VIP Tire Merchandising Update
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- Tracey Chambers
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1 VIP Tire Merchandising Update
2 VIP Tire Merchandising Update Industry Facts Where consumers buy What consumers buy Tire sizes evolution O.E. trends & impact Tire Programs Core Brands / Distributors Replenishment stocking & strategy OPs maximizing effectiveness Tires Misc Share the Wealth!
3 Industry Facts Distribution Channels Independent Dealers are the dominant channel for consumer tires. Mass Merchandisers are losing share while Auto Dealerships gain. 100% 90% 80% 70% 60% 50% 40% 2.5% 7.5% 2.0% 7.5% 2.5% 7.0% 7.0% 8.0% 8.5% 8.5% 9.0% 9.0% 14.0% 13.0% 12.0% 30% 60.5% 60.5% 61.0% 20% 10% 0% Indep Tire Dealers Mass Merch Warehouse Clubs Auto Dealerships Tire Company Owned Misc Source: MTD Jan 2017
4 Industry Facts - Brands & Brand Loyalty 2016 Replacement Brand Share Brand Pass LT Goodyear 13.0% 12.0% Michelin 9.5% 7.5% Bridgestone 8.0% 7.5% Firestone 7.5% 7.0% Cooper 5.5% 6.5% BF Goodrich 5.0% 8.5% Hankook 4.5% 4.0% Yokohama 4.0% 4.0% General 3.0% 5.0% Toyo 3.0% 4.0% MultiMile 2.5% 4.0% Pirelli 2.5% 2.5% Kumho 2.5% 2.5% Dunlop 1.5% 2.0% Kelly 1.0% 1.5% All other 27.0% 21.5% Source: MTD Jan 2017 Brand Loyalty - 37% of consumers are OE brand loyal (2+ tires) - Luxury vehicle segment = 58% OE brand loyal, but nearly half of those intend to go to the Auto Dealer channel for new tires. - Mass market vehicle owners = 31% OE brand loyal Vehicle Segments 1st Rank - Loyalty 2nd Rank - Loyalty 3rd Rank - Loyalty Luxury Michelin Pirelli Bridgestone Pass. Car Michelin Pirelli Goodyear Perf. Sport Michelin Goodyear Bridgestone Truck / Utility Michelin Goodyear BF Goodrich Source: JD Power Study 2017 US OE Tire Customer Satisfaction Study
5 Industry Facts Tire Size Trends VIP matches very closely with the Industry. TOP PASSENGER TIRE SIZES Rank 2016 Industry 2016 VIP 1 205/55R16 205/55R /60R16 225/65R /65R15 195/65R /55R17 215/60R /70R17 265/70R /65R17 215/55R /60R16 225/60R /50R17 195/60R /60R15 225/50R /70R16 235/70R16 TOP LT TIRE SIZES Rank 2016 Industry 2016 VIP 1 LT265/70R17 LT245/75R16 2 LT245/75R16 LT265/70R17 3 LT265/75R16 LT265/75R16 4 LT225/75R16 LT275/70R18 5 LT235/85R16 LT225/75R16 6 LT275/70R18 LT285/75R16 7 LT285/70R17 LT235/85R16 8 LT245/75R17 LT275/65R18 9 LT285/75R16 LT285/70R17 10 LT215/85R16 LT245/75R17 Source: RMA, MTD
6 Industry Facts Aspect Ratios & Rim Sizes VIP trails on 45 & lower Aspect Ratio. Dominant in 16 & 17 rim size. 30% 25% 20% 15% 10% 5% 0% 24.8% 21.0% 17.5% 15.4% 9.0% 4.2% 6.5% 0.2% 0.7% Aspect Ratio IND 2016 IND 2016 VIP 0.6% 40% 35% 30% 25% 20% 15% 10% 5% 0% Rim Size 35.9% 27.5% 18.6% 9.8% 3.6% 0.2% 1.4% 3.0% 12, IND 2016 IND 2016 VIP Source: RMA, MTD
7 To look forward, you must first look back Ancient Chinese Proverb Dr. Phil Bible Bill Belichick Some wise old tire guy
8 Replacement Units - millions OE Units - millions Replacement Units - millions OE Units - millions Industry Facts OE Trends & Impact OE helps predict future tire replacements. 225 Passenger Tires - U.S. Replacement & OE Tire Units Shipped est 0 Replacement OE Light Truck Tires - U.S. Replacement & OE Tire Units Shipped Replacement OE est Source: RMA, MTD 0
9 OE Tires VIP Units Sold OE Tires VIP Units Sold Industry Facts OE Size Impact OE will continue to have a positive impact on size 215/55R17. Size 195/60R15 sliding due to lack of OE. 5,000,000 4,000,000 3,000,000 2,000,000 1,000, /55R17 OE vs VIP Sales ,077 1,478 1,713 2,065 2, OE VIP Sales ,000, , , , ,000-5, /60R15 OE vs VIP Sales 6,781 6,332 6,151 5,233 4,902 4, OE VIP Sales Source: RMA, MTD
10 Industry Facts 2017 & Beyond 80% of OE growth through 2020 will be 18 and above Sizes with Significant Growth Expectations SIZE 2011 OE 2012 OE 2013 OE 2014 OE FITMENTS ,935 1,163,475 1,857,613 2,291,292 Silverado / F150 / Tundra , ,150 1,365,218 1,306,020 Altima / Accord / Passat , ,917 1,123,261 1,014,257 Impala / Malibu / Escape , , , ,281 Escape / Caravan , , ,112 1,265,576 Silverado / Sierra / Tahoe Sizes with Significant Growth Size 2012 OE 2013 OE 2014 OE 2015 OE FITMENTS , , ,793 1,339,631 Edge / Ridgeline / Highlander , , ,388 Silverado / Sierra , , ,029 1,270,280 Rogue / Chrys 300 / Grand Vitara , , ,897 Colorado / Ford Transit Source: RMA, MTD
11 VIP 2017 Tire Programs Focus Core Brands / Distributors Program G3X MAST TBC Brands Goodyear / Dunlop / Kelly Michelin / BFGoodrich All TBC (Dept 103, 119) Authorized Distributors Max Finkelstein Carroll Tire (Primary) ATD & TCI (2nd) Direct from TBC Stores can t stock everything every customer wants, but: Replenishment (Pass. & LT stripped sizes, non winters): All-Stores Stocking : 82 sizes cover 88% sales Select-Stores (20-50) Stocking: 21 sizes cover 4% sales Hub target: 100 sizes VIP Warehouse: 130 sizes MFI & Carroll: core branded inventory So what about Outside Purchases of non-stocking items?
12 VIP 2017 Tire Programs Outside Purchases (OPs) This fiscal year, OPs account for approximately 10% of all tire sales When do you need to use the OP program? Is it always 100% necessary? Are there ways to decrease OPs and keep focused on our Core?
13 VIP 2017 Tire Programs Tires Miscellaneous Our Spring Return - 11,000 non-selling tires from stores, however: 3,700+ tires & over 1,200 custom wheels to sell through Tire lines include: Grand Tour, DZ101, Mirada SPT GTX, Crosstour SLX, ZE912, Sumi P01, Timberland, Hi-Fly, Velozza ZXV, TA KO.. Priced below replacement equivalent to Sell!! Wheel clearance sell at cost / create tire-wheel packages EBAY & Simple Tire 200+ / month OPP Competitive solutions Renegade AT5, Rivera GT10, Stampede Sport HT, Americus CLT, Atrezzo
14 SHARE THE WEALTH! Leverage knowledge and experience so we all can share the wealth SOLUTIONS: Identify what tires work best for vehicles that are known to wear tires CHALLENGES: What vehicles are you having trouble fitting good wearing tires
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