In the past two years I have purchased four Goodyear-brand tires, in what I'd say were two drastically different transactions.
The first pair came after a flat tire and a quick search on Google Maps. A mom-and-pop tire shop in the Bronx offered me a range of options in a nonchalant patter, including the best and still pretty dope.
I went with the latter, and they were as advertised. So when it was time to replace the older two tires, I simply punched the make and model into Amazon. Two days later a UPS man rolled them up to my door (no box required). I drove the tires over to my local mechanicthe great Rohonand picked up the car after work.
Neither path was perfect. The mom-and-pop route ate up much of a Saturday and dinged me pretty heavily on price, as the salesman knew I was unlikely to comparison shop. Amazon, on the other hand, wouldn't have been much help in advising me on what to buy, had I not known what I wanted.
Sometime in the second quarter of the year, Goodyear plans to steer for the sweet spot in between with the launch of an e-commerce platform that will help customers find and buy the right tires and then deliver them to a nearby shop for installation.
Goodyear CEO Richard Kramer said the decision was pegged to the roughly 80 million millennials in the U.S., the youngest of whom are just now reaching driving age. We're sort of embracing what's going on, and that's the change in consumer shopping and buying habits, he said.
If all goes as planned, the online tire shop will corner some market shareand possibly some profit marginfor Goodyear by streamlining the purchasing process.
But it's not a riskless strategy. The Akron-based tire maker's gambit could run roughshod over its best sales staff: the thousands of small businesses, like that shop in the Bronx, that can easily nudge a customer from one manufacturer to another. Goodyear declined to break down how it will divvy up the revenue from each sale, though each job will carry an installation fee and a sales commission.
Robert Higginbotham, a senior research analyst at SunTrust Robinson Humphrey, noted that Good-year is the first major tire manufacturer to create a Web store and that some business partners remain skeptical.
The feedback from the dealer network seems to be pretty mixed, Mr. Higginbotham said. The less control they have at the point of sale, the less control they are going to have over their business, and the less power they have over economics.
About 20 percent of Goodyear's independent retailers have signed on since the company presented the plan at its annual dealer conference in Grapevine, Texas, on Jan. 26.
Everyone at that meeting got it, and what they got is that the shopper is changing, Mr. Kramer said. Anyone ignores that at their own peril.
The tire business, like that of prescription eyeglasses before Warby Parker and mattresses before Casper Sleep Inc., seems ripe for some Silicon Valley-style disruption. It's a hugely complicated pipeline of products. The next time you're near a car, take a look at the jumble of numbers and letters orbiting the black rubber and try to figure out what denotes a model, a size, a Gmail password, a proprietary chem-ical recipe for rubber, etc.
Those cryptic codes are necessary these days because the number of tires offered rolls on practically without end. Goodyear's tire-comparison engine, for example, breaks inventory into four categories: all-terrain, all-weather, winterwhich, frank-ly all seem like variations on the same thingand something called sport performance.
Within each category are also product lines marked by a seemingly arbitrary naming conventionan old trick from the mattress business.
Is Goodyear's Assurance tire better than the Eagle? And what about the Fierce Instinct? Is the Wrangler HT good enough at $159, or does one need to cough up $171 for the Wrangler SilentArmor?
Are you the kind of monster who would put your kid in a car without silent armor on its wheels?
Some of these tires are super; others are crap. They're all exceptional at confusing customers and getting them to spend exactly as much as they are willing and able tono less. It's a masterstroke of economics and marketing, and it works great in a network of fragmented dealers.
The poor sucker with a flat isn't likely to know one tire from another when he or she limps into the local shop or a franchise like Monro Muffler Brake Inc.let alone how much they should cost. The customer just makes a decision based on what he or she can afford and based on the dealer's advice about what to buy. It has long been thus.
But more and more consumers are doing their tire homework and ordering online, rather than waiting for a flat.
Goodyear said about 20 million customers digitally kicked the tires on its website last year, and the company estimates about 6 percent of tires purchased in the U.S. are now bought online.
Tire Rack Inc., a popular online retailer based in South Bend, Ind., does about $1 billion in business a year, according to Mr. Higginbotham. Amazon.com, meanwhile, is also bringing its scale to bear on the industry. It's currently selling 117 tires that would fit my vehicle, ranging from $60 apiece to $395. Almost half of them ship free with a Prime membership.
That's the market Goodyear is trying to stay ahead of. After all, Amazon slicing its margins to ribbons is far more of a threat than the ire of small-town tire jockeys.
Once you go down below a Monro Muffler or Pep Boys, you're not going to have a lot of e-commerce, Mr. Higginbotham said. That fragmented landscape, in a way, is going to be one of the opportunities for a manufacturer like Good-year.
The tire maker also has the benefit of geographic diversity. It gets slightly more than half of its revenue from outside the U.S. From that perspective, its new Web store will serve as a bit of R&Da startup, if you will.
Kyle Stock is a New York-based Bloomberg Businessweek associate editor who offers political analysis and commentary.