Point S USA added a record number of new stores in 2023 — 69 — and expanded into three new states: Michigan, Maine and Maryland. The pace puts the group ahead of schedule in its goal of becoming a 500-store cooperative by 2028.
To put that growth into perspective, 69 new stores decimates the previous record, set in 2022, when dealers added 28 Point S locations in the U.S.
CEO Walter Lybeck said, “We mean it when we say were going to grow. We’re going to make this happen.”
Of the 69 new stores, 39 are branded Point S locations, while the other 30 joined via the cooperative's new Associated Dealer program, which allows tire dealers to join the group without rebranding. (The goal is to ultimately convert those Associated Dealer stores into fully branded Point S members.)
Existing Point S dealers added 22 new stores in 2023. Eric Gill, the largest Point S dealer in the U.S., was the leader in that front, adding 15 new Gills Point S locations.
Craig Bruneel, current chairman of the board of Point S dealers, said, “We are positioning Point S to be valuable to single store owners and multi-store owners.”
One expansion story
Among the new members to join Point S in 2023 is Bay Area Point S, a seven-store operation in Maryland owned by Brandon Tracey, John Fisher and Michael Gosnell.
Tracey and Fisher were long-time employees of the business and were offered the opportunity to become its owners in 2023. They added Gosnell as a minority partner. The business had previously been part of Goodyear Tire & Rubber Co.’s Tire and Service Network, but Tracey and Fisher were looking for a new option. Other groups recruited them, but they landed with Point S.
Tracey said they liked the idea of having an ownership stake in the cooperation and saw a path to improving profitability.
“We want to take care of our customers,” Tracey said. And doing that while “knowing that you’re a part of something” bigger was a real draw.
The decision to join Point S has ushered in big changes for their stores, from new branding and signs to new tire brands. Tracey said their inventory previously was 99% Goodyear products, but Fisher said going forward, “Nokian will be our primary brand.”
Their seven stores are also the first in Maryland to use the Point S brand. But they don’t see that as a hinderance.
Fisher said, “It’s not what’s on the building, it’s who is in the building.” He believes his and Tracey’s longevity as store managers, and the long-time service of other employees, is what keeps customers coming back.
“We want to expand,” Tracey said. “People in our area aren’t familiar with Point S — but they will be.”
Fisher said, “When we get reviews, we don’t want to see ‘a great price.’ We want customer service reviews,” and that’s why they train their team to take extra steps to take care of customers. It might mean making sure an older customer’s finished vehicle is pulled up close to the front door, or it might be opening the door for a parent with a stroller and small children in tow.
Gosnell, who focuses on customer service initiatives, said, “Our Chick-fil-A sauce is our people.”
Read more about the Point S dealer meeting, including takeaways from tire industry veteran Joe Tomarchio.
An updated look
Point S leaders unveiled new initiatives during the group’s annual dealer meeting. Clint Young president and chief operations officer, revealed an updated store branding style guide. He noted this year marks nine years since the group transitioned from the red, white and blue colors and branding of Tire Factory to the blue and green Point S look.
The latest store branding focuses on five key exterior elements that the group wants to streamline across all locations:
- Building sign and a pole sign
- Gray exterior building paint, with dark gray used on bay doors and the traditional blue and green as accents
- Entrance sign (lists hours of operation and services offered)
- Welcome sign above the door
- Service bay signage
To incentivize members to update their stores, Point S will hold a year-long contest to gather entries for the 2024 Ultimate Store Makeover. The top three stores will earn cash prizes, with $20,000 going to the grand prize store.
In addition to updating the look of buildings, during the annual Point S meeting the IT department flipped the switch on new member websites. Regina Fleming, services and solutions architect for Point S, said the updated sites are mobile friendly and built with tools to improve search engine optimization so customers can find the local Point S tire dealer.
Fleming said 80% of customers are likely to look at a dealer’s website from a mobile device. And in that vain, she encouraged dealers to think of it as “more than a website. It’s a foundation.”
Lybeck talked about increasing the group’s online tire sales as a path to future growth. He said nationally, there are estimates that 10-12% of tires are sold online. Point S isn’t hitting that mark.
Electric vehicles are another growth avenue. While they account for only 1.1% of total registered vehicles in the U.S. today, Lybeck said that number is expected to increase. While EV car sales remain in the single digits in the U.S., battery-electric vehicle sales in 2023 in some countries were four- to five-times that of the U.S. In Norway, they accounted for 82% of sales, Lybeck said.
And while tiremakers remain mixed on whether EVs need EV-specific tires, he said there’s no doubt that “EVs are coming.”
Those growth opportunities come as some other uncertainties linger, Lybeck said. Inflation falls in the “nothing we can do about it” category — except to ensure that both the cooperative and dealers keep up on pricing, as that labor rates are keeping up with wage increases. “If you fall behind, you’re losing money.”
Supply chain also remains tricky, and is the core of the Point S business. He called it “an absolute disaster over the last three years.” But the “herky-jerky” environment also served as a wakeup call.
“Our warehouses and our supply chain was not flexible enough. We built it years ago. We needed more capacity. We needed more people. We needed to be able to respond faster.”
Over the past two years, Point S has rebuilt its strategy, and of the eight warehouses it owned two years ago, Lybeck said the cooperative has either moved, closed or expanded seven of the eight locations.
The group closed three warehouses in Memphis and opened a new facility in 2023. Point S closed a warehouse in Gresham, Ore., that was just 10 miles from its Portland location.
The group opened a new warehouse in eastern Oregon in Umatilla, which in six months’ time grew to be almost as large as a warehouse the group operated in Denver for a dozen years.
Point S exited the Denver warehouse and partnered with K&M Tire Inc. to take it over. Exiting that market will allow for a 40,000 square-foot expansion in Portland to increase flexibility, Lybeck said.
“We had to take a ton of action as a result of supply chain,” though Lybeck noted he can’t fix the problems with ships and ports and containers directly.
He also can’t prevent fresh problems from popping up. That includes a January notification that containers from India would soon be assessed a $5,000 surcharge due to “Red Sea pirates.”
The good news is, Lybeck said, “We believe we’re set for the future.”
