Online Tyre Sales Still a Mid Range Market

2nd October 2009 | 0 Comments
 
Online Tyre Sales Still a Mid Range Market

With 70 per cent of us now having access to the Internet, and consumers making an average of 2.1 virtual purchases a month, maintaining the right online presence is as important as ever. According to the 2009 Oxford Internet Survey, the two most common online activities are researching product purchases and actually buying them (about 80 per cent of web users having done each). However with a multitude of distractions out there in cyberspace, tyre businesses have developed complex e-marketing strategies designed to lure customers to their sites with low prices, before up-selling them onto more expensive products. Some of the clearest evidence to date shows that the Internet is an increasingly competitive mid-range market, not a budget bargain basement as some say.

Comparing online price monitoring data with the results of market research conducted by Encircle Marketing shows that national fast fits continue to be the most expensive places to buy, with tyres costing £86.22 between January and August 2009. No surprises there. The fact that tyres are cheapest at pure e-tailers (£65.91) on average, won’t surprise many either. In fact, with the exception of average prices at autocentres rising to meet those at car dealerships (£78.68 and £79.18 respectively) the pattern is pretty much the same as it was last year.

However, break down the figures by product segment and you can see that e-tailers increasingly operate across a relatively narrow pricing spectrum. Pure internet sellers’ lowest priced budget products average at £51.30 a tyre; mid range – £62.26; and premium – £73.82. Compare this with the national fast-fits that charge – budget £58.62; mid range – £74.03; and premium £111.13; and you can see that e-tailers pretty much only sell a lower mid-range price spectrum measuring £22.52 across. The fast fits’ pricing range, on the other hand is more than double (£52.21).

Amongst the e-tailers themselves there is, once again, a large range of price positioning. Kwik-Fit and National’s websites for example, while considerable cheaper than average branch prices, are actually equal or more expensive than market averages (incorporating prices from independents, regional, national, autocentre and garage chains). Looking specifically at the budget segment, it is particularly noticeable that blackcircles.com joins the high price group, charging more than both Kwik-Fit and National and costing £3.02 more per budget tyre than the market average.

The cheapest average price on the market was bestbuytyres.co.uk, which charged £43.86 for its budget tyres. National wins the most expensive average award, asking £90.94 each for its premium products.

Looking at the data broken down by speed rating reveals further evidence that e-tailers are focusing on the mid-market. Here, it is clear to see that V and H-rated tyres prices cost virtually the same. In May 2009 there was less than £1 per tyre difference between them. However, there is then a huge jump to the W/Y/Z sector where e-tail prices peaked at £102.86.

If any more evidence was needed, just look at the way the sites promote products. According to Encircle Marketing, almost half of e-tail recommendations were for mid-range products, compared to just 27 per cent in the market as a whole.

 

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Category: News, UK News