HiQ to anticipate tyre labelling in network developments
Industry observers are calling the European Union’s tyre labelling legislation, due to come into force on 1 November 2012, one of the biggest changes in the tyre industry for 50 years. Summing up the effect of the change on the consumer, vice president of Goodyear Dunlop EU Consumer Business Unit Mark Brickhill told Tyres & Accessories last year: “for the first time the industry is going to be required to give the consumer clear information in a standard set of KPIs [key performance indicators] from a standard set of tests, and something that is very complex – and sometimes confusing – for the consumer is going to be hugely enlightened.” Yet few tyre retailers have had much to say on the subject so far.
Considering the pointy end of this legislation will certainly be felt at the point of sale, HiQ marketing manager Geraldine McGovern argues that: “Retailers need to wake up because we are not seeing any activation of this legislation from anybody else. It is empowering the consumer and we welcome it.” McGovern and retail director Peter Tye talked Tyres & Accessories through the ways in which HiQ is taking on the implementation challenges early, including a £500,000 investment in education over the next year and a half that the network hopes will help to “create a memorable tyre shopping experience for millions of motorists.” While labelling has provided a reason for accelerating changes to the tyre shopper’s retail experience at HiQ, the network is anticipating and implementing changes long before it will be required to present the EU tyre label at point of sale.
First and foremost, the HiQ network believes that the information contained on the label – ratings for fuel efficiency, wet grip and external noise – will be a catalyst for the introduction of an improved retail environment, in which further tyre characteristics can enter the conversation, enabling fitter and customer alike to have a reasoned discussion about which product is most suitable. While McGovern explains that she does not believe the tyre label will go far enough and that the network “would like more labelling action” to acknowledge a tyre’s relevance to varied applications and differing customer needs, she also sees these areas as potential conversation extenders in the retail environment.
For labelling to have this benefit for HiQ, McGovern acknowledges that the perception of tyre shops still has some way to go to match the “high street retail experience” that she has in mind. While HiQ hopes the tyre label will mirror the white goods retail industry, where consumers can clearly see how energy efficient different models are, while banishing jargon and assumption-based shopping at the same time, the network’s research suggests it will be up to retailers initially to help the consumer understand the label’s benefits and instigate seldom seen tyre shopping conversations. HiQ commissioned a survey involving 2,000 motorists through OnePoll, which showed 67 per cent of people wanting to know more about the benefits of tyre labelling law, despite 87 per cent of them not knowing what it was before HiQ explained. Even though labelling legislation has been granted coverage in national newspapers such as The Independent and The Guardian (see the relevant related news links below for further details on their coverage), education is going to a key factor in maximising its benefits.
Hence HiQ’s approach to implementation and the investment of half a million pounds: “We are the only fast fit network to welcome this legislation because like Mary Portas, our sole objective is to empower the consumer and give them higher levels of service,” claims Tye. “Our research tells us that British motorists are with us in wanting to understand how the legislation affects them as a consumer. That is why we are delighted to reveal our £500,000 education programme today.” The programme includes: point-of-sale tyre selectors at each of HiQ’s 150 centres; a retail guide to tyre labelling available via the HiQ website; network training facility HiQ Academy’s new ‘Tyre Expert’ programme, including tyre technical training, retail selling skills and a Tyre Labelling Certification module; Automotive Technician Accreditation (ATA) theory and practical assessments for all 700 technicians; and a telephone and video Mystery Shopping Programme including weekly telephone call recordings.
It was the tyre display stands that were one of the more striking elements of the HiQ retail vision, as demonstrated at the network’s Tyre Fort, Birmingham headquarters. In a space demonstrating the HiQ model reception – complete with reading materials such as the network’s new customer-facing magazine ‘Hi’, and low table to encourage a “more open feel when talking to customers” – the display features three levels of tyre, allowing them to be arranged visually in a “good, better, best” scheme from floor to ceiling, representing the brand segments, and allowing up to 15 different tyres to be displayed. The module allows the tyre label to be fitted to each tyre on show, and a small display allows additional information to be accessed. In the 75 HiQ stores in which the module is already used – “soon to be 100,” notes Tye – the display is being used to “tee up labelling” according to McGovern. Labels display star-rated performance characteristics and play up the technological aspects of the tyre – hopefully in a way that will encourage the customer to ask questions of the retail assistants.
At this point of course, there will be an increased opportunity to help the customer more accurately select the tyre based on technological and performance factors as well as price, a key goal of labelling legislation. McGovern says this implementation is therefore designed to provide the customer with more information and confidence at the point of sale, being designed from the point of view of “the world outside the tyre retailer”.
It is an understanding of the retail world that leads HiQ to what McGovern calls the second phase of work that will take place over the next two years, with the first steps “live in 2-3 months”, to supplement the brand’s initial steps, a phase that is designed to improve the customer’s experience of the HiQ brand online. According to McGovern, “60 per cent of people research online and purchase offline”, so HiQ will attempt to follow this trend by optimising its customer experience on the internet in addition to in store. This starts with the HiQ network of mini-sites, which will allow customers to access information and reviews on both the individual store and products – including services, such as MOTs.
McGovern says this change is partially a response to Google’s search engineering, which is making “recommendations” – such as links to the site, other internet users’ opinions in the form of online reviews, and social networking sites such as Twitter and Facebook – increasingly important. Not only will this allow for greater openness, with users driving conversations about products; it will also provide space for the information on the tyre label to be dropped in – in the form of a “living label” (i.e. not just a PDF of the tyre’s label) – in November 2012, ready for customers to access similar extensions to the data provided by the label as they will in tyre stores. In addition, HiQ mascot Bertie will provide a review for products, representing the tyre retail specialists found in-store.
“Motorists can expect Amazon style recommendation technology from HiQonline to support customer purchase decision support, an informative iPhone app and an educational radio campaign, later in the year,” McGovern explained. “The better educated motorists are, the better the chances of buying the right tyre because despite appearances, tyres differ greatly. That is why tyre labelling makes such sense and is why we are putting all of our efforts into welcoming it, in the most consumer driven way possible.”
While the product reviews will provide the opportunity for more discussion about tyres, Tyres & Accessories asked whether the centre reviews would drive competition internally between HiQ stores and whether this would be a desirable outcome. McGovern said that the “digital accountability” offered by the system should be a welcome challenge for franchisees: “Eighteen months ago, we would have been more dubious about being this open. We have very simple brand messages so it shouldn’t be difficult and our franchisees shouldn’t be scared. Our franchise partners are proud about what has been achieved and are very much up for the challenge.”
“300 stores in 2014”
Peter Tye characterises the HiQ network’s franchisees as confident and “proud of their achievements” in raising standards to the level currently seen. He sees the current project as being vital in getting the HiQ brand into a position from which to “lead the industry” – clearly something that has driven HiQ to develop its strategy in anticipating labelling. Of course, these strategies will only work if the people running the stores are willing to implement the changes, and the network’s management believes franchisees will want to attain this “industry-leading” position. Tye reasons that when franchisees saw evidence of sales increasing by “up to 25 per cent” as a result of improvements made to other stores in the network, they knew that investment would be a good decision.
And what if franchisees do not meet the standards the network requires? “Four centres have left the network this year, while nine have joined… the scale of the operation allows HiQ to let some go.” Even so, to double the network size over the next two years will be challenging. Tye responds, “300 is very ambitious… stretching but realistic… We have had a lot of interest from car dealerships wanting to diversify or raise the standards of their on-site services. They are attracted to the money in the aftermarket.” He also revealed that there are 17 new sites to go live in “the next few months”.
One example of the car dealership route comes in the form of Nissan and Ford approved dealer, J S Holmes Ltd in Wisbech, Cambridgeshire, where new franchisee Martin Holmes added a HiQ comprehensive car service facility to its business. Holmes said: “It is great for us to be linked to a national brand, giving us the opportunity to be competitive in the market. We have invested heavily…. Over the years we have established a very loyal customer base and we hope that by adding to our list of services, we can meet every motorists’ needs.”
Meanwhile two former car dealership bosses opened a new centre in Tunbridge Wells as part of a new business venture to increase HiQ’s prominence in Kent, eastern Sussex and Surrey. Tye said the duo’s experience in car dealerships would help HiQ develop its customer service initiatives.
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