On the Move with OK Tire
OK Tire is on the move. Canada’s largest independent tire and automotive service retailer has embarked on a five-year, $100 million drive to expand its distribution capabilities to serve a rapidly growing network of stores.
The Surrey, British Columbia-based retailer boasts over 350 stores across Canada, all of them independently owned and operated. If all goes to plan, dozens of new stores will be opening over the next few years. These bricks and mortar locations will be complemented by an enhanced online presence, including an e-commerce platform.
The company offers highly-skilled staff and an enormous selection of tires for all manner of vehicles. “We sell to the whole spectrum. I like to say our smallest tire is 3.7 inches wide, and our largest tire is taller than a truck. We serve all markets in Canada. When people think tires, they naturally think of [car] tires, but we also distribute eighteen-wheel tires, wheelbarrow tires, construction vehicle tires, logging vehicle tires,” states Chief Operating Officer Michael Rutherford.
OK Tire locations also specialize in auto repair including brake work, wheel alignment, oil changes, and diagnostics. Stores sell accessories such as floor mats, custom lighting, and trailer hitches, and the company will soon be adding a new accessory called AutoSock, a textile product that fits over tires for better winter traction.
Products and services are backed by a sweeping warranty. “What we offer right now is a twelve-month, 20,000-kilometre warranty that is good anywhere in North America. So even if you’re in the United States, you will get warranty service covering essentially all the products we sell and all the services we perform,” he says.
At present, OK Tire has 353 locations and has a workforce numbering around 1,800 to 1,900 people. “We’re the only chain of our kind that is active in every province in Canada. We’re still more weighted towards the West because we started out there, but really we’re pretty evenly spread across the country,” says Rutherford.
As Rob Jantzi, Director of Purchasing, explains, “We are going to open up different avenues of opportunity for our dealers and we’re going to places this company has never seen before.”
To this end, the company has invested $100 million to expand existing distribution centers and build new facilities. On April 17, for example, it announced that Salaberry-de-Valleyfield, Quebec would be the location for a new, $14 million distribution center serving Eastern Canada.
“We’ve experienced some very good growth over the last four or five years. We thought our current distribution footprint would see us past 2020, but because we’ve been averaging about thirty new stores a year in growth, we’ve maxed out our ability to distribute. In order to really service our locations properly, we need a bigger distribution [network]. We are almost doubling our distribution footprint across the country over the next five years,” states Rutherford.
Even as the company expands, one thing that will not change is the company’s unique corporate structure. “We have to call ourselves a franchise because of Canadian law, but really we are a dealer-owned organization. [Our stores] are owned by our dealers and shareholders… Only OK Tire dealers can hold shares,” he says. “The shareholders vote in a board of directors chosen from our dealer base, and the board hires management to operate the company.”
The company does not charge franchise fees or royalties. “Our training is a little bit different than a traditional franchise,” he says. “Most of our dealers are already successful business people who have already worked in a store. We focus our training on individual programs. We have a lot of programs that will analyze a store, look at opportunities for growth, and train people specifically for that.”
As far as Rutherford is concerned, the company’s ownership model is a strength. It sells leading products and offers superior service, but it is “the independent nature of our network,” that helps OK Tire stand out from the competition, he says.
“Because we have over three hundred different shareholders who are all small business owners, they have a vested interest not only in their own business but the larger entity as well,” notes Rutherford. “When you have an owner who lives in the community, this is someone you see at the grocery store. Your kids are on same soccer team. That’s what sets us apart.”
Cynda Pang, Director of Finance, agrees. “This company has been in business for over 65 years,” she shares. “Our dealers have a key place in their communities where they do business. They give back to the communities they operate in and that’s an important part of our company values.”
John Sotham, Chief Financial Officer, explains that, “Our people have a desire to compete and to win,” he says. “These are the people who will take this fantastic company – that has established roots and is well known in Canada – and enhance it by giving our dealers better ways to win, better ways to compete, and better ways to grow their business.”
“Thanks to our dealers, we are experiencing phenomenal and consistent growth in our network on both the commercial and retail side. We are changing our business model to provide our dealers with everything they require to serve our customers’ automotive needs better,” says Jim Caldwell, President & CEO of OK Tire Stores Inc. “Our distribution center expansion announcement marks the beginning of a new OK Tire as Canada’s premier tire and auto service company,” he adds.
The company traces its roots to a Northern Michigan firm founded in 1929 by a man who developed a new process for vulcanizing tires and built a business around the idea. The company, which used ‘OK Tire’ in its name, became quite popular, boasting 1,800 locations across North America at one point. New technology, however, rendered the founder’s once revolutionary vulcanizing process obsolescent, and company fortunes took a downward slide.
In 1953, a group of Canadian OK Tire dealers got together, acquired corporate rights and launched a new version of the company. It was decided that this new corporate entity would be a Canadian-run enterprise with dealer-owned stores. Over the decades, it has stayed true to this vision.
“Our company is one hundred percent Canadian owned. We have no stores outside of Canada and no financial interest outside of Canada. We are proudly Canadian and know there is still a lot of development available inside Canada. We have no current plans to move outside the country right now,” says Rutherford. While there are some retail outlets bearing the OK Tire name outside of Canada, these are not affiliated.
In addition to beefing up its bricks and mortar presence, the company is enlarging its digital footprint. Right now, customers can go to the company website and enter information about the make and year of their vehicle and the size of tire as well as whether they want a tire for winter, performance, all-season, or summer to determine if the tire in question is in stock.
This fall, OK Tire will also be rolling out a revamped company website, complete with other interactive tools. In the spring of 2020, the company plans to launch an e-commerce platform that will allow members of the public to make online purchases.
A new online tool called the iConfigurator is designed to let potential customers analyze possible purchases. “The iConfigurator gives you the ability to upload a picture of your own vehicle or use a standard stock picture of your vehicle. Then you can start to choose a different style of wheel, a different colour of wheel. You can change the colour on the vehicle. It gives you the ability to see what your vehicle would look like with this wheel and tire package on it, with these different accessories. People can grab those pictures and post them on social media and say, ‘Here’s what I’m thinking about for my truck. What do you think?’” says Rutherford.
As Jaclyn Logan, Director of Marketing, says, “We will be leaders in our industry with our digital strategy by capturing the enormous opportunity that exists to provide the best online user experience.”
For all these new developments, some basic company principles remain the same, such as the cohesiveness and strength of its team. “We strive to support our employees the best we can, and we work hard to be an employer of choice,” says Wendy Turza, Director of Human Resources. OK Tire also aims to maintain a consistent supply chain, “striv[ing] to provide best in class distribution, product and customer service to our stores and their customers daily,” says Tony Beck, Vice President Logistics & Distribution.
“We like to stay as stable as we can,” Rutherford agrees. “For our premium lines, we’ve had the same vendors for many, many years. We don’t dilute our offering by just signing everybody. We’ve very selective about who comes in [as a supplier]. Their product has to be quality, has to have good name in the marketplace, has to have good support, and has to have a good warranty because we don’t want to be fighting with our supplies about warranty issues,” he states.
The company’s promotional efforts blend old-school marketing with new, online initiatives. “We do trade shows for specific products. We attend a lot of farm shows, we do some commercial trucking shows and mining shows,” says Rutherford. “To the general public, [we run] TV ads. We’ve really been pushing our digital platform. We’ve got it down to the point where we know if there’s going to be a blizzard in Regina, Saskatchewan tomorrow, we can put out a visual feed today telling people to get ready for it. These days it’s all about digital.”
Rutherford says it is vital to remain relevant and up-to-date, especially given the changes occurring in the vehicle industry. Electric and autonomous vehicles present new technical challenges, for which the company is preparing. OK Tire is also making sure its own technology remains cutting-edge.
“We’re investing not only in our distribution footprint but in technology and upgrading our digital platform,” says Rutherford. Part of this involves updating the company’s enterprise resource planning (ERP) system, among other systems.
He says the biggest challenge facing OK Tire right now “is trying to manage our growth. We have grown substantially over last few years. We have a very aggressive strategic plan over the next five years that will take a lot of attention to make sure it’s done correctly, and [we’re moving] into new products.”
“The detail and effective execution of our strategic plan will drive our dealers into the future,” agrees Gary Hoover, Director of Business Development.
Rutherford anticipates that OK Tire’s growth is going to remain substantial for the foreseeable future, driven in large part by its team of skilled employees and dealers. “Five years down the road, we’re going to be well over five hundred locations. We’ll have opened all of our distribution centers. We hope we become top of mind. We hope people think of OK Tire first, whether that be for [a purchase] or service,” he states.