As we look ahead at 1996, the question is: What problems will confront the independent tire specialist and what new challenges will have to be met? I've been trying to keep up with predictions about market trends in retreading for more years than I care to remember, and I have come to the conclusion that, for the most part, predictions are meaningless to the average retreader.
In years when improvement has been forecast, some retreaders suffered declines. In years when a downturn was predicted, many retreaders reported big gains. The differences were not due to the predictions; they were due to the individual retreaders.
Just a short glance back over the past decade shows us that tremendous changes have taken place in the tire industry. The steady decline in the number of retreading shops from about 2,400 in 1985 to fewer than 1,400 today is cause for concern.
Some of the decrease may be due to the difficulty of constructing and operating retread plants in the face of more restrictive environmental, fire and building codes. The long life of the radial tire also has contributed to a soft market and a shortage of retreadable casings.
This pattern of change is likely to continue, and further erosion may result. Any hoped-for increase in retreading will be minimal at best. There appears to be greater potential for growth in section repairing.
The greatest challenge facing the retreader/tire specialist is keeping up with the speed of change. What role will the independent tire specialist play in a fast-changing market?
Traditionally, the tire business operated in a fairly structured manner that included a clear separation among the various types of retail outlets. But with the advent of non-traditional sales outlets-such as discount houses, warehouse clubs, departments stores and even supermarkets-the term ``tire specialist'' was redefined in the customer's mind, and the whole market changed.
The tire specialist now was faced with the problem of differentiation from the competition.
In most cases, the tire specialist succeeded in making a focus on customer service the distinguishing feature between himself and other sales channels. Various measures have confirmed the independent specialist as the unsurpassed link between tire manufacturer and consumer.
Still, it would be foolish to become complacent, because whether a retail tire outlet remains successful in the future rests largely with the consumer-and his decision about where to buy tires.
It should be stressed that most consumers are not all that aware of the difference between a tire specialist and any other type of sales outlet. Their interest in a product or service generally is limited to its ability to fulfill a particular need or desire.
Shopping for price has become increasingly common. Retailers that use attractive prices as their main draw-warehouse clubs, discount stores, factory outlets etc.-have grown rapidly. As long as the types and sizes of tires stayed simple and clear to anyone, the consumer could be reasonably sure of getting the right tire at the cheaper discount operation.
In recent years, though, the proliferation of sizes and types has made product knowledge, along with safety issues, more important in the selling of tires. The lack of knowledgeable salespeople has been a weak point of discount operations-which makes their presence imperative for the independent specialist.
The advances in tire technology over the past few years offer tire specialists an excellent opportunity to compete with and surpass the competition.
The performance tire market, for example, offers ideal opportunities for the specialist to provide detailed expert advice to the consumer, opening the door to not only a tire sale, but also to the possibility of ``trading up'' and additional wheel sales.
And don't expect the competition to sit still. Large retailers are used to strategic planning, and they have big budgets.
Warehouse clubs won't be repeating the mistakes of their early days. They will be offering customers an adequate range of service options at the point of sale.
For the independent tire dealer/retreader, the key to success in 1996 and beyond will be to develop and promote a sales and service ``package'' that is clearly based on and responds to the needs and desires of customers.