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How consumers shop for tires and service.

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An MIT E-Lab research study

 

There are a number of factors challenging the independent tire and service industry in recent years. Tire manufacturers predict low to no growth in 2023, and the number of people working primarily from home tripled from 2019 to 2021, from 5.7% to 17.9%.

TireTutor and MIT students partnered on a research study to understand the consumer decision-making process. Identifying shopping behavior helps independent shops arm themselves with the right tools to increase chances of capturing the sale. We interviewed over 100 consumers both in person and virtually and determined four key factors that play a role in how people shop for tires and automotive service – research, trust & transparency, price, and convenience.

Research

Consumers use online reviews and ratings when shopping for tires. They want to easily compare tire prices and features, as well as store details. Oftentimes shoppers rely on recommendations from a friend or family member who is familiar or experienced with vehicles, or start with a site recommended from Google search. 

The best way to reach a consumer in research mode is to respond to an inquiry quickly. A customer is 20x more likely to engage in the sale process if responded to in 5 min vs. 20 min. Building and sending digital quotes saves time and allows the consumer to purchase directly from the quote vs. time wasted on the phone.

 

Trust & Transparency

Customers value seeing tire and service pricing online, including fees and labor. This builds trust and a loyal customer. People want to support their local shop and have a go-to place they can trust. Each customer is worth $1,700 of net present value (NPV) over the next 2 years. Shops who provide a great shopping experience will win over the future business of every sale.

 

Price Sensitivity

Fifty-seven percent of the people interviewed mentioned price as the most important aspect when buying tires. Brand and quality came in second. People are price sensitive but are not always looking for the cheapest deal. By offering good, better, best options, dealers are empowering the customer to make the choice that works best for them.

Getting a comprehensive tire-pricing analysis from a third-party will help dealers understand how they stack up against the competition and where there is flexibility in their margins. Making a lower-margin tire sale is one way to gain a lifetime customer who will ultimately return for repeated service.

 

Convenience

According to an Uber driver who was interviewed, “the benefit of buying tires online is about convenience”. In a digital shopping age, consumers expect to be able to complete the full transaction online without needing to contact the shop. Consumers prefer simple, modern websites that enable purchasing and scheduling appointments online.

By understanding shoppers’ behaviors, dealers can arm themselves with the right tools to increase their chances of gaining recurring revenue streams from new and repeat customers.