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Trends and Treads: How Did the First Quarter of 2023 Shake Out?

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May 2023

Torqata is proud to present Trends + Treads, a blog series that brings you actionable market insights in the automotive tire industry! We’re dedicated to equipping tire and service shops with actionable data and analytics tools that can help increase profits, identify blind spots in the business, and optimize the supply chain. 

For our next Trends + Treads post, our very own Jeffery Grubb, Business Development Manager, and 25-year automotive professional, takes our Q1 2023 wrap-up and breaks it down for you.  

Jeffery Grubb — Tire retailers large and small! We know you’re facing some challenges as we step into Q1 2023, but don’t worry – we’ve got your back. We’ve got hard numbers from over 15,000 roof tops. Here are my thoughts on how these numbers affect your business. Let’s keep your business on the right track!

Margin Squeeze

Tire Retailers of all sizes are struggling with declining profits due to high-priced 2022 inventory now selling at lower prices. How can you make sure your business stays profitable? Start by comparing your prices with local competitors and ask yourself:

  1. How do my prices stack up against other retailers in my area?
  2. Can I adjust my prices to stay competitive while maintaining healthy profit margins?

By understanding the pricing landscape, you can make informed decisions and adapt your strategies to keep your profits rolling.

Retailers are seeing a boost in tire retail prices and tire costs this year. Despite the cost increase, tire margins have also improved. To capitalize on this trend, compare the prices in your local area with your competitor’s prices. You may find opportunities to update your pricing strategy.

Revving Up Store Visits

Surprisingly, lower gas prices and increased Vehicle Miles Traveled (VMT) haven’t led to the expected boost for in-store visits. How do you drive more traffic to your store? Your Service Writers must remind EVERY customer of the importance of timely tire maintenance and ask yourself daily:

  1. Are we effectively communicating the impact of tire maintenance on vehicle safety?
  2. How can we emphasize the role tires play as the sole point of contact between a vehicle and the road?

By addressing these questions, you can encourage customers to prioritize regular tire maintenance and increase store visits.

Store traffic has not increased this year, despite lower gas prices and an ongoing increase in Vehicle Miles Traveled (VMT). Delayed maintenance can impact vehicle safety significantly. It may be time to remind your customers that tires are the only point of contact between their vehicle and the road.

What do Regional Tire Trends have to do with you?

With a 10.5% decrease in store visits YoY, it’s crucial for retailers to have the right mix of inventory to maximize profits. Regional trends are built from actual data on local retailer levels. And with tire volume decreasing across all regions, it’s essential to know the factors behind these changes. Trends + Treads is based on actual data to help you stay ahead of the curve; consider these questions:

  1. Does a report you read online from last year help you? Are you keeping up-to-date with regional trends?
  2. Is your inventory tailored to match customer preferences in your specific market or in your Zip Code?
  3. Where does my business stand compared to my competitors?

By staying in tune with regional trends and adjusting your inventory accordingly, you’ll ensure you’re meeting the demands of your market.

In Q1, all regions are experiencing a drop in tire volume, but the extent of the decline differs. This variation may be due to local economic conditions, increased urbanization, and shifting weather patterns that affect tire use and road conditions. Get insights into the tire industry with Torqata to determine where you stand.

Tier 4 Tire Popularity

The growing popularity of Tier 4 tires is a trend you can capitalize on. It’s no secret that shoppers are pinching pennies! You can say, “woe is me,” or you can capitalize and make it an opportunity.

How do you make the most of this opportunity? Ask yourself:

  1. Have you adjusted your inventory to cater to the demand for more affordable tire options?
  2. How can you target your marketing strategies toward price-conscious customers?
  3. What is the most popular size/tier/category in your market or zip code?

By addressing these questions, you can tap into the market for more affordable tires and drive sales.

The growing popularity of Tier 4 tires, which we first noticed in 2022, might be
due to families seeking more affordable options for their cars and wider availability of these tires in stores.

Tackling Volume by Category

Tire volume is decreasing across various categories; it is important to stay on top of this now, not later. You must know what categories are trending up as well. Consider the following questions:

  1. Are you adjusting your inventory and marketing efforts to align with shifting customer preferences?
  2. How can you better serve customers looking for light truck, SUV, or passenger car tires?

By monitoring these trends and adapting your approach, you’ll cater to your customers’ evolving needs and keep them coming back.

Tire volume has decreased, with recreational tires showing a significant Year over Year (YoY) drop and a faster decline. Other segments experience smaller dips. However, light truck and SUV tire sales are starting to recover, while passenger car tire sales slow down, falling 11% YoY in Q1 2023 compared to a 7.8% drop in 2022.

Data Doesn’t Have to be Scary

Staying informed and using data insights doesn’t have to be scary. You can navigate the challenges of 2023 and make decisions that’ll help your business thrive. Let’s embrace actual data, capitalize on what we know to be certain and drive your tire retail business to success!

About Jeffery Grubb

Jeffery is a highly experienced technical professional in the automotive industry. Throughout his career, he has worked with a diverse range of companies, including Advance Auto Parts and Mitchell1, providing support to dealers, independent repair shops, tire dealers, and body shops.

In addition, he has been managing his own business in the technical field for the past 25 years With his extensive knowledge and expertise in the technical field, Jeff has successfully helped numerous businesses achieve their goals and grow their operations. He is known for his excellent communication skills, attention to detail, and ability to develop effective solutions tailored to the unique needs of each client. He currently serves as the Business Development Manager for Torqata Data and Analytics.

Where Our Insights Come From

Our exclusive insights leverage data from over 15 thousand tire retailers and 50 million tires sold, which we combine with our comprehensive catalog of 221 thousand tires. For more information on our tools, contact support@torqata.com or call 828-TORQATA.

Follow us on LinkedIn 👉 https://www.linkedin.com/company/torqata/

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CAN DATA-DRIVEN DECISIONS FAST-TRACK BUSINESS?

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When should suppliers accelerate and when should they apply the brakes? It is a question every automotive vendor struggles to answer. Does Torqata, a data and analytics start-up, hold the keys to data-driven market success? 

By Marion Jablon Posen 

If you read automotive press, attend automotive conferences and generally keep your ear to the automotive industry ground, you may have run across the name Torqata, but like me, you may not know much about this relatively new spin-off company or its mission. 

What is Torqata and how did it come into existence? 

Torqata started as an internal advanced analytic arm of American Tire Distributors (ATD), designed to identify and create efficiencies in ATD’s distribution by leveraging data. After realizing the team’s tools could apply to more than just tire distributors, Torqata spun off into its own startup in 2020.  

With a newly found mission to serve the broader aftermarket, Torqata now seeks to unite the industry using retailer point-of-sale data, and analytics horsepower, to create data transparency. This allows manufacturers, distributors and retailers to improve key areas of their business performance using patented technologies and data-driven analytics and insights. 

The name Torqata is a combination of the words torque and data. If torque gets a car moving from a stop and provides the power needed to climb hills and pass other vehicles, Torqata powers and drives better business decisions through data and analytics. 

Tim Eisenmann, Torqata CEO. 

From the beginning, Torqata’s CEO Tim Eisenmann’s vision has been to “enable and inform manufacturers, distributors, service and tire shop owners to remove waste by providing the ability to quickly respond to market trends and create efficiencies in their business to drive more revenue.” 

How does Torqata help real-world aftermarket customers? What is the practical application for customers who may not be familiar with data and advanced analytics? 

Jill Trotta, Torqata VP of Business Development, Partnerships and Marketing. 

“We own the most extensive, granular, relevant data set in the auto aftermarket supply chain. Leveraging that data via patented algorithms, we provide transparent and unbiased insights to ensure we represent the overall market. Manufacturers and distributors can capture demand signals to optimize inventory and production while leveraging aggregated and anonymized data that can apply across all partners,” explained industry veteran Jill Trotta, Torqata’s VP of Business Development, Partnerships and Marketing. 

“We know that Big Data sounds intimidating. We make it easy for our customers to harness its power and drive business. Retailers benefit from our suite of data-driven software solutions for pricing, inventory strategy and sales.” 

The Torqata team can deliver actionable insights designed to streamline operations and reduce or eliminate stale or undersold inventory in three important ways:  

  • Provide pricing insights for shops to see how they compare against the market without making phone calls. It allows for a better pricing strategy, so shops know when they are underpriced or overpriced down to the SKU level. 
  • Appropriately take advantage of manufacturer incentive programs and rebates by making inventory recommendations based on market demand and forecasts. 
  • Optimize inventory by making recommendations that help identify the most profitable inventory based on a customized area and its demand. 

Who are Torqata’s current customers and who would benefit from using Torqata’s expertise? 

Torqata provides unique insights to tire retailers, manufacturers and distributors based in the United States, allowing them to source, price and optimize their inventory, Jill states. While the potential exists to expand their data services to other products, their current focus remains on their original mission of reducing waste and increasing profits throughout the tire supply chain. 

Electric vehicles are advancing many changes in the automotive industry; how will Torqata adapt to and embrace those changes in their business model? Jill says, “Torqata already sees the impacts of electric vehicles (EVs), especially on tires. The torque and weight of EVs wear tires faster than ICE (internal combustion engine vehicles). Our data is already showing signs of this shift in demand, and we are helping our retailer customers assure they are stocking the right products, at the right price, to meet this trending demand.” 

What do customers say about adding Torqata analytics to their strategy? “Torqata is an amazing tool that is helping to shape our inventory into the proper mix of SKUs to stock for our market while guiding us on which SKUs to stock to maximize profit.”  

“The Torqata team offer outstanding customer service and are very knowledgeable, instilling confidence in myself and my staff with the data that we rely on from Torqata,” remarked Brandon LePage, Owner Jim Lewis Tire. 

A sentiment echoed by Jeff Deans of St Lucie Battery & Tire, “For our business (17 retail locations, one wholesale), Torqata has advanced our process ten years. There was an amount of labor and time involved that was getting burdensome to maintain proper stocking levels and inventory in our stores. Torqata not only speeds up this process tremendously but gives you the information in a clear and easy to understand format. I was able to hand off this task to someone who had never been in the role of inventory management before with only Torqata in his tool bag, and progress has been fantastic. We will be utilizing Torqata in its full capacity, moving forward, solely as our management tool.” 

Torqata Team Meeting. 

Managing a start-up business is always challenging, with one hundred employees working remotely how does Torqata’s company culture function?  

Describing the Torqata culture Jill says: “Although our team is 100% remote, there is a strong focus on connection and community. We start each week with an all-hands stand-up meeting to align the teams and finish each week with a check-out, which includes the opportunity to “shout-out” (thank) team members for their efforts. We know the automotive aftermarket and encourage ideas from every corner. This level of interaction and collaboration has led to constantly improving existing offerings and developing new ones based on our customer’s pain points.” 

“Torqata places a high priority on promoting and embracing Diversity, Equity and Inclusion (DEI) by partnering with aftermarket diversity specialist dott™, and Torqata has increased our dedication to elevating people, process and profits through diversity of thought.” 

“Additionally, team members are encouraged (it is even included in goals) to reach out to their local communities and volunteer three times per year, to attend two conferences/networking events in the industry, and to hand out virtual tacos for giving shoutouts to anyone in the company to celebrate anything worth shouting out for. Our ladies have a “Women of Torqata” group that includes regular mentoring sessions from the Pink Mentor Network, “a program designed to help women through team workshops that recognize collective challenges and individual contributions and energize and unite every member for the work ahead.” Our ladies have raved about how informative, empowering and uplifting it is to gather.” 

Torqata is a blend of unique talents and skills, pulling together a variety of the brightest data scientists, talented developers and automotive industry veterans’ laser-focused on providing tools and solutions that help advance the automotive industry.  

Advanced data analytics is just another way the automotive aftermarket is growing and providing insight to businesses and career opportunities for a new generation.  

If you want to join Torqata and the many other technology providers that have used MOTOR’s Insights data solutions to support data-driven decisions, please visit motor.com.

Stay current on trending automotive news and read MOTOR-exclusive articles written by their industry-expert writers. Sign up to receive MOTOR’s e-Newsletter today! 

View the original article by MOTOR here.

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TORQATA ANNOUNCES NEW ADDITIONS TO THE TEAM, CONTINUING TO STRIVE FOR A WORKFORCE IN THE TIRE INDUSTRY INCLUSIVE OF WOMEN

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Embracing the small number of women in the automotive industry, Torqata continues to value women with automotive and tire industry experience, bringing three new experienced women in 2023, and promoting another to Vice President.

Huntersville, NC, March 31, 2023 — Torqata Data & Analytics, a software company in the tire industry, welcomes Kirsten Zaremba, Ashley Hoyt, and Kate Beirowski to the team, bringing additional experienced women into the automotive industry. Torqata also congratulates Elizabeth (Liz) Schneider on her new promotion to Vice President of Product.

Kirsten is on board as the new Director of Marketing, bringing more than 25 years’ experience in the automotive industry supporting the automotive aftermarket, dealers, and vehicle manufacturers, such as Volkswagen. Among the key initiatives while at the Auto Care Association, she led efforts to ensure secure and direct access to vehicle data with the “Your Car. Your Data.” campaign and Right to Repair. In addition, she is a Women in Auto Care member, on the Wheel and Tire Council for SEMA, and an Ambassador of TechForce.

Ashley joins as the newly created Senior Manager of Business Development and Partnerships, bringing on more than ten years’ of experience.  Along with her childhood roots in the automotive industry, she is an experienced partnership manager. Most recently, she created the Enterprise CSM team at RepairPal, a software company for auto repair and maintenance, and defined the team’s mission and recruitment goals. In addition, she is a member of Women in Auto Care and YANG.

With more than ten years’ experience as an inspirational sales leader in the logistics and automotive industries, Kate joins Torqata as the Director of Inside Sales. She has built successful sales teams from the ground up and will bring that success to Torqata as we continue to grow and transform the tire industry. In addition, she is a member of Women in Auto Care.

It is with great pride that we announce the recent promotion of Liz Schneider to Vice President of Product. Liz joined Torqata in 2021 as the Product Area Manager, and has been a considerable part of Torqata’s success and growth in her previous role. She has more than 25 years of experience in the financial industry in various roles serving retail, small business, and commercial clients. Leveraging data to enable better customer experiences that drive revenue and deliver efficiencies has been at the heart of every role she’s had. In her new role with Torqata as the VP of Product, Liz will continue to lead her teams to meet their strategic goals and contribute to Torqata’s success.

“The uniqueness of every team member here at Torqata, combined with their knowledge and expertise in the industry, will help Torqata to, as we say, drive better decisions,” said Tim Eisenmann, CEO of Torqata Data and Analytics, “We celebrate equity and encourage women of the industry to continue to lead and pioneer our efforts. We’re proud of our new additions and promotion to Team Torqata!”

About Torqata

Torqata Data & Analytics is a data analytics software company that helps tire manufacturers, distributors and retailers maximize profits and customer value by providing data visibility and connectivity across the supply chain. Torqata offers a full suite of data-driven software tools for pricing, inventory management, and sales insights designed to streamline operations and reduce or eliminate stale inventory. This allows manufacturers, distributors, and retailers to improve key areas of their business performance using patented technologies, and data-driven analytics and insights.

Torqata’s vision is to enable and inform manufacturers, distributors, service, and tire shop owners to source, price, and optimize their inventory; this reduces waste and drives profits through the entire distribution channel.

Interested individuals and organizations can visit Torqata.com to schedule a demonstration or to learn more.

Media Contact

Kirsten Zaremba
Torqata Data & Analtyics
kzaremba@torqata.com

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Trends and Treads: 2022 Wrap-up

Posted on

March 2023

Torqata is proud to present Trends + Treads, a blog series that brings you actionable market insights in the automotive tire industry! We’re dedicated to equipping tire and service shops with actionable data and analytics tools that can help increase profits, identify blind spots in the business, and optimize the supply chain. 

For our first Trends + Treads post of 2023, our very own Tyler Martines, Business Development Manager and long-time tire and finance guy, takes our 2022 wrap-up and breaks it down for you.  

2022 Store visits decreased YOY, but more miles were driven:

2022 marked a major change in tire demand throughout the United States.  After two years of record setting growth, most retailers found traffic to their stores down, with research showing a 4.1% drop in store visits on average nationwide. 

Some would argue that this was the result of inflation hitting the consumer, as gas prices rose nearly 17% over the same period.  But here is where the story gets a bit more interesting.  Our data shows that total miles traveled increased YOY in 2022. 

So where did that demand go and are there tire demand tailwinds coming in 2023?  

Drivers were putting more miles on their vehicles in 2022 than in the previous three years, even with gas prices up 31.4% year-over-year. However, where would typically see an increase in store visits with more miles driven, the impact of inflation and supply issues ended 2022 with a 4.1% decrease.

Economy hits volume; how did you compare?

Most tire retailers struggled to grow their tire sales in 2022 as demand slumped nationwide. An important factor to consider when reflecting on your business performance over the last 12 months is your relative performance to the overall market. 

A declining year is never something to celebrate but if you were +/- a few percentage points YOY in 2022 there is a good chance you took market share from your competitors.  How?

On average, tire volumes declined by just over 10 percent, so if you outperformed that in 2022, you outperformed a number of your fellow tire dealers and potentially took a portion of their business.  

Tiering down:  

In addition to tire volumes falling, a major shift happened in the tiers of tires sold with the largest declines seen in tier 2 and tier 3 products.  While some of this can certainly be attributed to inventory constraints of those brands that make up those tiers, tier 4 tires were the only category that saw an increase in volume.

Inflation hit every tire manufacturer in 2022 but tier 4 products suffered the smallest price increases from a dollar standpoint. This supports the case for the tiering down recognized in our data, as consumers were more cost conscious and shifted their spending habits to meet the increasing costs of common goods.  

Price also continued to impact the market with Tier 2 and Tier 3 volumes decreasing, and Tier 4 tires picked up only a portion of those sales.

Protecting margins:

Many retailers take a fixed-rate approach to pricing their tires.  Think cost of a tire plus a certain fixed percentage. This strategy played well in 2022 as tire dealers not only passed along the increased acquisition cost of the tire to the consumer but saw growth in profits made per tire sold.

This same strategy will have an equally negative impact on profits as the acquisition costs moderate and start to decline. Taking a more strategic approach, with visibility to market level pricing data, will be imperative to keeping the margin expansion seen in 2022.  

Pricing has a significant impact on not only the profitability of your business but the ability to attract and retain new customers. Amid supply chain-related cost increases in the production and distribution of tires… is your pricing strategy still right for your business and customers? Your pricing strategies, along with your competition in a volatile market, can make the difference when your customers are shopping around.

A positive outlook for 2023:

In a changing market environment, it is vital that businesses make a shift from what used to work historically, to a more future focused strategy. Everything from stocking tires, pricing tires, and manufacturer program profitability needs to be looked at through a brand-new lens as consumer demands have shifted significantly from historic demands.

Tire volumes will increase, as more miles driven and falling new car sales support the replacement market outlook in 2023.  The question is, do you have the information you need to be prepared to take advantage of what is to come?    

Article written by Tyler Martines, Business Development Manager for Torqata Data and Analytics

Where our insights come from:

Our exclusive insights leverage data from over 15 thousand tire retailers and 50 million tires sold, which we combine with our comprehensive catalog of 221 thousand tires. For more information on our tools, contact support@torqata.com or call 828-TORQATA.