RICHMOND HILL, Ontario—While more consumers are becoming comfortable with—and in many cases finding they prefer—the online shopping experience, tire dealers are still catching up to this reality.
One of the hottest words in online consumer marketing today is “conversion”—i.e., finding ways to turn website visitors into paying customers. And while many industries are performing well in this area, widespread adoption of online tire price quoting and selling capabilities within the tire and automotive service industries has yet to occur.
That's not to say the capabilities aren't there. Software providers in recent years have developed solutions designed to allow dealers to provide consumers with online tire price quoting and buying via their websites. One of the newest players in the market, Richmond Hill-based software developer TireConnect Systems, believes its own TireConnect tool will be a game changer.
Founded by software industry veteran George Silagadze in 2012, TireConnect uses a “single line of code” uploaded to a dealer's website to generate a module that provides automatic integration with a dealer's preferred wholesale distributors. The firm offers both online and in-store versions of the tool as well as e-commerce options.
TireConnect has established itself quickly in the Canadian market, so far boasting a 100-percent retention rate and a client base of about a dozen regional and national distributors and nearly 500 retail customers, according to the company. In addition, it recently inked a deal with Midas Canada Inc. that will bring its store count to well over 600.
This year, the company entered the U.S. market and has partnered with about a dozen wholesalers.
According to Chance Harrington, TireConnect's vice president of business development, most tire dealers today—both in the U.S. and Canada—are not using their websites in a way that converts online shoppers effectively into real customers.
“They might have a tire finder that is not tied into live inventory, if they have one at all,” he told Tire Business. “If they don't, then really you're just sending people to a website that tells you how long you've been in business, that it was your grandfather's business and now junior is in charge.”
Such a website, he added, has no real value to a company as an asset, but TireConnect is hoping to give dealers an opportunity to turn it into one.
“The only reason a customer is on your website if you're a tire guy is to buy some tires, and that's the bottom line,” Mr. Silagadze said. “You can say to yourself whatever you want, but that's the only reason why they're there—not to look at your pictures or read about your company.
“If you're not (providing consumers with options) you're missing out,” he continued. “If you spent time and money on the website, it just makes sense for you to give your customer the ability to actually, at the very least, quote tires and, we think, purchase tires.”
TireConnect has its roots in E-Axis Inc., a mobile app developer that Mr. Silagadze founded in 2001. A decade later he came up with the idea for TireConnect after a problematic tire-buying experience.
“In 2012, I was buying tires for my wife's car, and it was somewhat of a painful process,” he told Tire Business. “It was the usual thing—you start collecting some phone numbers for local dealers, you call them up. It was the busy time in Canada as well, where you get a lot of that seasonal switchover happening.”
Several dealers, he said, weren't even able to offer him a price quote on tires right away. “It just got me thinking, and through just asking around and talking to some people I realized there's a lot of uniqueness to the tire market in terms of how the supply chain is set up,” he said. “And there's a lot of sort of technical reasons why anyone who sells tires can't really do it efficiently, I would say.”
Mr. Silagadze saw the challenge as a business opportunity. He created the TireConnect entity and began allocating resources from E-Axis to begin building a platform that would allow tire dealers to sell tires via their websites.
The company soon launched a testing phase with several dealers in Canada, including its first big client, Tirecraft Group. Through discussions with the company, he realized it had similar problems to retail dealers—supply chain integration and access to supplier inventory—but on a larger scale.
“The challenge for them was they wanted to build a new website for their organization, and they just couldn't do it essentially because, again, all of the issues prevented them from doing anything functional when it comes to selling tires on their website,” Mr. Silagadze said. “Some dealers didn't want to display pricing. Some did. There were also related services alongside tires.”
Over the course of about six months, the firm built a tool to fit Tirecraft's needs, and the TireConnect platform was born.
Through TireConnect, Mr. Harrington said small dealers have an opportunity to compete in the online marketplace.
“We provide a way for that small guy to keep in the game,” he said. “What the Internet has done to a retailer—and I'm not talking tires; now I'm talking any kind of product—is that it's simply a commodity if it can be bought online.
“Consumers are doing their research online and they're getting more and more comfortable with buying online, and as the small retailer, there's no way to compete with that until we came along with this product—which throws them a lifeline to get back into the game.”
According to Mr. Silagadze, the system is “completely plug-and-play” and takes little time to set up. “Essentially, you can go from not having any tire presence on your website to selling tires and competing with the Tire Racks of the world in about an hour,” he said.
TireConnect is continuously adding wholesale partners to its platform, and in addition to having automatic access to their inventory, dealers can add in stock tire inventory by exporting an Excel file with part numbers, quantity and pricing information from their own inventory systems.
Dealers have complete control over their own tire pricing, with the ability to set and adjust prices based on margin percentage or fixed dollar amounts added to the wholesale price. One pricing structure can be applied to a dealer's entire offering, or they can define pricing differently based on brand, category and size.
Tires aren't the only thing the TireConnect tool is designed to help dealers sell. One of the primary advantages of the tool is that it allows dealers to customize it with a variety of up-sell options, ranging from lifetime tire rotations and road-hazard warranty coverage to oil change specials, seasonal tire storage and alignment services.
Dealers have complete control over pricing for all of these options as well.
“Based on the feedback we've had, it helps in maximizing revenue,” Mr. Silagadze said. “...Tires often times are almost a loss leader, so you want to make sure you're maximizing the other services you offer.”
Frank Bongiovanni, president of Superior Tire & Auto Inc., a tire retail system franchisor in Ontario, told Tire Business the group began using TireConnect's online tire quote tool in October 2014 for its dealer base before upgrading in March to online sales. Over the last two-and-a-half months, Superior Tire customers have purchased more than 50 sets of tires using the tool and generated “hundreds and hundreds” of online quotes, according to Mr. Bongiovanni.
“I think it's great,” he said. “I've even had some customers call me to tell me the program works really well, it's really easy to use and we're really happy with it.”
Mr. Bongiovanni said it offers several up-sell options through the tool, including tire storage and alignments.
“Honestly, I don't know if its 50 percent or maybe a little less than 50 percent (of consumers) that do purchase additional services there on the spot, but the big bonus of course is once the customers do make the purchase and they do come into the shop then it gives the counter people the opportunity to service their vehicle,” he said.
“...It cannot hurt at all, and if anything a customer is going through the checkout process and they're saying, 'Oh, they do alignments. Oh good, I haven't had my alignment checked in a couple years. Maybe I should get them to check it.' It's certainly a big advantage.”
Dealers using the e-commerce feature can optionally set it up so that consumers pay a deposit online and complete the purchase in-store, a method that Mr. Harrington said many people find less intimidating.
“Fifty dollars or $100 is not scary to buy online, whereas if you're buying a set of tires that are $900, giving them your credit card is sometimes a stretch for consumers,” he said.
Active manufacturer rebates are automatically displayed through the tool, while dealers can upload their own rebate and coupon offers. These discounts are available to both consumers shopping online and counter salespeople using the in-store version of TireConnect.
Employees can benefit from the firm's in-store tire price quoting tool as well.
“Each supplier has access to some sort of online system where they can check prices, but now the retailer at the counter has to log...into each individual supplier's system, punch in the same information for every tire, pull up the tires, figure out which tires he wants to quote for the customer and then manually add all the mark-ups, all the labor costs and then dictate it while you're waiting on the phone,” Mr. Silagadze said.
“With our tool, it aggregates all the supplier inventory into one place so you search once. It automatically sorts based on price and availability.... From there you can just email the quote directly to the customer or just print it and give it to them.”
All customer interactions within TireConnect are captured in real-time and available to participating dealers via a TireConnect dealer portal.
According to Mr. Silagadze, TireConnect takes care of the entire setup process and assists dealers in learning how to make changes within the system.
“We take a completely guided approach,” he said. “Once the account is set up, we do an on-the-phone training session that takes 20 minutes or so—we set it up with them basically—and as we do that, we show them how to change it down the road if they want to change it.”
Dealers who use the e-commerce option offered by TireConnect need not worry about merchant accounts, he added. Rather, dealers provide TireConnect with bank account information during the setup process and payments are sent directly into their accounts after a seven-day period.
“They can do their own refunds, they can see all the financials, they have access to everything,” Mr. Silagadze noted. “We just help get them up and running.”
In addition, TireConnect monitors to see which dealers are actively using the tool and which aren't, Mr. Harrington said.
“If they're not using the tool, we proactively go out and ask them, 'You're not using this very much. Is there an issue?' And nine times out of 10 there's some technical issue they didn't quite get. We correct it for them and then we see the usage jump up automatically.”
Messrs. Harrington and Silagadze said the firm also asks its clientele for feedback and quickly implements new features based on their suggestions.
Mr. Silagadze said the pricing structure for TireConnect is competitive, with an initial start-up fee of $150 (U.S. and Canadian) and a base rate of $69.95 per month for the online tire quote tool. E-commerce capabilities can be added for a small monthly fee. The program requires no long-term contracts and dealers can cancel any time after an initial three-month period.
To reach this reporter: [email protected]; 330-865-6148; Twitter: @Will_Schertz