LONDON, Dec. 11, 2017 /PRNewswire/ -- The adoption of digital solutions by players in the tire retail markets of North America and Europe are disrupting the market, with eCommerce, connected services, and telematic new business models changing the way tires have traditionally been sold. While extending customer engagement beyond the point of sale will be the focus for most new business models, tire safety and anti-dumping legislation will pave the future of tire retailing globally.
Frost & Sullivan's latest research, Future of Tire Retailing in North America and Europe, Forecast to 2023, finds that by 2023, almost $10-11 billion in revenues will be earned from online sales of replacement tires. The study provides a strategic overview of tire retail market dynamics, including drivers, challenges, trends, restraints, emergence of eCommerce, downstream activities, adoption of new business models, connected services, and an influx of tier-4 tires. The strategies of key players such as Michelin, Canadian Tires, Tire Rack, Delticom, Pirelli, Tyre24, Pep Boys, Amazon, and Goodyear are assessed.
"With online platforms expected to contribute 10%-12% of overall sales by 2023, tires will continue to be the most popular aftermarket replacement product category sold online," said Anuj Monga, Frost & Sullivan Mobility Programme Manager for Aftermarket Research. "Subscription-based selling and selling auxiliary services will be other possible brand awareness and sales strategies."
Strategic imperatives for tire retailers in the North American and European markets include:
- Driving offline tire retail through connected stores, interactive technology, and richer integrators;
- Increasing customer touchpoints by using technology enabled through digitisation;
- Optimising inventory management through inventory control and use of tire hotels (off-season tire storage facilities) as physical stores decline;
- Seamless integration of selection, trial, purchase, and feedback for the customer; and
- Small repair shop investment in the latest tire repair technology and training.
"The growth of low-cost, tier-4 imports is challenging international tier-1 brands, intensifying competition and impacting retreading businesses in most markets," noted Monga. "This trend is expected to grow due to the wide gap in the price positioning of extreme tires and short-term fall in raw materials offsetting the effect of import tariffs."
Future of Tire Retailing in North America and Europe, Forecast to 2023 is part of Frost & Sullivan's Future of Mobility Growth Partnership Service program.
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Future of Tire Retailing in North America and Europe, Forecast to 2023
SOURCE Frost & Sullivan