AKRON—John “Johnny G” Gamauf, former president of consumer aftermarket tire sales for Bridgestone/Firestone North American Tire, has come out of retirement to partner with German market research firm GfK Group in the firm's effort to launch a point-of-sale retail tire panel in the U.S.
GfK introduced its first retail tire panel in Germany 15 years ago, according to Dick Williams, vice president, consulting, automotive, GfK's Consumer Experiences division. Since then the firm has expanded to panels in various other markets, including parts of Europe, Asia Pacific, the Middle East and Africa.
Like those panels, the new U.S. version will collect point-of-sales data from dealers who sign up for the panel and deliver back aggregated monthly reports to give participating dealers an edge in understanding brand and features success, regional pricing, discounts and other key trends.
Mr. Gamauf serves in a consulting role on the project, which promises to provide tire retailers with “long-needed marketplace intelligence to help them grow profits,” according to GfK.
“Coming to the United States was a really good idea from our point of view, because it was our clients in Europe and around the world—the global tire companies—who said, 'We need this information in the United States market,'” Mr. Williams told Tire Business. “So they basically had already sort of given us the green light to go ahead. Our task was just to figure out how to do it.
“Since the United States is just a little bit bigger in terms of consumers and points of sale than they've got in Germany—or any other market, frankly, in the world—it's a little bit more difficult a task, which is why we brought Johnny G in. Because we needed somebody who not only knew who the retailers were but actually really knew those people well enough to pick up the phone and say, 'We want to come out and tell you about something.'”
Under Mr. Gamauf's leadership, Bridgestone/Firestone created its Affiliated Dealer Program, developing a network of thousands of consumer tire dealers. In addition, the company set sales records for replacement tires during his tenure.
Retired since 2008 after 39 years in the tire industry, Mr. Gamauf said he had trouble passing up the offer to work with GfK after he learned more about how the program works.
“Really, the bulk of information that is available today comes from the RMA, the Rubber Manufacturers Association, as far as how many units are sold or whatever,” he told Tire Business. “But nobody has sell-out information. Nobody has point-of-sale sell-out information.
“What does the average retailer sell a Goodyear Wrangler at in such-and-such size? How many run-flats are sold at an average retailer per month? Etc., etc.,” he continued. “All of a sudden, it opened up my eyes and I said, 'Wow, this is not only good for tire retailers, this is good for the tire industry, because we're kind of lagging behind.”
Mr. Gamauf said the data generated by aggregating retail sell-out data will allow dealers to see actual average selling prices of tires, as opposed to advertised prices. It also will benefit manufacturers.
“This will help the manufacturers start to look at trends and start to look at what's being sold in the marketplace vs. what they're trying to force down throats,” he said.
With Mr. Gamauf's help, GfK already has begun signing up dealerships in various markets across the U.S., and the firm is working to establish commitments from Goodyear and Bridgestone Americas to gather data from their respective company-owned stores. So far, Mr. Gamauf said, every dealer he's discussed the program with has signed up, and he hopes to hit about 500 locations by the end of May.
Hemet, Calif.-based Ramona Tire & Automotive Service Centers is one of the dealerships that already has signed up. Company Vice President Chris Wyborny said he is very excited for the opportunity to benchmark his firm's pricing strategies against its peers in the industry.
“You never really know if you're collecting all the margin that you should be or if you're leaving something on the table because you think you need to be more competitive,” he told Tire Business. “I'm very excited to get the data. I don't know what it's going to look like yet, but I think it's something that will benefit us greatly.”
Of course, in order to work, such a program needs dealers, dispersed geographically and by size. Neil Portnoy, managing director, retail and technology, GfK's Consumer Choices division, said that while he doesn't expect every U.S. tire retailer to participate, a minimum of 5 percent of the estimated 34,000 tire dealers in the U.S. are needed to provide an accurate view of the market.
There is no cost for dealers to participate in the program, which Mr. Portnoy said will be funded by tire makers, who can pay for the same reports. For their part, dealers must supply GfK only with sell-out data on a weekly basis, which Mr. Portnoy said requires little effort from them.
“Once they sign the contract and let us know who their point-of-sale provider is, whether it's ASA or MAM, we pick up the ball from there,” he said. “They give us permission to go to their software provider and give us their data.... It's basically seamless to the retailer, and then all they have to do is sit back and wait for the reports to come in.”
The caveat is that dealers must be able to supply the data electronically in order to participate.
While the idea of sharing data often makes tire dealers wary, Mr. Williams insisted that their information will remain private.
“The one thing that we have to do is honor the confidentiality and the integrity of the individual retailer's data so that nobody can go in and back-engineer that data, and find out, 'Oh, this is Tire Man's data,'” he said. “We want to make sure that never happens.”
Reports will drill down to the “lowest level of granularity possible regionally” without sacrificing that confidentiality, he said. Furthermore, access to the data is limited to participating dealers and tire manufacturers that purchase the reports.
“If you're a retailer, even in the channel and you're not in the program, you do not have access to the data,” Mr. Portnoy said. “The same is true if you're Walmart or Cosco. You can't buy the data from us.
“We don't sell it to retailers outside the channel, so it becomes this sort of club of independent tire dealers that are on the panel,” he added. “Those are the only people that have access to the data, and then of course the manufacturers that purchase it.”
GfK expects to have its panel completed by year-end with full reports—including data from dealers that stretch back to January 2014—being available to members in the first quarter of 2016. In the meantime, GfK is working to provide new sign-ups with other valuable information.
“What we're doing now for some of the regional chains as we are taking their data in and we are coding it to our code plan, is we are creating reports that we can go back to them and show them what's happening within their organization,” Mr. Portnoy said. “And we'll even break it down because we're getting full store data. We're getting more than just tires.
“We're getting tires, batteries, whatever they're selling including services, so we'll be able to look at the entire chain,” he continued. “Here's the percentage of sales in each one of those categories.... We're ready to start giving some insights back to the retailers and sort of prep them for what's going to be coming down the pipe for early 2016.”
According Mr. Portnoy, the firm hopes to use the data acquired from tire retailers to extrapolate a view of the entire U.S. tire market, allowing participating dealers to benchmark their performance on a regional and national level and to be able to better understand trends.
“We want that scanned data from each one of these retailers for each of their locations,” he said. “We provide insights back to each individual retailer about what's happening in their shops, and we compare it to the total market when we have it up and running.
“Are there brands or items that are really selling in the rest of the market that they're not carrying? Or what they are selling, are they selling it for the right average selling price?” he continued. “This data becomes what we call common currency between the retailers and manufacturers to make fact-based decisions from.”
Mr. Portnoy added that the practice is commonplace in the food and drug industries, as well as “a lot of other specialty channels like pet care and contact lenses,” and said he believes the program will be a game changer for the tire industry.
“Those retail manufacturers have had these data sets for many, many years to make fact-based decisions from,” he said.
“I think we are well-positioned now to provide the (tire) retailers, the manufacturers and the industry with these types of numbers so that everybody can have a common view of what's happening in the marketplace.”
Mr. Williams called the undertaking an extensive one. “It's a lot different than aggregating data, dumping it on someone's desk and letting them deal with it.”
Mr. Portnoy said GfK will put together a team of industry experts to deliver reports, explain the methodology to dealers and “add that real market sense to the data and not just spit out the data saying why they believe certain things are happening in the marketplace.”
While this panel will focus on the retail side of the tire business, Messrs. Portnoy and Williams said a version for commercial dealers is possible in the future.
GfK said it is one of the world's leading research companies, with approximately 13,000 experts “working to discover new insights into the way people live, think and shop” in more than 100 markets. In 2012, the firm's sales amounted to $1.62 billion (U.S.).
To find out more about the program and Gfk, visit its website, gfk.com/us.