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May 25, 2018 2:45 PM, EDT
Heavy Hitters Face Off in Online Tire Market
Tires (John Sommers II for Transport Topics)

Consumer familiarity with e-commerce shopping has meant the selling online of ever larger and heavier products from rugs to refrigerators.

This spring, a struggle for market share in online tire retailing turned into a battle for dominance as giants Goodyear and Bridgestone paired off against Amazon and Sears.

On the logistics side, DHL Supply Chain has been busy in the online tire market, shipping more than 110 million tires in the United States and Canada last year for a client base that includes four of the largest original equipment tire manufacturers along with a leading tire retailer.

DHL logo

DHL Supply Chain serves its tire customers with 25 sites, nine dedicated fleets, a managed transportation solution and more than 1,500 staff.

More consumers look to customize their tires, and online outlets can show virtually an unlimited number of options, DHL Vice President of Operations Bob Boehm said.

“It used to be just 15-inch tires, now consumers look at 17-, 18-, 19-inch. They can see all the tire SKUs, including many the local dealer may not carry,” he said.

An SKU, or stock keeping unit, is a product and service identification code for a store or product.

Once the purchase is made, the customer chooses a nearby dealer where the tires can be delivered and then mounted on the consumer’s vehicle, Boehm said.

Amazon fulfillment center

Amazon.com and Sears Auto Center are working together to provide tire installation and balancing for customers who buy tires on Amazon. (Rich Pedroncelli/Associated Press)

Customizing tires and rims also has become part of the new-car buying process for many consumers, just like selecting the candy-apple red color, leather seats and other features.

“Five years ago, this may have been a niche market; but now, automakers offer many tire and rim options,” Boehm said.

That’s why the major tire firms and retailers are maneuvering to build their presence in the online market.

In April, The Goodyear Tire & Rubber Co. and Bridgestone Americas formed TireHub, a combination of Goodyear’s wholesale distribution network with Bridgestone’s Tire Wholesale Warehouse.

One key part of the deal is an online ordering portal designed to integrate with tire dealers’ point-of-sale systems. The 50-50 partners in TireHub reported the joint venture will help them manage the tire SKUs that have proliferated as the customization business has grown. The online emphasis is interesting as Goodyear didn't even sell tires through that channel five years ago.

Atlanta-based TireHub launched with 80 distribution centers and warehouse locations nationwide. It claims it has tires in stock for 97% of vehicles on the road.

And in May, Amazon.com and Sears Auto Center said they would work together to provide tire installation and balancing for customers that purchase tires on Amazon.

“Amazon customers simply select their tires, the Sears Auto location and their preferred date and time for the tire installation” and Sears will contact them to confirm the appointment, according to a release.

The ship-to-store program initially is available at 47 Sears Auto Centers in eight major metro areas. Plans call for it to be expanded to all 400 of the centers nationwide. Sears tire products include the Michelin, Goodyear, Hankook and Kumho brands.

Sears and Amazon have been expanding their relationship since July 2017, when Sears began selling its Kenmore brand appliances through the online giant. This year, Sears’ DieHard auto batteries and passenger tires were added to the Amazon product line.

“The tire industry is evolving, and customers need a supply chain partner that understands that,” Boehm said.

DHL Supply Chain is a subsidiary of Bonn, Germany-based Deutsche Post DHL Group and ranks No. 3 on the Transport Topics Top 50 list of the largest logistics companies in North America.