On a roll: Mobile Tyre Shop CEO Travis Osborne warns that established retailers face a similar fate to Blockbuster and Kodak if they pay no attention to overseas trends toward online tyre sales and mobile fitting.

AUSTRALIAN tyre industry executives are underestimating the potential future market penetration of e-commerce and mobile fitting services in this country, according to the CEO of a leading mobile tyre fitting service.

 Responding to a GoAutoNews Premium report in which Goodyear and Dunlop Tyres Australia vice-president of retail Scott Wood predicted online tyre sales to reach just “two-to-five per cent of the Australian market”, Mobile Tyre Shop CEO Travis Osborne predicted that eventually 20 per cent of Australian tyre sales would be online, with the majority of these fitted by mobile vans.

 “While still very much in its infancy in Australia, e-commerce and mobile tyre fitting will change the industry,” Mr Osborne said, drawing parallels with fallen giants such as Blockbuster and Kodak that failed to recognise and respond to a changing marketplace.

 In response to Mr Wood’s opinion that customer uncertainty over delivery and installation times was an obstacle to online adoption, Mr Osborne said that 62 per cent of his customers had their tyres fitted the same day. 

“Until quite recently Australians thought a 7-Eleven being open late was the height of convenience but now we have on-demand food delivery and online fashion boutiques that deliver the same day,” he said. 

Mr Osborne added that this “redefining of convenience” in Australia would accelerate demand for online tyre sales and mobile fitting. 

Speaking with GoAuto at a media event in New South Wales last week, Kumho Tyre Australia sales and marketing director David Basha saw online tyre sales as topping out at around 10 per cent but was less optimistic about the mobile fitting model. 

“I don’t think mobile will become a major force, but it certainly provides a really good option for people,” he said. “You’d probably consider it a fledgling part (of the industry) but I think it’s a good thing.” 

However, Mr Osborne highlighted the sector’s progress in Europe, where ATS Euromaster runs 2600 tyre fitting vans across the continent. He also pointed out that in April 2015 Michelin acquired a 40 per cent stake of French tyre e-tailer Allopneus and absorbed British online tyre store Black Circles less than a month later. 

The Allopneus website states that internet sales account for around 17 per cent of the French tyre market. Last year, German automotive e-commerce specialist Delticom forecast that the proportion of tyres sold online in Europe would reach 15-20 per cent by 2020. 

In 2017, market research firm Frost and Sullivan projected online tyre retailing to have a market penetration of around 24 per cent in Europe and 12 per cent in North America by 2023. 

Another market research organisation, NPD Group, reports that online tyre sales grew 34 per cent in the United States during 2018, accounting for 21 per cent of all automotive online spending and outpacing the broader US automotive e-commerce market. 

Mr Osborne told GoAutoNews Premium that these overseas trends, coupled with Mobile Tyre Shop’s consistent double-digit month-on-month growth, had led the company to set a target of expanding from 37 vans to 57 by the end of this financial year, with a long-term ambition of 300 company-owned vans nationwide. 

He said that for online tyre buyers, mobile fitting was “a no-brainer” and described ordering tyres online only to then visit a brick-and-mortar fitting centre as “defeating the purpose”. 

From the retail end, Mr Osborne said he had received feedback from brick-and-mortar tyre fitters who felt they were able to offer a better service and lower pricing to walk-in customers than online customers who had ordered and paid using a website operated by head office. 

As reported, Mr Wood said the difficulty of offering on-the-spot wheel alignment would be a restricting factor for mobile tyre fitting services. 

Mr Osborne said technology exists that enables mobile wheel alignment and although he admitted this takes longer than at a workshop, he noted that Mobile Tyre Shop had identified advantages of the mobile alignment rig, such as compatibility with stretch Hummer limousines that could not fit on a regular hoist. 

According to Mr Basha, installing a set of four tyres from a van could take “an hour and a half”, which is longer than in a workshop environment, but Mr Osborne dismissed this as untrue and said his company allowed up to 45 minutes per job or 55 minutes for cars with wheels larger than 19 inches. 

“There is always the impression that it takes longer, but the only bit that takes longer is lifting the vehicle,” he said. 

“Most of our vans have air jacks and once the wheels are off and inside the van, our fitters are finding the ergonomics actually makes it quicker; for example, once the tyre is on the rim it is then one movement to put it on the balancer.” 

When asked about the challenge of serving rural and remote areas with mobile tyre-fitting vans, Mr Osborne said there were many reasons why vans posed a more financially viable option. 

“The cost of putting on a van is less than renting and fitting out a store,” he said, and described a scenario in which a single tyre van could service a chain of regional towns on a weekly rotation, similar to a mobile library. 

“What I’ve come to learn in some of these locations, for example Western Australia, is that people are used to waiting,” he said. 

“The naysayers go on about Australia being so vast, but the vast majority of our population lives within 80 kilometres of the eastern seaboard … we’re picking the eyes out of that.”

By Haitham Razagui