TORONTO—Think e-commerce is strictly for products like computers, music CDs, books and clothes? Then think again. More people are shopping online for automotive products, including tires, than anything else, attendees at the Tire Dealers Association of Canada's Convention and Trade show learned Jan. 27.
Tire Association of North America Executive Vice President David Poisson, a featured speaker at the three-day Toronto gathering, said more than 18 million people have shopped online for automobiles and aftermarket parts—far more than the number of consumers who've shopped there for other products.
"Customers are looking for your business on the Internet right now," he told dealers. But most consumers aren't successful in their search, he said, due to the fact that tire dealer presence on the Internet is all but nonexistent.
Meanwhile, the number of buyers shopping online for automotive products is growing exponentially, he said. Among Internet users who buy online, 9 million make some sort of an Internet purchase at least once each month—and more than one in 10 does so at the rate of once a week.
Some segments of the auto industry are doing all they can to capitalize on this e-commerce trend, Mr. Poisson said. The National Automobile Dealers Association, representing some 19,500 franchised auto dealers, has reported that 75 percent of its members now have Web sites. And of those auto dealers lacking a Web site, almost half told the association they planned to launch one within the next six months.
Yet despite the fact that consumers are shopping online in record numbers, the automotive aftermarket in general is "vastly under-represented" on the Internet, Mr. Poisson said.
Only one automotive aftermarket business, Chicago-based J.C. Whitney Inc., made the list of the top 100 Internet retailers—and it came in at No. 71.
"Like nature, the Internet abhors a vacuum," Mr. Poisson said. "Unless automotive aftermarket retailers act—other Internet retailers could and probably will try to capture a significant share of the burgeoning automotive market on the Internet.
"We very well could see companies like Amazon.com...flexing their considerable electronic muscle in an effort to capture a share of the automotive aftermarket...," he said.
Mr. Poisson said he was not suggesting that all a tire dealer needs to do is create a Web site and then wait for the money to roll in. "Unfortunately, it isn't that easy, especially for small and medium-sized businesses."
A recent study by Forrester Research, an Internet consulting firm in Cambridge, Mass., suggests that small- and medium-sized brick-and-mortar retail establishments control about 50 percent of retail sales. On the Internet, however, those small retailers account for barely 9 percent of retail sales—and that share is forecast to shrink to 6 percent by 2002, Mr. Poisson said.
So what should small independent tire dealerships do in order to be competitive on the 'Net?
Mr. Poisson said dealers should understand that small businesses must work together to be successful on the Web. Stand-alone Web sites hosted by small companies rarely prove successful, he said, because they don't command the amount of customer traffic of the sites run by larger competitors.
"Rather than striking off on your own," he advised dealers, "create a Web site in conjunction with other businesses in your area—better yet, with your suppliers.
"We rapidly are reaching the point where buyers are going to the Web not only to find information about tires, but also to identify a place to purchase them," he said.
"We used to partner to form buying groups. Now, with the advent of the Internet, why shouldn't we partner to form selling groups?" he asked.
But not all technological advances involve selling over the Internet, Mr. Poisson added.
Other technology helpful in automating and improving the operations of a typical tire dealership include:
Database marketing software capable of telling exactly what customers bought and when, thereby making it easier for dealers to decide what and when to market to them;
Online and other types of information sources that reduce time spent while technicians search through technical manuals or parts catalogs. "Online services that gather information and put it at your fingertips can actually pay for themselves much sooner than you think," Mr. Poisson said;
Supply chain management technology that links you to manufacturers, distributors and other suppliers can help you run much leaner in-stock positions, without your having to sacrifice what you need when you need it, he said.
Sales tracking and forecasting software can help you better understand what sells when, to what types of customers and from which shelves.
"You can see if a simple merchandising adjustment can improve sales, who your best salesmen are, what they sell best and so on."
"The Internet allows consumers literally to click past tire stores," he continued. "Without supply chain management and other computer-based management tools, your ability to operate efficiently and, therefore, as profitably as possible will be that much more difficult to achieve.
"Bottom line: Your business needs these tools every bit as much as the ones you keep in your service bays."