BLOOMINGDALE, Ill. (April 13, 2005) — Bridgestone/Firestone (BFS) is planning to give its Firestone Tire & Service Centers a new name and look and upgraded service portfolio.
It's a strategic move designed to solidify relationships with existing customers and attract new ones in the face of strengthening competiton, BFS said in a recent presentation to financial analysts.
Although the new name is not yet set in stone, the company is using Firestone Complete Auto Care as its working title, according to J.B. Davis, manager, brand strategy for Bridgestone/Firestone, who has been in charge of the firm's retail brand positioning study for most of the past year.
“I would say the name is set in wood,” Mr. Davis told Tire Business. “What's important is that we get it right.” BFS already has used the name in several press releases since late 2004.
BFS recently told the gathering of investment analysts that the firm intends to roll out the new name and identity this year, but the exact timing is still being worked out, pending more consumer research being conducted on possible new store designs and formats, Mr. Davis said.
“When we're ready,” he said, “you'll know it. It will be widespread.”
As for the timing of the project, “we believe in fixing the roof when it's sunny,” he added.
BFS operates 1,445 Firestone Tire & Service Centers across the U.S. and has plans to add more than 100 new stores in the next four years, according to the analysts' presentation made recently by Larry J. Magee, chairman, CEO and president of BFS Retail & Commercial Operations L.L.C. (BFRC).
Along with the new name, BFS intends to remodel all of the stores to make them more inviting to today's changing consumer tastes.
“We've had the same basic store format for 85 years,” Mr. Davis said. “We're studying a number of new store formats. What's important is making the store experience relevant.”
That said, Mr. Davis referred to some recent consumer studies that showed getting a car repaired is a bigger hassle than going to traffic court, renewing a driver's license or filling out tax returns.
“We're the dentists of retail,” he joked. “Car care for the consumer is low involvement, but at the same time highly complex.
“By the time customers come into a retail store today,” he said, “they've been over-messaged and overloaded with information.... Their brains hurt. We have to find a way to make the store experience more positive.”
Unless plans change dramatically, BFRC will base the design of new stores on what it calls the “three shop concept”—maintenance, repair and tires, Mr. Magee's presentation said.
BFS, which calls itself the world's largest automotive service retailer, did not disclose what it expects to spend to convert the stores and/or open new ones.
The program does not affect BFS's other retail chains—Tires Plus or ExpertTire—or its GCR Tire Centers commercial tire network in the U.S. and Canada. The Firestone Mastercare automotive service program likely will continue as part of the new identity, Mr. Davis said, although all elements of the retail branding package are up for review.
Mr. Magee's presentation stated BFS sees its retail operations serving two roles—as a retailer generating profits and customer loyalty on its own accord and as a support function for the manufacturing business. The retail unit sells the firm's brands, supports brand postioning and new launches and supports the family channel strategy.
BFS Retail & Commercial represents 36 percent of Bridgestone Americas Holding Inc.'s annual sales, or about $3.3 billion in 2004. BFS sold 16.6 million passenger and light truck tires through its BFRC outlets, with more than two-thirds of those being sold through the Firestone retail stores.
The company's three-shop concept is based on each of the three areas of business—tires, repair and maintenance—generating about a third of sales. In a typical store, this would entail having four bays dedicated to repair, four to maintenance and two to tires, according to the presentation. Auto service represents 65 percent of sales at Firestone retail stores.
The service business generated more than half of BFRC's earnings last year, with private label credit card business representing about a fourth and the tire business a fifth, the presentation shows.
One proposed new exterior look—white lettering on red and blue background—is designed to communicate warmth to consumers. The more open interior space is designed to help build brand awareness and support the three shop concept. Stand-alone sales desks are meant to provide a private but customer-friendly atmosphere.
Referring to the growing competition in the vehicle maintenance and repair business, BFRC noted that “differentiation” is the key to success. Knowing who your customer is is fundamental, but understanding your best customers and what keeps them coming back is essential, it said.
From a competitor standpoint, BFRC regards new car dealers the greatest challenge because of the “captive customer base” established through the first three years of vehicle ownership. This relationship is strengthened by the extended warranty contracts offered more and more by new car dealerships.
BFRC sees opportunity in the automotive aftermarket because of three key factors: it is highly fragmented (BFRC is considered the market leader with only 2 percent of service revenues); an estimated $60 billion of car care needs are not attended to annually; and there is no single strong.