“It's the same size pie, but there are more slices,” he said. “This is a new distribution channel where the manufacturer may end up deciding where the priority lies. Let's face it, the competition out there is fierce.”
There is the danger that online sales may force tire dealers to become installation centers, according to Mr. Evankovich. “Manufacturers will get the sales and profits, and the installer gets the service and the liability,” he said.
Tire dealers must invest in online sales platforms in order to compete, according to Mr. Evankovich. “Online sales are here to stay, and tires are among the most researched products.”
Mr. Nicholson suggested that “adapt or die” should be every dealer's motto in the Internet age.
“You can benefit from the increased customer count, or refuse to adapt and potentially become extinct,” he said. “Consumers are increasingly looking to buy things online, and if you can't figure out how to leverage that, you might not have a bright future.”
Meanwhile, the picture isn't all rosy for online retailers, according to Mr. Nicholson. They too suffer from increased competition, and they don't have the benefit of offering tires and auto service to offset reduced profits. They also face possible brand offering limitations and competition for available service providers.
At the same time, consumers benefit from a simple shopping process in online retailing — from research to purchase, according to Mr. Evankovich, noting that they also avoid possible hassles and intimidation from salespeople.
But consumers lose out in not having the expert advice from tire technicians who know which tires best meet their needs, he said. There is no substitute for this, and the dealers who can best provide this advice are best positioned to survive in the new market landscape.
Mr. Evankovich illustrated his point with a story about a friend with a 2014 Mercedes. This particular model must have rear tires with a recommended pressure of 47 psi, he said.A tire technician at his friend's local dealership caught a potentially deadly error —that the replacement tires the friend bought online took 44 psi — and steered the friend to the correct set of tires for the vehicle.
“Not one website identified this problem,” Mr. Evankovich noted.
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