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It may not be the first industry that springs to mind for its e-commerce potential, but Australian tyre retailer JAX Tyres has just turned in a record trading year on the back of a three-year, AU$3m e-commerce project that addressed a major shortcoming by allowing customers not only to choose but also to buy tyres online.
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The complexity of tyre purchase – JAX tracks 35,000 different tyres and wheel rims that must be matched to 180,000 different vehicles within the confines of road safety rules – had long stymied the process of moving the purchase process online.
JAX, which operates 80 retail outlets in Australia’s east-coast cities, had previously built a centralised database that fed an in-store kiosk called Touchpoint to help customers find the right tyre type for their vehicle. Touchpoint was extended online, but customers were frustrated by its inability to let them complete their purchase at the same time.
“Customers were doing their research into tyres after hours, but there was a frustration factor coming in,” CEO Jeff Board said. “From their point of view they had finished the transactional side of it and didn’t want to have to do it all again on the phone the next day.”
And so JAXOnline was born, an end-to-end e-commerce platform designed and implemented with e-commerce firm Salmat to improve the customer experience of buying tyres and to link those purchases with the JAX supply chain – which includes 20 suppliers from around the world – while also facilitating customer appointments to fit tyres they had bought online.
Complex and time consuming
Building the logistics rules around the process took extensive work internally and with suppliers, who needed to track tyres from their source to the relevant JAX retail outlet. Since customer appointments would be made at the time of purchase, delivery delays had to be factored into the scheduling process, which required extensive visibility into the upstream supply chain.
This all proved incredibly complex for an industry that was very much about the retail experience, said Board. Any doubts were alleviated when the company sold its first tyres online just two hours after JAXOnline went live in March 2015. “We haven't looked back since,” he added.
Since then, the platform has gone from strength to strength, and revealed some interesting mobile commerce habits amongst the company’s customers. No less than 53% of the company’s sales through the new platform are made using a mobile device, with 35% of all sales using a smartphone (and the mobile-optimised interface required by the smaller screen).
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Customers’ mobile preference over the platform’s first nine months “staggered me”, Board said. He admitted that the mobile user experience “is not as good as what we’d like” and said the mobile system will be relaunched next month to reduce bounce rates that are “too high” by, for example, streamlining the purchase process from eight steps to just four.
Despite the need for a few tweaks, the reinvention of JAX's tyre-purchasing processes has already paid off big for the company. “We had a record year in what was a flat market that has been a long way behind the times,” Board said, “We finished the year with a record month in December after five record months in the year. Our turnover has increased, our tyre sales have increased, the number of franchise enquiries have increased, and our profit has not diminished.”
That last possibility was a significant early concern in making the move online, since easier access to pricing and stock information might have led to profit-eroding online price wars and sent shivers through the supply chain. Experience, however, has demonstrated that the opposite is the case – and this has put JAX on the front foot for 2016 and beyond.
“Our suppliers have gone to a lot of trouble to make this work, and because of their desire to be part of our website I am delighted with the supplier arrangements we have signed for 2016,” Board said. He added that the company’s IT team has grown from one person to five to support its online business, which will also see new online marketing initiatives rolled out this year.
“It has been a bit of an experiment for our retail chain and our suppliers, but we're going into 2016 extremely confident that it’s not upsetting anybody – and that it’s working for our franchisees. They’re selling tyres 24x7x365 and just fulfilling the service function the next day. It has truly changed the customer journey.”