Tire Review had the opportunity to connect with Riccardo Cichi, president and chief sales officer, North America, Bridgestone Americas, to take a deeper dive into the company’s new initiatives that will help boost its dealers’ profitability, as a followup to its “Today. Tomorrow. Together. We Thrive,” consumer tire meeting in November. The 30-year tire industry veteran is laser-focused on leading his team at Bridgestone in investing in technology, innovation and business solutions that will meet market demand and pave the way for a prosperous future for its dealers.
Through this executive interview, we bring you insights into how Bridgestone is helping its dealers better serve the last-mile delivery segment, convert more fleet customers and close more high-rim-diameter tire sales.
We also share the company’s on-going sustainability efforts and value proposition for its dealers aimed at helping them thrive in 2021 and beyond.
1. During the Bridgestone Consumer Tire Business virtual event earlier this month, you said “Q2 [2020] was one of the hardest quarters on record. While our outlook remains challenging, we’re optimistic that the worst of the crisis is behind us.” What do you foresee being the biggest challenges in 2021 that Bridgestone can turn into opportunities?
Obviously, 2020 has been a tough and challenging year without any doubt. But it gives us the opportunity to recalibrate, prioritize our investments and business and prepare for the future. So, it is the occasion to embrace innovation because we’ve seen a lot of that. We must work to understand the long-term impact of the pandemic on consumer behavior and invest in it — both in tires and mobility solutions that support this transforming consumer landscape. So, the biggest challenges for sure are related to the pandemic itself, but there is opportunity in the changes that come from it.
Where we try to capture the opportunities is in accelerating sustainable innovation, investing in digital transformation, serving the new vehicles, for example — Connected, Autonomous, Shared and Electrification (CASE) — and answering to new customer needs because customer behavior has changed with curbside drop-off to touchless offerings to catering to the safety measures that have been necessitated by the pandemic. We expect consumers will look for this same level of convenience and safety moving forward, even when the current crisis ends. So, implementing convenience-focused customer solutions will be critical for tire and auto dealers looking to maintain and grow their business in the long term, and then embracing all the digital world.
You have to be flexible and agile; we have to react. And now that has made us better. As we move into the future, there’ll be more changes. So, we have to adapt to that and capture the opportunities.
2. You also noted during the virtual event that, as a result of consumers’ expectations for convenience and one-day delivery, innovative businesses are reinventing solutions for the last-mile segment. Describe how Bridgestone is helping its dealers better serve the last-mile market (which you said has untapped potential, set to outpace the overall market by 22% through 2022), and attain incremental business growth.
On-demand, same-day delivery and the increasing preference of shoppers to have goods delivered to their home have resulted in a growing number of non-traditional fleets supporting the final step in the consumer purchase journey. So, since March, new types of businesses have been pressed to serve the customer through delivery and contact-free services. And, the expansion of last-mile delivery has only accelerated. As an industry, we need to create a seamless digital customer experience to meet this key emerging opportunity.
The last-mile delivery segment will be very important. So, it is important to spend time with customers to understand their pain points. And then, we can use the information to develop best-in-class solutions that will meet their needs and drive loyalty. Next year, we’re launching a single billing platform for fleets. We will migrate all fleet customers to our existing Bridgestone national account system to make it easier for the dealers to do business with us and capitalize more on these opportunities.
3. The growth of fleets means more vehicles in dealers’ locations needing tires and service. Detail how Bridgestone is helping its dealers convert more fleet customers.
Most consumers think of tires as a commoditized component of a vehicle, but, the reality is, tires are at the forefront of enabling an autonomous and connected future. So, for these fleets, lowering total cost of ownership (TCO) is critical and tire dealers and retailers will play a critical role in serving these fleets to promote efficiency and safety. That’s why they need to embrace this, and that’s why we’re providing tools to do that — leaning into telematics technology that can access tire health, optimize routes and track the efficiency and safety will be critical to capitalize on the expansion of this last-mile delivery segment. There’s a lot of opportunity to capture and win business in the small- to medium-sized fleet segment. We always talk about the big fleets, but what is really growing is the small- to medium-size fleets, especially in light truck.
4. You indicated that growth in the high-rim-diameter segment is expected to outpace overall market rebound as early as next year. By 2023, you also noted that 43% of VIO (vehicles in operation) is expected to fit into the high-rim-diameter segment. How will Bridgestone products help dealers close more sales in this growing segment?
The car parc is moving toward the high-rim-diameter tires and Bridgestone is a key player in the OE business. So, on top of supplying the OE tires for the first and second replacement, this also includes a lot of [tires for] electric vehicles, for example. So, we’re innovating the product portfolio in order to capture the demand coming from the consumer with the right size and technologically advanced products.
5. How many new OE fitments do you project to be on the near horizon for Bridgestone, particularly in the premium CUV and SUV segment, typically with 20-in and up tires, which will help your dealers yield more replacement tire sales?
We know that there is more brand loyalty for high-rim-diameter tires than non-high-rim diameter tires. So, that’s why we have to be selective. Light trucks and SUVs are projected to be 78% of the total market in 2025. And, high-rim-diameter tires will grow to over 70% of the market, with 20-inch tires specifically capturing 23% of the market by 2025. So, obviously, we have our partners; we have relationships that go back many, many years, but we’re being selective in the models that we’re fitting, always trying to target technological innovations because that’s a differentiator.
6. You indicated that traditional brick and mortar retailers are seeing greater than 15% of tire revenues coming from online sales. With the accelerating growth of online shopping, explain how Bridgestone’s Tire Connect eCommerce platform can help build dealers’ online store front and capture their share of online tire sales.
For us, Tire Connect is a great tool and asset. In addition to the e-commerce solutions, Tire Connect’s in-store sales solutions have been making counter staffs’ lives easier for close to five years now, and now we’ve added the ability to order tires from your wholesale distributor directly from within the Tire Connect in-store solution.
Second, is the CFNA (Credit First National Association) integration. The CFNA card is a preferred method for many of our customers to build customer loyalty and grow transaction size when selling tires in store. Now, customers can use their CFNA card as a payment method when shopping for tires on your Tire Connect-enabled website.
“We continue to use all the assets and leverage them so that our dealers can capture all of those opportunities and we can co-create value together.”
-Riccardo Cichi
Third, is automotive services [which are] are critical for many of our customers to generate leads and offer a contactless service request. Tire Connect develops a simple-to-use and extremely efficient solution to achieve both of these goals while combining it with our industry-leading tire commerce solution.
For 2021, we’re also introducing a brand-new, completely automated sales chat solution for our clients’ website. This artificial intelligence-powered sales assistant will provide a simple way for your website visitors to interact with your business and help convert them into customers.
7. Looking at the big picture, summarize how Bridgestone is “helping lead a global revolution in mobility with advanced solutions for a world in motion,” especially in the areas of sustainability, which you said is a strategic differentiator.
Sustainability is embedded in Bridgestone’s mission. Our sustainability journey, and serving society with superior quality, impacts every aspect of our business and the overall value we’re creating for society and our company. Some of the main areas we’re working on are accelerating our adoption of the circular economy — from natural rubber, all the way to the finished product, to reducing CO2 emissions — across the product life cycle and the entire value chain.
8. Summarize in a few key phrases Bridgestone’s value proposition for its customers and how it is helping grow tire dealers’ business.
It comes down to innovation and technology in all of its forms. So, whether it be product innovation or technology that we use across the board, data is becoming more and more important. We need to use this data in order to capture the opportunities and be more efficient…from Tire Navigator (geo-marketing feature that indicates which cars are being sold in a certain radius) to Treadnet (tire ordering feature) to Tire Connect (eCommerce platform), [these] are several tools that we’re offering our dealers so they can capture all of these opportunities. This is how we’re helping grow the business of our tire dealers, who are really our partners. We can only do this if we work together, co-creating value.
9. One in four vehicles on the road in the Americas today is equipped with a Bridgestone or Firestone tire. That’s quite an impressive amount of brand loyalty. Comment on how that milestone “drives” business decisions to keep that number strong and growing.
Our goal is to continue to have OE also because we’ve built many relationships over the years, on the consumer side, on the commercial side, on the off-the-road side, on the ag side and on the motorcycle side. We believe OE is fundamental for us to develop these technologically advanced products in order to separate ourselves from our competitors, but then we’re also working on the mobility side.
What other things can we do? How can we capture this data to make sure we’re efficient, to make sure that we are sustainable and follow all the things that we’d like to do as we move forward in our strategy and our vision? We continue to use all the assets and leverage them so that our dealers can capture all of those opportunities and we can co-create value together.
To read the full January 2021 issue, click here.
