Goodyear expanding direct online tyre sales across Europe
Tyres & Accessories interviews David Anckaert, vice president Commercial Europe at The Goodyear Tire & Rubber Company
Goodyear has been marketing its passenger car tyres in Germany directly to end users for fitting by a listed partner for roughly six months. And for years before that there has been a noticeable trend towards online selling. Following on from our online preview article, Tyres & Accessories’ German group publication Neue Reifenzeitung interviewed David Anckaert, vice president Commercial Europe at The Goodyear Tire & Rubber Company and began by asking: is it too early to draw initial conclusions? And where’s next?
David Anckaert: The e-commerce platform is developing in line with our expectations. We are convinced that it is right to be present as a premium brand with an online offer and are receiving very positive feedback from consumers who use this offer. Although the proportion of sales via this channel is rather low compared to other channels, we are very satisfied with the insights we gained with the pilot in Germany. We are now using this to extend the offer to other markets in Europe.
Tyres & Accessories: Why did you start in Germany? What makes Germany so special for Goodyear in terms of direct sales? Is it because the market is easy to tap in to? Or is it just the opposite and the special challenge that the German market presents, together with its great potential for learning and growth?
DA: We chose Germany as a pilot market because it is the largest market for tyres in Europe. We also have a large dealer network here. The fact that the tyre business in Germany is highly seasonal with summer and winter was another reason for us to start here. In addition, e-commerce in Germany is an advancing trend as consumer behaviour and growth reinforce each other.
T&A: In the meantime, your direct sales activities have also begun in other markets, such as Poland. Which markets are these, and what is the ranking or order of roll-out?
DA: Following the pilot project in Germany, we are gradually expanding the programme to the rest of Europe, starting with Poland in April. Other markets are currently being evaluated. As with the pilot in Germany, the available dealer network plays a particularly important role here, in addition to basic consumer behaviour in the online sector, because the concept is clearly focused on leveraging market potential together with our partners and generating growth accordingly. At this point in time, we cannot name any dates for other countries.
T&A: Are there plans to distribute your other brands directly in the future, especially Dunlop and Fulda?
DA: We started the online shop with Goodyear products first. Whenever there is no Goodyear tire available, we currently recommend Dunlop tyres.
T&A: What is the ultimate goal of direct sales? Is it just to provide a special offer for the growing millennial customer group who prefer to shop online? What role does making money play in this?
DA: Goodyear has launched the e-commerce solution in response to changing consumer behaviour and the ongoing shift to e-commerce. It complements our existing distribution channels and explicitly focuses on close cooperation with our trading partners, to whom we are sending additional customers. Our focus is on gathering experience in good time, incorporating it into further development and thus growing step by step.
T&A: How must a brand be positioned so that it functions successfully in B2C direct sales, what must such a brand stand for?
DA: A strong brand is based on historical values and success. This pays off both in retail and online. As a brand, it is important to be present where people are looking for it. This means that the brand must cover the various channels, because the buying process has long since ceased to be linear. The most important and relevant (because it is the fastest) channels are new media.
We have built up a high level of credibility over many years through the outstanding performance and quality of our products and through our innovative power. Brand ambassadors such as JP Kraemer and our success in motor sports underpin this. We illustrate our future orientation with our concept tyres, which we present to the public every year with great success.
T&A: A look at developments in recent years suggests that the B2C distribution of tyres – through manufacturers or specialised online retailers – in established markets is not growing steadily but tends to stagnate. What are Goodyear’s forecasts, especially with regard to the German market?
DA: Market forecasts assume that e-commerce will remain the fastest growing distribution channel in the tyre industry (with a growth rate of 6%), and that it is also advancing particularly fast in Germany. Currently, 55 per cent of tyre buyers obtain information about the range of products on offer online before buying. Around 15 per cent already buy via the Internet today. Given this starting position, there is a need to be present on this channel to ensure continuous growth.
T&A: Why does Goodyear, as a manufacturer, need to market its tyres directly and by itself to the end user? Wouldn’t it be an advantage to rely on the competence, presence and proximity to the customer of your own dealer organizations, which are particularly large in Germany with the Goodyear Dunlop Handels Systeme (GDHS) and over 900 locations?
DA: You said it! We as a manufacturer should rely on the competence and presence of our trade partners. And this is exactly what we do with our approach. What makes it special is the combination of our respective strengths in the interest of the end consumer – this is how we build on mutual success.
We assume that e-commerce will remain the fastest growing sales channel in the tyre industry. Both manufacturers and dealers must therefore embrace this trend in order to continue to grow profitably in the future. Consumers buy online differently than offline and must therefore be approached in a new way. Goodyear sees this particular programme as an opportunity to facilitate the buying process for consumers seeking a seamless online buying experience, while adding value to local dealers as Goodyear e-commerce partners.
T&A: Outside your own more or less controlled distribution, criticism of your actions has sometimes been voiced in recent months. What do you reply to tyre dealers who ask themselves why they should remain loyal to their supplier – i.e. Goodyear – even though the latter is now positioning itself as a direct competitor?
DA: The opposite is the case. The programme aims to bring additional customers to the dealers rather than bypassing them. We work with our partners to enable consumers to buy their tyres online through the Goodyear website. In doing so, together with our partners, we bind future online buyers for the long term – with advice, trust and security. As Goodyear, we take care of the platform, advertising and the transaction; and our dealer network takes care of fitting and service, i.e. the customer experience on site. So, everyone in the value chain can benefit and consumers have an additional, convenient buying option. The solution therefore helps our partners to serve these online shoppers and thus benefit from the growth market.
T&A: When an end user buys in your shop, which warehouse do the tyres come from and how does the logistics to the tyre dealer selected for on-site fitting work? Do you also work together with wholesale partners? With whom? Or do the tyres all come from your warehouse in Philippsburg? How is that organised?
DA: Goodyear supplies the tyres from its own stock. This is to ensure that the process is as easy as possible for all parties involved.
T&A: Why should an installation partner be listed with you? What is his advantage? How exactly is the remuneration for the fitting service and to what extent does the partner receive a share of the proceeds from the sale of the tyre?
DA: Our partners benefit in that we bring them additional customers through the Goodyear e-commerce platform. Customers who inform themselves online and who prefer to buy online directly from the manufacturer. Our experience, for example in the USA, shows that around 70 per cent of consumers who are directed to a dealer through the Goodyear e-commerce program are new customers. This is a real opportunity for the retail partners, as they can retain these customers in the long term through the local customer experience and thus expand their business. Our e-commerce partners are compensated for the transaction, which includes installation work, without incurring marketing costs for customer acquisition, retention, after-sales support or inventory management. This model gives the dealer the opportunity to position himself as a trustworthy car service partner vis-à-vis the consumer.