constantly being trained by ContiAcademy professionals through a variety of different training courses.
Thanks to significant investments in IT technology, F.S.C. has a cutting edge IT framework designed to ensure and certify data exchange between its dealers and customer fleets. This web-based service and dedicated web portal enhances consistency of service and interoperability with different IT systems. Based on an extensive experience and knowledge of the industry, the network provides unique features with a simple and effective interface for both the user and the computer system of the client company.
In the summer of 2016, Driver, Pirelli’s tire network, celebrated its 100th new dealer (about 400 including Driver Center direct franchising) since the program was introduced in 2011 with the aim to turn a mere tire fitter into a true 360° auto service centre.
At the end of 2015, the network announced a new tire replacement service directly at the customer’s home or in the workshop with a valet service. Just click on www.driveronthego.it and reserve the purchase and tire replacement directly from home or the office, or request the Car Valet service whereby experienced staff will collect the car, take it to the nearest Driver workshop and bring it back afterwards.
The initiative isn’t just meant to save the customer’s time. The service is in fact free of charge (except the additional Car Valet service) : the customer pays only for the tire fitting costs, as if performed in a workshop.
Currently present in 17 European countries with over 2,400 points of sale (171 of them in Italy, where it has been present since 2010) and over 2500 roadside assistance vehicles, Euromaster was founded in the early 1990s through a merger of several groups of dealers owned by Michelin. From 2010 onwards, the network's growth strategy is based on a formula strongly oriented to support the dealer’s sell out.
As well as offering some of the top tire brands on the market and numerous light repair services, Euromaster offers a series of 12 checks (brake fluid level, front and rear brake pads, front and rear brake discs, wipers, washer fluid, engine oil level, vehicle geometry, compliance and tire wear, spare wheel tire pressure, air conditioning, tire pressure monitoring system and shock absorbers), free of charge on all cars being serviced within the network’s centers. After a complete check-up, the customer receives a summary of the status of his/her vehicle and, if needed, may request Euromaster’s specialists to perform the necessary repair and maintenance work.
In addition, Euromaster consultants constantly monitor the partner centers throughout the country, providing daily support and guidance essential to correctly implement the network’s operating methods in the workshop, in greeting and welcoming the clients, marketing efforts as well as up-to-date and standardized local communication.
Created by Bridgestone in 1994, FirstStop has been present in Italy since 2002 with more than 170 outlets destined to become 262 by 2020. A “stress free” goal, they say, since quality comes first. Collaborations with realities such as Alcar, Autronica, Bosch, Repsol, Würth and Renault are further qualifying features for the network along with the many services dedicated to customers and retailers alike. This is the case, for example, of a new service called "TiChiamaFirstStop", a dedicated booking service performed through an external call centre, to better organize the agenda of the network partner and the client, approaching the latter in a professional manner and regulating the customer flow into the workshop. In 2016, the vast majority of affiliates have also activated the "RataFacileFirstStop" service, a simplified formula of deferred payment, from 3 to 10 installments and interest-free, made possible through a cash card and a valid ID and without tax credit on consumption, following the pattern set by Cofidis with its Pagodil service.
“The low opinion that Italian motorists have on workshops in general, along with one of the oldest national fleets (in 2016 the average age of vehicles was 9.4 years) and the fact that 75% of motorists expect to be able to receive the needed technical assistance in one place only ("one stop shop"), are all reasons why motorists prefer coming to us", says Davide Ivac, First Stop Retail manager, Bridgestone Europe-South Region.
A quarter of a century and no signs of slowing down. Born in 1992 Goodyear/Dunlop’s tire service network celebrates its first 25 years with an ever-expanding network that was further expanded in 2016 with 18 new centers, and a goal of reaching the number of 300 to 340 affiliates within a couple of years.
In addition to tire services, SuperService introduced numerous opportunities for the diversification of the business putting the automobile in the centre of the picture, starting with traditional tire fitting operations to complex interventions of Mechatronics. New tools and training programs have been created to turn the network’s centers into a reference point for mechanical assistance. A new SuperService network also passes through initiatives such as “Offerta Dedicata” which, in exchange for a greater loyalty to the company, supports its affiliates with services such as CRM for customer retention and a dedicated consultant, supporting the network’s partners in managing their store.
Furthermore, SuperService is also part of 4FleetEurope, which provides tire service to major rental fleets in Europe.