It’s clearly not a tire for every dealer. And it’s obviously not a tire you’re going to keep in stock most of the year.
It’s a specialty tire, a true niche product. A hybrid created to deliver safe, reliable traction on snow, ice, slush and sleet, and handle extreme cold weather without a whimper all while delivering kids to school, taking mom to the grocery store and transporting dad to work.
For all the benefits today’s winter tire delivers, it remains a dealer’s toughest sell. Especially when the tire’s selling season can run hot and cold in the same week. And customers have been convinced all-season tires can do the same thing without the added hassles.
For a dealer to successfully handle winter tires, he’s got to be one-part psychic and one-part weather prognosticator a cross between Jeanne Dixon and Willard Scott ®€“ to both accurately predict stocking needs months in advance, and to anticipate day-to-day or week-to-week activity once the season kicks in. No snow, no sales.
Then, of course, there’s handling a market that’s plateauing, finding the right customers for winter tires, and then selling the tires.
The actual act of selling winter tires might be the most interesting. Offering winter tires can endear you to your customers; the safety issue being critical is enough to earn a customer’s trust.
But in the right climates, some customers who could obviously benefit by using winter tires just don’t see a need. Others are in your shop like clockwork to have theirs mounted.
Fickle, uncertain, ever-changing. Just like the weather they’re supposed to master.
Winter tire sales aren’t going to lead a dealer into the promised land of milk and honey. Depending on your source, winter tire sales make up somewhere around 5% of all retail passenger tire sales.
“I think in just about everything I’ve seen for 1999 statistics, that market segment is about 4%,” said Al Smoke, president of Vredestein Tires North America. While that number may seem small, ®€œthat’s quite an increase from the year before, and that’s something when you consider that most of the markets didn’t have a good year because they didn’t get a lot of bad weather,®€ Smoke noted.
Toyo Tire Corp.’s number is fairly close about 4.5% of all replacement passenger tires sales ®€“ according to the company.
Running in Place
One of the biggest traps the winter tire market can fall into is stagnation. With limited customer potential and no original equipment sales, the winter tire market isn’t exactly tearing up the market in the same way the light truck/SUV segment is.
What should really be the concern is whether or not the market has already reached its peak, and how long it has been there.
“We have seen a static market in winter tire sales for the past eight years,” said Earl Knoper, the senior vice president of marketing for Toyo. ®€œDue to location constraints of winter tires, the overall sales growth is slow. All winter tire sales are replacement sales, there’s no OE.®€
That same opinion is held at Bridgestone/Firestone, which also sees a motionless market.
“Yes, the winter tire market has stalled, predominantly because the use of these tires is dependent upon the weather,” said Phil Pasci, the director of consumer tire brands marketing for the Bridgestone/Firestone Tire Sales Co.
But while the market may have stalled, several tire companies agree that there is still room for growth within the market studless, larger sizes and more fragments.
“From an industrial outlook, it’s a stalled market, if you will,” said Mike Leverington, the director of marketing for Kumho. ®€œHowever, we see winter tires, as a category, as a very small but fast growing segment.
“I personally see areas of growth in what would be legitimate winter tires. But also a growth in the area of ice tires, not necessary for deep traction but for packed snow and ice.”
The luxury car and SUV ends of the marketplace also appear to offer growth potential.
“The market’s growth is in the upscale part of the market because people with fancier cars are more willing to spend the money,” Smoke said. ®€œThe luxury end of the market the 15- to 17-inch sizes ®€“ is where you’ll see some of the growth.®€
“One of the key areas for growth in the winter tire segment is in the largest growing facet of the auto industry the light truck/SUV market,” said Pasci. ®€œIn that market, we’re looking to expand our Winter Dueler line.®€
Another targeted growth segment in the market is in studless winter tires, which continues to expand, especially in those areas that don’t allow studded tires.
“We still expect to see growth in our studless tire line,” said Knoper. ®€œThe studless tire offers proven traction, lowered noise levels and excellent ride comfort compared to studded tires.
“Additionally, studless winter tires do not damage roadways,” said Knoper, noting that many states already ban or have heavy restrictions on studded tires, and many more are considering similar action.
A Little Help Here, Mother Nature?
Perhaps the major problem dealers face with winter tires is being able to predict sales especially in the summer ordering season when you’re trying to forecast future weather and anticipate potential sales. So much is predicated on how much snow falls, how cold its gets, and how long prime winter tire weather may last.
For example, this past winter wasn’t all that particularly harsh. Sure, there were the occasional storms, but they didn’t last for weeks on end and didn’t bring sustained heavy snowfalls or sub-freezing temperatures.
Temperatures were up, snowfall was down. But last year’s sluggishness will have little affect on what happens this year. If there are eight inches of snow on the ground by Halloween, dealerships will be packed with customers looking for the best winter tire.
“It’s been my experience living in a mid-Atlantic area that previous years’ weather doesn’t impact the next year’s sales,” said Leverington. ®€œYou only need one good early snow fall to drive sales.®€
Vredestein’s Smoke agrees, believing that no matter how much snow falls in February, if there isn’t white stuff on the ground before Christmas, sales will be slow.
“I think last year’s weather will affect sales for this coming year, unless we have some serious snow and we have it early,” Smoke said. ®€œIf dealers don’t get some weather by early December, you’ll see some regression in sales over the past year.
“And just about any kind of weather will help. If the snow comes early enough, it puts a thought into the customer’s mind that they might need winter tires.”
Unfortunately, some manufacturers are anticipating poor sales for the winter of 2000/2001, but are still hoping unpredictable winter weather will turn in their favor.
“Due to the mild winter we had last year, we do expect a slight decrease in manufacturer sales to dealers for this year,” said Knoper. ®€œWe anticipate a 30% decrease in overall winter tire sales from manufacturer to dealers, but one harsh winter will turn that around very quickly. ®€œUnfortunately, we can’t predict Mother Nature.®€
Targeting the Targeted Market
Clearly the winter tire market is region-specific. Dealers in Arizona, New Mexico and Florida probably aren’t basing their bottom lines on the number of winter tires they’re going to sell.
In the northern third of the country, however especially the less populated areas across the upper Midwest ®€“ solid preparation and a little weather luck can bring dealers a nice seasonal windfall.
At the same time, warns Smoke, dealers in some regions shouldn’t reject winter tire opportunities simply because it doesn’t snow much. Snowfalls in many southeastern states tend to come in quickly, and often bring mixes of freezing rain and sleet.
“We do 50% of our total business in the traditional winter markets,” Smoke said. ®€œCustomers in the snowbelt will buy winter tires.®€
As Smoke alluded to, for those dealers who do live and work in snowy, icy, colder regions, there are definitely customers that need to be targeted. Now, not everyone is going to buy winter tires. Some don’t want to deal with changeouts, and may not have the space to store four additional tires. Others bravely trust their old reliable all-seasons to get them through.
But there are still customers to be had. The question is: Has every potential retail customer already been sold?
“There is always potential for more business. New drivers are always entering the market, and people are constantly moving from hot to cold climates and vice versa,” said John Pecoraro, Cooper’s product marketing manager. ®€œAs new winter tire technology advances, existing winter tire customers need to be educated on these new developments and how products have improved and hopefully be convinced to buy them.®€
Other potentials exist with commercial fleets rental and lease vehicles, company cars, utility fleets, school fleets, and others that require reliable transport in even the toughest weather.
But if manufacturers and dealers are going to target customers, they’d better target the customers’ wallets, as well. Snow tires are a tough pill for drivers to swallow. They represent an added tire purchase, need to be changed in and out during the year (more expense) and need to be stored in warmer months (often another expense). To many consumers, the bottom line costs and inconveniences are too much for a set of tires that are driven for only a couple of months of the year.
Technological advances primarily in treadwear ®€“ have helped lengthen the “season” for winter tires, allowing consumers to leave them on longer without major detrimental effect to the tires. But fickle, price-sensitive consumers are squeezing the segment.
“We haven’t gone as far as possible in the winter market,” said Leverington. ®€œThe problem is that these tires are bought on the commodity level. If you don’t have the lowest price, people don’t want to buy them.®€
The technology of winter tires has improved radically. And it’s had to. Only a few years ago, the extra-soft compound winter tire delivered real snow and ice traction, but wore quickly when roadways were clear. As matching driving safety with enhanced tread life has become more of an issue, advances in compounding, siping and tread design have taken the winter tire to new levels.
New compound and tread design technology is changing the look of winter tires to one that is somewhat less aggressive in appearance, yet better in performance,” said Pecoraro.
One of the best innovations has been the use of silica in winter tire treads, creating a more advanced compound that provides better grip, a smoother ride and improved wear. But how much further can the winter tire progress?
“I think the main innovation has been the use of silica because it improves the quality of the product in many, many ways,” Smoke said. ®€œBut I don’t see anything else at this point that will have such a major impact on the market.®€
Bridgestone/Firestone is one such company that uses silica to provide added safety in its Blizzak WS-50, MZ-01, MZ-02 and Winter Dueler lines of winter tires. “We feel these products have the most innovative technology on the market today,” said Pasci.
Progress has also been made on another front, which has clearly helped to separate winter tires from their all-season cousins.
Developed by the Rubber Manufacturers Association and Rubber Association of Canada, the improved “M&S” industry standard and testing procedure for passenger and light truck tires, requires tires meet certain performance criteria before they can receive a ®€œmud and snow®€ rating. Those meeting the requirements can carry the new mountain/snowflake icon on their sidewalls.
“Our Toyo Observe line has met the new standards,” said Knoper. But that’s not all.
“Toyo has embarked on a revolutionary technique of using tens of thousands of walnut shell microbits in our Observe line. The walnut shell microbits are embedded in the tread for improved traction. As the tread rolls over the ice and snow, the microbits dig in. The result is an alternative to studded tires that is friendly to the environment and offers a quiet, smooth ride.”
The Art of Selling
When it comes to selling winter tires, education is the key. Perhaps more so than for any other tire type. But for these tires, customers are also the ones that need educating. They have to understand the benefits, and how much extra safety can be gained by using winter tires.
“The easiest way for a dealer to sell winter tires to a customer is to explain the need and the reason to have a dedicated winter tire,” Pasci said. ®€œWe also believe that it’s important to show the end-user the benefits. That is why we work to educate our dealers through ‘drive and learn’ events and other opportunities to learn about the product through first-hand experience.®€
In the end, it’s the dealer’s job to educate the customer on the handling, braking, control and performance advantages of winter tires. “Safety, I think, is the best way to approach the customer,” Smoke said. ®€œQuite simply these tires will perform better in winter conditions, whether it’s snow or ice or cold. The winter tire will perform much better than an all-season or summer tire.®€
Safety also counts at Cooper. “On an ongoing basis, emphasize the safety aspect,” Pecoraro suggested to dealers. ®€œSafety sells. Sell the features and benefits over a standard all-season tire. Snow tires are not for everyone, but consumers will know in a hurry when they need them and don’t have them.®€
Obviously, selling winter tires requires taking a different angle than other tires. But it’s important for a dealer to remember that you can’t fall into the one sales technique for every type of tire, or customer.
“It’s not an ultra-high performance sale,” said Leverington. ®€œIt’s not like you get the customer that has to have them, he gets what he wants, and buys them. With winter tires you have to sell the attributes and benefits of the tire.
For all the upside winter tires bring to the consumer, Leverington warns, “the downside is there are negative attributes. Especially if it doesn’t snow. The tires tend run hotter and vibrate more when there isn’t any snow.”
And that’s also something to keep in mind. Winter tires work best in winter conditions.
Perhaps the best strategy is a three-tier approach.
“We recommend that snow tires always be fitted in sets of four for optimum handling and traction,” said Knoper. ®€œSecondly, dealers should stress the importance of the safety features of snow tires.®€
And Knoper suggested dealers leverage the industry’s new M&S rating standard as a key selling point. “Educate consumers on the new performance standards. A combination of these points will not only educate the consumer, they will establish the dealer as a credible source for reliable, quality tires.” ®€′