Tires Dot Common: Michelin Sees 'Net as Next Stop in Tire Retailing - If Dealers Come Along - Tire Review Magazine

Tires Dot Common: Michelin Sees ‘Net as Next Stop in Tire Retailing – If Dealers Come Along

Michelin North America (MNA) has been on the leading edge of tiremaker involvement in B2C Internet services, first with its limited BFGoodrich Scorcher T/A sales effort in 2000, and now with its controversial Tire Advisor system available on AOL portal sites.

Pete Selleck, executive vice president and COO of MNA’s Michelin Americas Small Tire unit, sat down with Tire Review to discuss the concept behind Tire Advisor, the system’s successes and disappointments, how it has been received by Michelin dealers, the controversy behind Tire Advisor’s tire testing, and where Michelin sees the system heading in the future. The full text of this interview, with Selleck’s comments on other key issues, is available online at www.tirereview.com.

 

Where did the idea for Tire Advisor come from?
"It really came from two separate issues. We saw e-commerce coming, and that forced us to get creative and think about how the Internet was going to change tire buying. On the other side, as we analyzed our business and looked at strengths, weaknesses and opportunities, much of the feedback we received from consumers showed their dislike of the tire purchasing process. We feel we make a pretty darn good product, but consumers found tire buying to be confusing, unpleasant and time consuming."

Will you be expanding Tire Advisor into other online portals in the future?
"AOL brings millions and millions of eyeballs. We receive about 10,000 unique visitors on Tire Advisor each week. We have agreement with AOL that they will generate a certain amount of traffic, and we give them a quality tool in return. When they saw Tire Advisor, they were amazed. Most Internet tools that manufacturers put together are focused on trying to market for that manufacturer. In our case, if there is a level playing field, that’s fine. It’s in our interest for the consumer to truly understand the performance of the products.

"When we rolled this out to all levels of the company it was not well-received, particularly on the technical side of our company. The testing process we used showed that, in certain areas, some of our products did not receive the highest marks in every category. But we concluded that in order to improve ourselves and solve consumer concerns, it had to be that way.

"Ultimately, consumers would reject any model they felt was not giving them a totally truthful result. We tried to build this the way we would have built it if we were consumers and had no interest in the financial outcome."

Are users going through the process to the point where they are contacting a dealer about the tires they want?
"What’s working very well is a person progressing to the point where they land on the selection page, where they see what tires meet their specific criteria. That’s the first phase for us. The second phase is the customer quote portion. That has been a struggle for us because we’re trying to send a signal to our dealers that they have consumers out there who want to have an e-mail relationship with them.

"Most dealers who sell our products are eligible to be accessed on Tire Advisor. We have some areas where we’ve tried it and it’s worked beautifully, but we have some where it hasn’t worked yet. A lot of it has to do with a dealer’s ability to integrate this approach.

"We haven’t tried to detour consumers to us. The dealer has a role in this process, and consumers still need to have their tires installed. Consumers don’t just want a request for quote. They want live information, live pricing and live availability. We’ve built the site with this in mind and opened it up for dealers to get involved.

"The request-for-quote portion of the site is not an end in and of itself. It’s a step. Consumers want to have multiple ways to navigate through a purchasing process. Most often, they’re going to go online and do their research, print out the results and walk into a dealership to order tires. But we’re not trying to prescribe which specific route they need to go. We’re trying to open up more routes and put consumers in a position of greater satisfaction.

"What we’re trying to do is give the consumer enough information to understand a product that isn’t that complicated. We’re all learning. This is an interactive process, not a final product."

Is there a particular demographic that has really embraced this, or is it across the board?
"We’re finding that the significant demographic visiting the site is focused toward performance vehicles and light trucks, more so than the mass market vehicle population. We think the reason is that those types of consumers tend to do more research. It makes sense. We just didn’t know when we put Tire Advisor out there that we would be seeing this trend emerge."

Tire Advisor tests tires for various applications from multiple manufacturers. How do you handle the tire testing involved?
"We use an independent testing company. A separate company acquires the tires on the open market, sends them out to independent testing groups and then we have an independent group assemble the information at the end. So, it’s really hands off on our end. When we meet with the head of testing, we don’t know what the results will be. Actually, it’s a little bit nerve-wracking because you don’t know what’s going to happen."

Do you plan to introduce special services for the performance market?
"We know dealers out there who are really focused on the enthusiast. Tire Rack has been accomplishing some great things, and Discount Tire has its DiscountDirect site. And, they do a really nice job.

"What we tried to do is to create a tool that is more focused on the center of the market. The average person who goes to Tire Rack’s site and sees information on plus-sizing may be overwhelmed. So, we tried to make a very simple tool. There are other tools on the Internet that are better suited for somebody who really wants to customize."

As you have said, it’s an ongoing process. So, what’s next?
"Right now, when a user enters his or her vehicle information, there are 21 different tire segments that can be generated, depending on the vehicle, vehicle use and performance requirements. In the next release of Tire Advisor, which will come out this summer, we’ve increased the segmentation to 25. Most of those new segments are designed to refine price/performance differences.

"Our current version includes UTQG mileage ratings, and those are based on low-severity tests. On long-mileage tires, the results we were getting in testing didn’t correlate to feedback we were getting on our products and on our competitors’ products. So, for 80,000-mile tires, we added a high-severity wear test to the UTQG results.

"Low-severity wear is a good predictor of mileage in Texas because Texas has aggregates in its pavement that are softer. However, in South Carolina, where there is a much harder aggregate in the road, a high-severity wear test is the better predictor of potential mileage. We think that’s the right way to handle long-mileage tires. And, every year, we are going to look at the tests and try to improve them and make them more relevant to real-world conditions."

What will this mean in the future?
"Right now, we weigh the actual importance of performance criteria within each of the 21 sub-segments. In the future, we think consumers will be able to enter their zip codes and that the software will be able to change those weightings based on where the user is located.

"So, if you’re in Texas and are looking at long-mileage tires, it will give 100% of the treadwear criteria weight to the UTQG rating and zero to the high-severity test. It will also put lower weighting on snow handling and a higher weight on hydroplaning. This way, consumers will really get a more accurate rating for their particular needs."

What else are you considering?
"One thing we envision is the concept of a store rating system, and we’ve started talking to our dealers about this. The idea is to try to give consumers better information as to the quality of and the services offered at the point of sale. Consumers don’t make this kind of purchase very often, so they don’t know their market that well.

"We’d like good quality tire dealers to be able to reap an appropriate premium for the service they’re delivering today. Right now, they probably aren’t getting the extra premium that they deserve.

"Beyond that, we envision that consumers will be able to go online to select their tire and select their store, as well as find out if that tire is available at a given store, how long it will take to get there if it’s not already in stock, and what that dealer’s pricing is for that product. That will be extremely powerful for dealers. That technology exists today, but it requires that each store is online and that its inventory and pricing is visible. We think that’s what the consumer ultimately wants.

"We’re not trying to dictate where the industry is going, but we know it is going to change. We think the change will be beneficial for consumers, and for the dealers, retailers and distributors that are truly consumer focused.

"We recognize that there might be some players out there that may not want this change to take place. But our objective is not to protect poor performers. Our objective is to help the consumer."

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