NEW YORK—German market research firm GfK Group has recruited Bridgestone Americas—along with its network of 2,200-plus U.S. tire and automotive service centers—as a charter data provider for GfK's U.S. point-of-sale tire panel, which it expects to launch next spring.
In joining the program as a data provider, Bridgestone also will be among the first subscribers to GfK's nationwide tire data it collects through the program. GfK also has recruited more than 1,000 independent U.S. tire stores to the panel and is continuing to expand its membership.
“Throughout my career in consumer packaged goods (CPG), point-of-sale data and national trends information were essential drivers of our decision-making for product development, marketing and promotion,” said TJ Higgins, president, integrated consumer tire group, Bridgestone Americas, in a press release.
“We see the GfK point-of-sale panel and database as game changers for the tire industry. We are excited to work with GfK on this project as they have a track record of building the highest quality panels and making marketplaces more efficient.”
Founded in 1934 in Nuremberg, Germany, GfK introduced its first retail tire panel in Germany 16 years ago and has since expanded its tire panels to 29 countries. Like previous panels GfK has established, the U.S. version will collect point-of-sale sell-out data from retailers and deliver back aggregated reports to participating dealers, detailing key sales metrics like trends in national and regional pricing and the performance of various brands in the market.
“Basically, the reason we need a panel is that we want to report the size and the trends in the independent tire channel,” Neil Portnoy, managing director of GfK's POS tracking business in North America, told Tire Business. “It's never really been measured before.”
Last year the firm hired John Gamauf, former president of consumer aftermarket sales for Bridgestone/Firestone North American Tire, in a consulting role on its U.S. tire panel project. As Messrs. Gamauf and Portnoy have toured across 39 states speaking with dealers and manufacturers, one common truth stands out—that the size and scope of the market is largely an unknown.
“Nobody has a clue as to how big is the channel in terms of dollars, how many tires (are sold), what are the brand shares, what are the trends with all of the attributes like speed rating and rim diameter,” Mr. Portnoy said. “Nobody has any idea.
“And what's happening with the tire industry on the manufacturers' side is we're seeing more and more guys coming in from the consumer package goods space, where they don't make a decision without data.... They need data, and we're uniquely positioned to supply this data.”
There is no fee required to join the program or receive market reports, Mr. Portnoy said, adding that manufacturers will fund the program by being able to purchase custom and syndicated reports from the tire panel database. The revenue from this will both cover the cost of running the panel and allow tire makers to make more informed decisions about product development, promotional support, inventory management and marketing based on sell-through trends.
For Mr. Gamauf, a 39-year veteran of the tire industry who began his career as a tire changer, today's problems aren't dissimilar from those he dealt with over the course of his career.
“When I retired eight-and-a-half years ago, high rim-diameter tires was the biggest problem we had at Bridgestone as far as back orders go,” he said. “...It's still the number one problem.”
Mr. Gamauf added that Bridgestone is hardly the only manufacturer suffering from these issues, and it's because the tire business, in some ways, is “20 or 30 years” behind other industries.
Turning to the grocery industry as an example, Mr. Gamauf said that as items are scanned during checkout, product manufacturers receive instant notifications, providing them with an accurate, up-to-date view of changing market demand and allowing them to adjust their own production schedules accordingly.
“In the tire business, when we ship tire dealers four tires, we have no idea whether they went on a car at 2 o'clock that afternoon or they're sitting in somebody's warehouse for six months, and that's the problem,” Mr. Gamauf said.
Little progress has been made in this area, due in large part to dealer mistrust of tire makers, but Mr. Gamauf hopes to bridge the gap in a way that's beneficial for both parties.
“I want to talk to dealers about sell-out data, because that's what really matters,” he said. “What I say to them is let's get out of the tire world for a minute and talk about sharing data with manufacturers,” he said. “It's a very sensitive issue...but other industries have been doing it for a long time.”
As part of its program, GfK doesn't collect customer or costing information from dealers—only data on the brands they're selling, including SKU numbers, and the dollar amount dealers actually collect at the point of sale.
Messrs. Gamauf and Portnoy emphasized that individual dealership data are not presented in the reports it gives back to dealers. Rather, data goes into a “hopper,” Mr. Portnoy said, serving as “raw material” to extrapolate the tire market as a whole and give dealers syndicated reports designed to help them benchmark and optimize their performance.
“Nobody's gonna see your data,” Mr. Gamauf said. “I'm not the IRS. I'm not a Russian spy. Trust me.... Let's catch up with the grocery stores, with pet care and electronics and everything else. Let's bring the tire industry into the year 2016.”
Though the panel has yet to officially launch, participants are already seeing benefits in the form of monthly business reports GfK is providing them in the interim.
“Whether you've got one shop, or 10 shops or 75 shops, what we give back to the dealers is an analysis of their business, and many of these guys have never seen their data organized in a way that drives value for them,” Mr. Portnoy said. “...What we're doing is we're taking the data, coding it with all our attributes and giving it back to the dealer, and what they're learning about their business even before we bring them the panel information is pretty powerful stuff.”
Mr. Portnoy added that participants have been uncovering ways to use the data “that we've never even thought about.”
Though the group is not yet disclosing names of member dealerships, he cited a number of examples of dealers gaining new insight into their businesses through GfK's reports.
In one such instance, a dealer got a good deal on a large amount of low priced tires, but he couldn't sell them quick enough.
“They hung around for 60, 90, 120 days, and instead of selling high margin tires he was stuck selling these tires that looked like a good deal,” Mr. Portnoy said. “Because he saw the data that showed him his sales were down once he bought those tires, it quantified that it was a bad decision to buy tires on price alone.”
In another instance, a tire dealer with 10 stores discovered a new store manager wasn't selling tires at the correct price/mix, and overall store sales were suffering as a result. “They probably would've caught it, but it might have taken them six months or a year,” Mr. Gamauf said.
Once the panel is up-and-running, dealers also will be able to compare their performance to the market on a national level, and the reports are only expected to get more detailed and narrower in scope as time goes on.
“If we keep recruiting, sometime next year we'll be able to get down to the census regions, and then we'll have to look to see where we need coverage to report at the state level,” Mr. Portnoy said. “After that it's anybody's guess.”
Using dealer sell-out data, GfK will be able to report information such as best-selling rim diameters, average retail selling price and brand share (both unit and dollar sales), among other things. Such information will allow everyone in the program to analyze the market in new ways, Mr. Portnoy said.
In addition to sell-out data for tires, GfK hopes for its panel reports to eventually include information on automotive maintenance and repair services—including average costs and number of jobs—as well as causal data, such as the impact of rebates and promotions in the marketplace.
To reach this reporter: wschertz@ crain.com; 330-865-6148