Point S looks to build on success

SAN DIEGO — It was almost like being part of the audience at the taping of an Oprah show: All the dealers who attended the Point S Tire & Automotive Service USA learned that they were eligible to receive two flat-screen television monitors for each of their locations.

At no cost to them.

The vertical-hanging monitors — or digital posters, as Point S calls them — not only will replace typical point-of-sale (POS) signage, but also will allow the independent dealer cooperative to help boost merchandising for individual dealers by controlling the messaging. So, if a spring sale starts on April 1 with one of its preferred vendors, for example, the Point S platform will begin to advertise the sale on that date on those digital posters.

"We will be able to make sure (the digital posters) are all time-lapsed and don't get stale," Point S COO Clint Young said. "If a dealer gets busy and forgets to put up the promotional ads, they don't have to worry about it now.

"We are providing the content for the dealer, so the dealer can focus on the customer," Mr. Young said. "Anything we can do to make life easier for them, we will."

That was part of the message the Point S executive team left with dealers during the annual Point S Owners Meeting, held at San Diego's Paradise Point Resort, Feb. 20-22. A record number of 500-plus dealers, guests and vendors attended the event.

The monitors, available to the dealers now, will come with two device setups, two wall mounts and an installation guide.

In addition, Point S is offering dealers the opportunity to acquire a more traditional TV for their lobby. Should dealers choose to get a TV (or use one of their own) and its associated content, the cost is $50 per month. Point S will provide some content, and dealers will be able to provide other region-specific content for customers. This package is expected to be ready by the end of the second quarter.

"Technology is so critical to us," Point S CEO Walter Lybeck told the dealers.

"What we're looking to do is save you cost, give you opportunity for sales, give you the opportunity for new customers, and help you run your business with tools that are optional to you," he said. "These are designed by independents, for independents."

The new merchandise push is part of the Point S strategic plan to eclipse a record-setting 2019. According to Mr. Lybeck and his team:

Sales growth topped 10%; same store sales increased; and the network grew by 19 locations and into four new states. Point S now has 225 outlets in 22 states.

Sales in October 2019 were the group's best monthly performance by far, helping the group to a record final quarter.

Point S said tire unit sales rose 7%; passenger and light truck tire sales increased 9%; ag/OTR/ATV sales were up 5%; and winter units increased 26%.

The banner year meant the co-op redistributed $5.5 million to the dealers within the group. The big year was helped, Mr. Lybeck said, by a robust promotion schedule with its preferred partners — Goodyear, Hankook Tire America Corp., Nokian Tyres P.L.C. and Toyo Tire USA Corp.

Toyo became a preferred partner last year after its decades-old exclusive distribution agreement with Les Schwab Tire Centers Inc. expired in early 2019.

"Everything kind of aligned for us," Mr. Lybeck told Tire Business. "Members really, really dove on to Toyo, our new preferred vendor. That didn't negatively impact relationships anywhere else. ... The large part of that was our promotional activity with vendors and new partnerships."

Eric Gill, president and CEO of Gill's Point S Tire & Auto, a 17-location dealership in Oregon, said the alignment of the membership, the board and the staff fueled the growth.

"In the past, we had tensions, or a member pulling this way or the board pulling that way," Mr. Gill said. "Today, we're all kind of rowing in the same direction. When you got organization doing that, it's a lot easier to achieve whatever it is that you're trying to achieve. There's not one person out there trying to hit a home run. You've got five people all hitting nice grounders, executing."

Mr. Gill discussed three ways fellow dealers can increase revenue through Point S tools.

• Online selling.

While he called it "a scary proposition," Mr. Gill told dealers that his locations sold almost 800 units — 300 more than its goal — by selling tires online, accounting for $136,000 in sales and $50,00 in gross profit. He said 68% of those who bought online were new customers.

"Margin compression is real, and we have to be ready to find ways to add more sales," Mr. Gill said. "Online sales will continue to grow. ... We will be ready and are ready to transact online with our consumer."

Point S only provides the platform for online tire-buying; it directs the sale to the individual dealer.

"If we can maintain our market share, give a customer one-stop shopping online with us — if they ship (the tires) to our store, get them to service their vehicle with us, we can continue that cycle in a traditional manner. We want to give that consumer the ability to interact with us online as opposed to feeling like they have to go to a Tire Rack or an Amazon or whatever the flavor of the month is. That's where I see Point S giving us the tools to executive on the modern platform of retail."

• Promise-plus warranty.

Mr. Gill said he sold the warranty to nearly 78% of his customers. Even though he dropped the price of the warranty, he netted $20,000 in revenue.

"Most customers, when it's explained correctly, feel real good about it," Mr. Gill said.

The warranty is good at any Point S location. "We really sell it and honor it as a no-haggle warranty."

• All-Trac platform.

Point S has been rolling out this proprietary platform throughout the last year. All-Trac provides support both for the stores and its customers throughout the purchasing cycle. Among its capabilities are service bay management; scheduling; customer communication; and retention.

Steve Helstrom, director of information technology and operations at Point S, said designing the platform in-house "means we know, understand and emphasize what's important when acquiring, communicating and following up with customers."

Although his locations have been using the platform for just a week, Mr. Gill said the platform is easy to use.

"It is a customer communication and internal communication tool," Mr. Gill said. "It's all about communication and efficiencies. We're being asked to do more with less resources. All of this will should both save you labor and have more efficient and consistent communication with customers."

Point S also reported success with its "No Stress with Point S" marketing initiative that was launched last year. According to Devin Barr, Point S MBT marketing director, the tagline has become part of the group's DNA, prominent in stores, commercials and with customers.

"We were able to translate what stress-free tire buying and car maintenance means into our markets with true, authentic strategies," Mr. Barr said.

During the meeting, Point S hosted a handful of prospective dealers representing 10 more locations. The co-ops expect several will join.

"Our member discrimination has been ratchet up," Mr. Young said, pointing out the co-op looks for quality rather than quantity.

"Point S has high-quality retail organization," Mr. Lybeck said, "and we want to keep it that way."

Next year, Point S will hold its annual meeting Feb. 17-21 in Hawaii.

"We have lofty goals in supporting our existing members and pushing our footprint into new markets," Mr. Lybeck said. "The trajectory of our success doesn't have a finish line, (and) 2019 was fabulous year for our co-op. But, now, it's something we need to learn from, grow and beat in 2020."