Get insights into the unique challenges and creative solutions of some of New Zealand’s most innovative businesses, as they navigate the effects of COVID-19 on our lives and the economy. BNZ connects you with business owners as they discuss common problems, solutions and how they have managed sudden change. Hosted by New Zealand Herald Business Editor at Large, Liam Dann.
Episode 8: Managing rapid growth
For some SMEs COVID-19 presented an opportunity for rapid growth, but like many businesses who experience a surge in demand, there can be a number of growing pains along the way. For Kenneth Leong, Co-Founder and Director of face masks company Meo, the global pandemic saw product demand go through the roof – and managing supply, demand, and logistics proved extremely challenging. For Simon Furness from online meat retailer Hyper Meat the ‘mates helping mates’ mantra inspired an opportunity to combine his existing business with another in a few days – launching a new online platform which generated a stream of demand that they weren’t quite prepared for. Hear how they navigated these challenges by leveraging their networks, motivating their staff, and collaborating with other businesses – and the lessons they learned which are helping position them for long-term, sustainable growth. |
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| Rawdon Christie Interviews Hyper Drives General Manager Simon Furness |
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One of the most pressing barriers to the growth of Simon Furness’ Penrose-based business is that most people don’t believe it’s possible to buy what he’s selling online.
In fact, you can, and people do. Furness’ company, Hyper Drive, sells about $20 million of car accessories each year – most are tyres and most are sold over the internet.
“When you start talking to people about what we do, the most common thing you hear is ‘I didn’t know you could do that!’” he says.
“We’re starting to get the word out about what we’re doing and part of it is an education process.”
Once a customer is driven to the Hyper Drive site, the rest of the transaction is fairly straight forward.
The punter plugs in his or her number plate and gets three options – an economy, a middle-priced and a premium tyre option from one of the big brand names such as Goodyear or Dunlop.
People can buy tyres easily enough but not everyone can get them on a car. HyperDrive has contracts with some 250 mechanics, who will take your booking, receive a tyre direct from HyperDrive’s Penrose warehouse and complete the transaction.
It’s a process that Furness says removes the intimidation factor that can sometimes accompany a trip to the tyre store, where thousands of brands and sizes can potentially be on offer, and also provide transparency.
“Until we came along, you could never easily get a price for a tyre,” he says. “It’s very secretive and even today when you look at some of the websites of the large players you’ll notice they don’t put a price on there – you always have to phone or email them for that.
“I wanted to turn that upside down in terms of making it transparent and trying to show people that this is what you can get, this is where you get it fitted and this is how easy it can be.”
Tyre disruptor
According to the Ministry for the Environment, which is charged with trying to green-up the disposal of millions of used tyres each year, there are about four million new tyres bought each year – including some 1.4m in loose new tyres imported into the country.
Of roughly 700 retailers, half are owned or franchised by the major tyre producers such as Firestone, Beaurepaires, Goodyear and Frank Allen.
Tony’s Tyre Service has a chain of 20 stores and the rest of the retail market is comprised of small operators.
Furness says Hyper Drive has just 2% of the $200-plus million tyre retailing market, which he is hoping to increase to 10%. “Our competitors are heavily invested in bricks and mortar – our model is more about leveraging those people who already have those physical sites in the market and a sort of service-as-required model, so we are a lot more nimble and more focused driving the transaction through the online platform.”
Despite that – or perhaps because of that – there has been some resistance from the big players to the e-tailing upstart.
“You do rattle a few cages going down this path – there’s been some pressure around that for sure.”
A life in tyres
Furness left high school without going on to higher education and got himself a job in a tyre store in Katikati, just out of Tauranga – “without any sort of view of why I was in the tyre industry.”
But soon he was running the place and got a thorough grounding in the brands, the suppliers and the lie of the land.
He ended up moving to Auckland to work for Goodyear and after about six more years with that company made a move to his own business – a long-cherished dream.
“At the time Goodyear owned Beaurepaires and they were going through a transition, so we ended up doing a deal with one of them and taking over a site in Otahuhu, which had been a tyre store for 35 years.”
The owner made a deal. “He said, ‘Look I’ll leave you all the gear but just buy some tyres off me.’”
That first Hyper Drive store bucked the traditional model from the outset – selling mag and alloy wheels and accessories. The business grew and a couple of moves later – about four years ago – the company looked offshore for fresh inspiration.
That was found in the UK. A company called Blackcircles, launched in 2002, became the UK’s largest tyre e-tailer before being bought by tyre manufacturer Michelin for $75m in 2015. It was deemed to be the model to follow and the company had soon signed up 250 tyre fitters to complete the sales process.
The founder of that business, Liverpool-born entrepreneur Mike Walsh, will soon be joining the six-person advisory board of Hyper Drive.
“It’s an absolute coup to get him on board,” Furness says. “He is someone we are using to drive the whole business.” No pun intended.
Technology is key
“We spend a lot of time building good integrations into our suppliers’ warehouses so that, when you come on to our site, you can see virtually 80% of the tyres in the New Zealand market at any one time and then get those tyres out directly once they’ve been bought,” he says.
There is a one- to two-day lead time on the purchase but Hyper Drive is hoping to get that down to three hours.
Furness is quick to point out that online business might seem to have a lower cost base but it is not cheaper to run – at least in his experience.
“Actually, there’s a lot of investment in technology and we are constantly doing stuff and trying to innovate, so it’s like a shop fit-out every six weeks – as the site is like a shop – and we spend a fortune driving people to the site.
"So we hope to improve the conversion rate there and then we should be on track to fulfil our projections.” |
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A simplified way to buy tyres.
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An Auckland business is turning the age old tyre industry on its head, bringing in an Air BnB type model, to sell them throughout the country.
Managing director of Hyper Drive, Simon Furness says he and his team offer a unique tyre buying experience in New Zealand as they’ve basically “internet-ised” the process. “People haven’t really been able to buy tyres online, because it’s not a product you can do much with when you get them delivered to your house. “So we’ve built a network of about 250 installers to have them fitted around the country,” Simon says.
People needing new tyres can enter the registration number of their vehicle into the Hyper Drive site. It will offer a range of tyre options and prices. They can either have them delivered to their house, or chose the place, day and time to have them installed at a local garage. “We take care of the whole process. We make sure the tyres are there for the day that you’ve chosen, and then you just turn up on the day and time that suits you. “The tyres will be fitted onto your car for you and off you go.”
The model allows them to be highly competitive and they charge a flat rate for installation across the country. “It’s taken us about 18 months to build the installation network, because we’ve individually had to go see each store and sign them all up to a contract. “They’ve passed our test for what we’ve wanted. We’ve reached the point where we’re turning away installers now.” This has set them up as the largest chain of tyre stores in the country, he says. “Air BnB claim they’re the largest hotel chain in the world, but they don’t own any motels. We’re sort of the same. We’re the largest chain of tyre stores in the country, but we don’t own any tyre stores - apart from two in Auckland.”
Simon’s team have sought to understand internet and e-commerce over the past 15 years. They’ve worked on making the process of buying tyres online as simple as possible. Until now, he says, buying tyres has been very much a “smoke and mirrors kind of experience”. “No one is prepared to put a price on the market, they would rather just quote you, kind of like you were getting a house painted. “If you were to do a Google search for tyres, there’s basically no one offering you a price online, apart from us.
No man stands alone
Well aware no organisation stands alone, Hyper Drive thanks all those it has working relationships with, including those on these pages: The Bling Company, Yokohama, Achilles Radial, and Toyo Tires. |
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“We’re really transparent about the pricing. After all, you wouldn’t look online for a TV and not see pricing - why should tyres be any different?” Since launching their online service two years ago they’ve done more than 20,000 transactions.
“People haven’t really been able to buy tyres online, because it’s not a product you can do much with when you get them delivered to your house. So we’ve built a network of about 250 installers to have them fitted around the country.” - Simon Furness
“We’ve got the system down pat now, but we continue to develop and refine the processes.” Hyper Drive has invested heavily in digital marketing and website development. They’re also about to launch the seventh version of their website. To enable a smooth customer experience, they’ve built around 40 different application program interfaces (APIs) with their suppliers.
These have made it possible for Hyper Drive to see into their supplier’s warehouses nationwide and ensure stock is available. “So we can actually show about 100,000+ tyres on our site. That’s all live stock. You can basically guarantee that if a tyre’s on our website, it’s in stock. “It works to the point where we’re able to give a really good customer experience. Because tyre buying is so diverse these days, there are thousands of sizes, makes and models and we offer pretty much every size, make and model that there is. “You could drive to a tyre stockist to get four tyres on your car and there’s less than a 50 percent chance they’ll have your tyres in stock.” |
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It took around 10 years of work to set up the API system that created a live connection between Hyper Drive and its suppliers. This involved building systems that integrated with all the different systems their suppliers were using, as well as managing data, “so it’s a massive part of the whole process”. “It’s taken us time to get our suppliers to actually make sure that they are doing their little bit at the end to keep it up to date. We work very closely with all our suppliers. They’re an important part of our installer network.”
Hyper Drive employs over 30 people in Auckland. They also offer other automotive bolt on accessories such as roof racks, stereos and car audio from their shop in Penrose. They’re 100 percent New Zealand owned. Simon’s brother Nick Furness runs the retail side of business and also is a company shareholder.
There are teams of web developers, admin people and tyre fitters, plus the other installers around the country, working for the company. Simon first became interested in tyres when he left school and worked for Goodyear. “And I’ve always kind of had a passion to be working for myself. “I’ve always been motivated by making a difference, and making the experience better for people.” A “relentless drive to keep improving what we’re doing” keeps him going. |
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“The tyre market is a huge market in terms of consumer spend and size, and so we’re not even scratching the surface. “We think we can make a massive difference to the tyre industry and change it quite significantly.
“I guess we’re quite a disruptive player, like Uber has been for the taxi industry. You want to make sure you’re giving value for money, that it’s easy, that it’s transparent, and that’s what we’re all about.” |
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Hyper Drive Supplies:
- Accessories
- Car Alarms
- Car Audio
- Fitting and Balancing
- Parking Aids
- Radars
- Roof Racks
- RV and Marine Audio
- Suspension
- Tinting
- Tyres
- Wheels.
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Hyper Drive zooms ahead with growth in mobile shopping
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Online retailer ‘Hyper Group’ has reported a surge in new business as it benefits from consumers shopping for an ever expanding range of products online, including car tyres.
The Hyper Group said it has recorded a steep increase in sales from new customers, primarily through it’s Hyper Drive business which along with a range of over 100,000 vehicle related products and accessories, allows vehicle owners to select, purchase and arrange the fitting of new car tyres from a network of 200 installers throughout New Zealand – all from their device of choice.
Four out of five of the new customers recruited in recent months were people who had never bought tyres online before.
Sales are understood to be up significantly year on year.
The company said it’s experience suggests online tyre retailing is gaining acceptance quickly, in contrast to the traditionally lagged online adoption in other sectors like travel and banking, as it now makes what used to be a chore, so easy.
The shift may reflect the increasing popularity of the mobile phone as a tool that allows people to shop when and where they want. Almost half the people visiting the company’s website recently have been doing so via mobile devices.
Owner and Managing Director Simon Furness says, “We have been spending a lot of money on the infrastructure around our mobile site as people are so time poor these days that they take any minute they can to organise things through their mobile device. It’s the way of the future and we have had to move with the times quickly”.
“Customers are now buying tyres while they are watching their favourite show on Netflix. There is no reason to spend an hour ringing around getting prices then booking in your car to get tyres fitted. It’s all done online through a very easy process. It’s convenient for them too. They can buy tyres online and get them fitted anywhere in NZ. We had one customer recently who bought them online then got them fitted down the road from his bach where he was for the weekend – easy and convenient”.
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About Hyper Drive
Hyper Drive is a 100% kiwi owned business which works with over 200 independent garages throughout the country which are able to fit tyres that their customers order |
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Lone wolf: Greg Bruce meets Supercars champ Shane van Gisbergen
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People like to show you photos of all sorts of things you're not interested in - kids, houses, holidays, cars - but it's a rare and telling moment when someone takes out their phone, as Shane van Gisbergen did recently, to show off a picture of a gravel road.
What do you say in that situation? "Fantastic grade!"? "So rare to see gravel so grey!"? No, there is nothing. You can only silently admire and reflect on the single-minded dedication of purpose that leads a person to such an appreciation for a flat surface coated with stones and dust.
Beyond the road, the photo showed a bucolic scene, a semi-rural idyll. The road itself looked in good shape. It really was a good grade.
"Doesn't look like that anymore," van Gisbergen said proudly, the implication being that, subsequent to the photo, he had completely destroyed it with the sort of on-the-limit driving with which he made his name after starting in the Supercars Championship as an 18-year-old in 2007 and continues to exhibit to this day.
In 2012, the motorsport writer for Sydney's Daily Telegraph described him as "the Kiwi wild child" and his driving style as "bash and barge". Jamie Whincup, the competition's most successful ever driver, with six titles, said of him in the same year, "He's always loose as hell out there," before adding, "which I think is good."
After an on-track incident in 2011, veteran driver Paul Dumbrell described him as an "oxygen thief". In 2015, then-championship contender David Reynolds said, "He's dead to me, bro, dead to me," after van Gisbergen spun him out on track.
Van Gisbergen, now 28, told the Daily Telegraph in 2012 that his style would never change. "I think that is just how we drive here in New Zealand," he said. "We just go for it. That is how I grew up racing. There is no point sitting behind someone. If you are faster than them, well, you have to get past them."
This was all prior to 2016, when he became the first New Zealander since "Gentleman" Jim Richards in 1991 to win Australasia's most prestigious motorsport competition, the Supercars Championship.
Van Gisbergen's introduction to Supercars came with a handful of races as a just-turned-18-year-old at the end of the 2007 season. By 2009, he felt like he was "almost cracking it" and a year later he broke through with a string of podium finishes and a sixth place finish in the championship. Suddenly, he was the sport's hot young talent.
Since that year, he's never finished lower than sixth. He's had another sixth, a fifth, two fourths and a second, to go with last year's win.
Just before that historic win, Richards told the Herald he thought his soon-to-be-successor had matured as a driver since his early years, singling out two races earlier in the season where van Gisbergen had settled for second, instead of pushing for a win.
"To be honest, I was a bit critical of some of the things he used to do a few years ago," Richards said. "I think a couple of years ago he wouldn't have been in this situation because he could sometimes beat himself."
This "maturity" narrative has appeared several times throughout van Gisbergen's Supercars career. It appeared in 2011, after his first race win, which was the same year Dumbrell called him an "oxygen thief" and a year prior to van Gisbergen himself saying his style would never change.
If maturity means greater caution, it's a debatable claim. It was a loaded question, then, when I asked van Gisbergen if he would always follow team orders and - for example - not push to overtake somebody if the team deemed it inappropriate.
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"Of course," he said.
The final weekend of the 2016 championship season took place in Sydney. Van Gisbergen was so far ahead of second placed Whincup that it would have taken a disaster for him not to clinch the championship over the weekend's two races. In the worst scenario - Whincup winning both - he just needed to finish in the top five.
In the first race: disaster.
"I just started the race nervous - I'd never been in the hunt for a championship before - which is weird because nothing normally fazes me like that, and I just drove cautiously and people hit me out of the way, and normally I'd just get them straight back and keep racing elbows out. But I was just timid, knowing I only had to finish fifth."
In the early laps, he was bumped back to sixth, then was given a penalty that dropped him back to 22nd, while Whincup led. Midway through the race, it appeared the championship would come down to the following day's final race.
But here comes van Gisbergen! Charging back through the field! Helped by a late safety car bringing all the cars back together! Suddenly with a few sharp passes, he's back into fifth and the championship is his, so long as he doesn't do anything stupid!
Then he passes fellow Kiwi Scott McLaughlin - Scotty - to go into fourth! His engineer, Grant McPherson - Shippy - comes over the radio, saying, "You're there, that's all you need to do."
It was the last lap. James Courtney was ahead of him in third and Scotty behind him in fifth. He undertook what he describes as a risk analysis and decided to ignore Shippy.
As risk analyses go, it seemed bad. Even if Scotty passed him on that last lap, it was almost certain nobody else would. He was guaranteed the championship if he maintained fourth or fifth, but who knew what was going to happen if he tried for third?
Then again, Scotty was attacking from behind, Courtney was going slow in front, and van Gisbergen had in his head his cautious driving from the start of the race: "Normally I never drive like that, ever," he said. "It was just silly."
He passed Courtney for third and celebrated his first championship win from the public glory of the podium, rather than the anonymity of the team garage.
This year, including van Gisbergen, there are three New Zealanders competing in the Supercars Championship and, halfway through the season, he's the worst-placed of them, in fourth.
Ahead of him, in third, is Fabian Coulthard, and leading the championship is Scott McLaughlin, an ebullient and loveably childlike figure from Hamilton, who achieved instant immortality in 2014 as a 20-year-old, with a fantastic bit of racing to win a last-lap battle with reigning champ Whincup, one of the greatest V8 drivers of all time, and then followed that up with one of the greatest ever post-race interviews.
Going into the last lap of the second race of the season, at Adelaide, the young, inexperienced McLaughlin was in a surprise second place ahead of Whincup, but Whincup was all over him, the front of his car literally under McLaughlin's rear.
McLaughlin held his nerve with a near-flawless display deep into the last lap until Whincup brilliantly passed him two bends from the end, almost forcing him into the wall. Pretty much everybody assumed that was that, including the television director, who cut to Craig Lowndes crossing the line in first at the exact moment McLaughlin was pulling back out of Whincup's slipstream, hitting the racing line, apexing the final corner and hammering home past Whincup for second.
The crowd went wild, then wilder when McLaughlin - during the subsequent live on-track interview in which he was unable to stop smiling - explained the incredible pass to tens of thousands at the track and millions more viewers of live and online video content: "I just plucked her in first, gave her some jandal and - f*** yeah!"
He immediately grabbed at his mouth in shock, then said sorry five times, including once "to all the little kids out there", his charming, boyish smile radiating both abashed contrition at the naughty word he'd said and unabashed joy at the importance of what he'd just achieved.
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Every self-respecting petrolhead parent in New Zealand at that moment hoped this delightful boy might cruise up their driveway in his V8 Volvo one Saturday night to take their daughter out to the street races in East Tamaki. In the space of just a few minutes, McLaughlin had become a star.
This was a year after van Gisbergen, once the young great hope of New Zealand motorsport, had become a sort of pariah, after announcing his retirement from Supercars, following a disagreement with his team, Stone Brothers Racing, then immediately returned from retirement at the start of the next season, with a new team.
His Supercars competitors, who just a few months before had signed a car bonnet as a farewell gift, eventually made all the right noises about forgiving him, but it's hard to say whether their noises matched their thoughts, and, regardless, the fans weren't all so diplomatic.
He got into a long legal fight with his former team that eventually ended in an out-of-court settlement. The rift with team co-owner Ross Stone was healed only this year.
Asked now if being liked is something he wants, van Gisbergen says, "I guess so. You don't want to be disliked. Some people are obviously more open, like Scotty's really good, and [teammate] Craig Lowndes, but for me, I try and win them over just with racing, cause obviously they're pretty outgoing people, whereas I'm not."
The gravel road in the photograph that van Gisbergen had been so keen to show off was a 1.5km stretch on his parents' 16ha property at Manukau, where he grew up driving things as fast as possible, alongside his dad.
In his heyday, Robert van Gisbergen - Cheese - competed in several high-profile rally events around New Zealand, even winning a few. He was known as a quality driver, but was never quite able to crack the big time.
"I had no one to teach me. My mum and dad were passionate about what I did but they had no experience in motor racing and I struggled a little bit."
The thrill of the race, though, was never a problem for Cheese. He recalls discovering a car racing game in a video parlour on his first trip to Hawaii with his wife, Shane's mother, Karen: "It just really excited me," he says. "I thought, 'This is the best video game I've ever played in a parlour.'"
He started a battle with another man. "I just had to beat this guy," he says. "I sat there for a week while we were in Hawaii and I beat this guy and of course I come back the next day and this guy comes back and beat me and I never got to meet who this guy was, but we just kept going backwards and forwards."
In other words, van Gisbergen was born to it: "He used to race around the bloody house in his baby walker," Cheese says. "Even the bloody potty. He was sliding around the kitchen in that thing. He had to slide the thing."
He started out racing quad bikes on Cheese and Karen's farm and he also had a replica McLaren go-kart his father had helped build for him. "He used to roar around the house and on the gravel road with that thing," Cheese says. "But we had a stop watch. Everything involved a stop watch. From day one."
Cheese tells a story about his son's first time racing in the Bathurst 1000, aka "The Great Race", the motor racing version of the Melbourne Cup, a race that every kid who grows up knowing the meaning of V8 thrills to.
Van Gisbergen had just turned 18, young to be taking part in the race, one that he had dreamed about since childhood. It was not only his first time competing there, but the first time he'd ever been to the track, one of the most legendarily brutal in world motorsport.
With something like reverence, or maybe awe, Cheese says: "He slept in, mate! Now, mate, that's unheard of. It's not like he couldn't sleep at all, he just slept in! Now, look, you tell anyone that story. You just wouldn't believe it. No one would believe you."
Cheese, an accountant by trade, says he's the stressful one in the family, the one who makes sure all the details are being taken care of. His son's ability to relax to the point of sleeping in for the biggest day in his life - that doesn't come from Cheese.
As manager, mentor, adviser and mate, Cheese has been a massive influence in his son's career, raising finance, building a team, and making sure that everything that's needed to be a professional racer is taken care of. It's hard to overstate how hands-on he has been.
"I don't know if I'm spoiling him or not," Cheese says. "I look at it, like, I try and make his job as easy as possible. He's got to drive the car and I sort out the rest."
When van Gisbergen's asked if he's ever worked on his mental game with a psychologist or anyone like that, he says, "Nah. They just say stupid shit. I did for one bit. It was recommended when the stuff was happening in 2012, but it just mucks with your brain. You're better off to just do it yourself. Keep it simple and have fun."
Racing is all he's ever wanted to do, he says. He's raced quad bikes, go-karts, midgets, drift cars, GT cars, and has won multiple national champion racing remote control cars. In his home on the Gold Coast, he's got a racing simulator, something like you'd see in an arcade, but very much more sophisticated. He often races online with his dad, who also has a simulator at the family home.
Cheese says: "He's got no serious lady at the moment and I don't think he will for a while, either. Hard to find a lady that will live with a man that, you know, he'd rather go and race on his simulator than go out to dinner."
In an interview with the Herald's Dale Budge last year, Shane said, "Outside of racing I prepare for the next race. Racing is really all I think about."
Success takes a certain skill and comical level of dedication, but also possibly at least one person behind you who is willing and able to dedicate their life to making sure that your skill and dedication pay off in a way that maybe they didn't quite for them.
Of his own racing career, Cheese says: "I'm happy with what I did and there's no point banging yourself over the head for what you did wrong. It's not what you did wrong - it's what you didn't know. I wasn't trained. I was a first generation racer, I suppose you could say."
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Hyper Drive zooms ahead with growth in mobile shopping
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Online retailer ‘Hyper Group’ has reported a surge in new business as it benefits from consumers shopping for an ever expanding range of products online, including car tyres.
The Hyper Group said it has recorded a steep increase in sales from new customers, primarily through it’s Hyper Drive business which along with a range of over 100,000 vehicle related products and accessories, allows vehicle owners to select, purchase and arrange the fitting of new car tyres from a network of 200 installers throughout New Zealand – all from their device of choice.
Four out of five of the new customers recruited in recent months were people who had never bought tyres online before.
Sales are up significantly year on year.
The company said it’s experience suggests online tyre retailing is gaining acceptance quickly, in contrast to the traditionally lagged online adoption in other sectors like travel and banking, as it now makes what used to be a chore, so easy.
The shift may reflect the increasing popularity of the mobile phone as a tool that allows people to shop when and where they want. Almost half the people visiting the company’s website recently have been doing so via mobile devices.
Owner and Managing Director Simon Furness says, “We have been spending a lot of money on the infrastructure around our mobile site as people are so time poor these days that they take any minute they can to organise things through their mobile device. It’s the way of the future and we have had to move with the times quickly”.
“Customers are now buying tyres while they are watching their favourite show on Netflix. There is no reason to spend an hour ringing around getting prices then booking in your car to get tyres fitted. It’s all done online through a very easy process. It’s convenient for them too. They can buy tyres online and get them fitted anywhere in NZ. We had one customer recently who bought them online then got them fitted down the road from his bach where he was for the weekend – easy and convenient”.
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Hyper Drive booming ahead in mobile business
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Online retailer 'Hyper group' has reported a surge in new business as it benefits from the trend for consumers to shop for an ever expanding range of products online.
The Hyper Group business said it has recorded a steep increase in sales from new customers, primarily in it's Hyper Drive business. Four out of five of the new customers recruited in recent months were people who had never bought tyres online before.
Sales are understood to be up significantly year on year.
The company said its experience suggests tyre retailing is transforming from the traditionally lagged online adoption in other sectors like travel and banking as it now makes the offer so easy.
The shift may reflect the increasing popularity of the mobile phone as a tool that allows people to shop when and where they want. Almost half the people visiting the company’s website site recently have been doing so via mobile devices.
Owner and Managing Director Simon Furness says "We have been spending a lot of money on the infrastructure around our mobile site as people are so time poor these days that they take any minute they can to organise things through their mobile device. Its the way of the future and we have had to move with the times quickly".
"Customers are now buying tyres while they are watching their favourite show on Netflix. There is no reason to spend an hour ringing around getting prices then booking in your car to get tyres fitted. Its all done online through a very easy process. Its convenient for them too. They can buy tyres online and get them fitted anywhere in NZ. We had one customer recently who bought them online then got them fitted down the road from his bach where he was for the weekend - easy and convenient".
Hyper Drive is a 100% kiwi owned business which works with over 200 independent garages throughout the country which are able to fit tyres that their customers order.
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Online tyre sales go from impossible to possible
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Simon Furness, founder of online tyre fitting company Hyper Drive has taken a product that is traditionally not an internet product and turned it in to one proving convenience is what is important to consumers.
With online tyre sales surging over 300% compared to this time last year consumers are liking the fact that they can shop from the comfort of their keyboard.
"Online tyre retailing enables consumers to compare products online and still get it fitted locally" Furness comments. "From research we have done consumers don't want to have to ring around trying to get prices on tyres, or go into stores to get a quote, then have to go back a few days later to get the product".
Hyperdrive.co.nz has a network of over 200 garages across the country. These garages are carefully selected to ensure quality service. "Our garage network is growing every week with enquiries from new companies wishing to become part of our Hyper Drive Fit Network".
Hyper Drive which is based in Penrose, Auckland have invested heavily in the online stock infrastructure to ensure their system shows live stock of what is available to the consumer. They have a logistics team who organise for the tyres to be sent to the garages when an order has been placed.
The entire process is very simple. The consumer enters their tyre size (or in some cases you can even enter your number plate) and a range of available tyres will appear. You choose which tyres you want, where you want to get them fitted and on what day and time. Payment is all done online then the consumer simply turns up at the booked time and their tyres will be there ready to be fitted.
"It just eliminates so much time from the traditional tyre buying process. Let's be honest, there aren't many people who enjoy buying tyres so why not make it as convenient and easy for them" says entrepreneur Simon Furness.
Hyper Drive offers all the leading tyres brands including Pirelli, Goodyear, Nexen, Hankook, Yokohama and more.
Hyper Drive is part of the online retail business Hyper Group which also operates www.hyperride.co.nz and www.hypertyres.co.nz.
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Online shopping - are NZ retailers adapting to the competition?
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| Consumers have never had it so good, thanks to an explosion of cheap, high-quality goods now available globally at the click of a mouse. But can traditional stores adapt to the competition? Andrew Laxon reports
It's called showrooming. Brent Cooper reckons he sees it at least once a day in his shop in the Albany mall, where fashion-conscious 20-somethings come in to try on a trendy Superdry T-shirt, which he sells for about $69.
Once they've chosen a style and checked their size, they walk out and buy it up to 30 per cent cheaper online.
It's one of the main reasons Cooper will close his doors tomorrow afternoon after more than 30 years in the rag trade and nine years running his family-owned Jet brand.
"Some of them are blatant enough to tell us," says the 53-year-old. "It's gut-wrenching. We're the ones paying the rent and the wages. We're not providing a service and a showroom for you to go and buy from someone overseas."
Cooper closed his other store in Sylvia Park last year. He pays close to $250,000 a year to lease his shop at Westfield's Albany mall. It didn't help that his Australian wholesaling partner went under, forcing him to pay more for stock, but he says the growth of internet shopping has had a huge effect.
Six years ago, he says, his store was the only place to buy fashionable brands like Superdry but now they are everywhere online.
"So we've become that showroom for the kids to come to. They've got 100 different options now to buy with the click of a mouse and it's the cool thing to do."
The competition doesn't come only from the big overseas sites. Cooper says two young women whose shop in the mall went under now sell the same clothes on a Facebook site from a garage. "They're buying brands and product that we're buying from Australia and because they've got no overheads, they just undercut us."
Other local retailers have also given up. Last month, wedding dress designer Sera Lilly shut down, saying she could not compete with online shopping and cheap imports from China. National children's clothing chain JK Kids went under in November, with the loss of 125 jobs at its 22 stores and online operation. Owner Ben Sproat said he could not compete as younger mothers bought their children's clothes freight-free online from Britain and America.
The closure prompted First NZ Capital retail analyst Sarndra Urlich to wonder aloud about the future of clothing stores.
"I have thought for a long time that their business is structurally under threat from the internet, mostly because I see young women in their 20s or teenagers buying stuff from (online retailers) Asos or Boohoo or whatever and circumventing the likes of Glassons," she told NBR. "Unless you have got a strong international brand, I think that whole physical store concept is very much under threat."
The damage is already widespread outside New Zealand's big cities, where traditional shops have been battered by shopping malls and the economic downturn. Whangarei-based web design consultant Dave Smyth blogged last year that he had been trying to warn local retailers of "the approaching online shopping tsunami" for the past 14 years but very few were prepared to bring their business online. He knew of two stores that had closed and an importer-wholesaler who had started selling direct to the public online because local shops didn't move his stock fast enough.
Smyth says small retailers have to start selling online and get more realistic about their prices. "To give you an example, there was a local boutique shoe store that recently closed after being a well-known presence for many years ... My wife liked a pair of boots in this store but they were $520. Choking on my lunch, I told her that the boots were overpriced for the brand and she should try online ... An hour later, she had purchased the same pair of boots from an online store in the UK for $85."
For fashion-conscious young New Zealanders who have grown up with the internet, shopping online is already a no-brainer. As Alex Gray, a 25-year-old Auckland public relations manager puts it: "Every single one of my friends shops online ... Why would I pay this price for a product in New Zealand when I know without even checking that I'll get something better online?"
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Online shopping in
New Zealand can be measured in different ways. If you include electronic downloads, such as movies and music, it could be worth about $5.5 billion a year, according to the Retailers Association. Under the more conventional measure of physical goods, it has jumped in the past five years, from just over $2 billion a year in 2009 to $3.7 billion by the end of last year
That's still only about 7 per cent of overall retail spending but the clincher for industry watchers is the growth rate.
Online spending is increasing at about 15 per cent each year, compared with 3 per cent for traditional shops or "bricks and mortar". Spending on overseas websites is lower than local sites (40 per cent to 60 per cent) but growing much faster (21 per cent to 7 per cent). Overseas goods under $400 are GST-free and look likely to stay that way - despite claims of unfairness by the Retailers Association - as the Government has pushed a review out beyond the next election.
In January, a Forsyth Barr report, Online Retail; What makes Kiwis click?, predicted online spending would rise to 9 per cent of all purchases by 2016. Author Chelsea Leadbetter says online spending will continue to outpace stores, thanks to growing local and international competition, the continued strength of the New Zealand dollar, increased use of mobile phones and the introduction of high-resolution imagery that allows consumers to see products much more clearly.
She says consumers are becoming more comfortable with security issues and reliable delivery, partly because of innovations such as "click and collect" (ordering online and collecting from a local store) and the introduction of pick-up kiosks or lockers to avoid the frustration of a missed home delivery.
Another breakthrough is NZ Post's YouShop service, which gives shoppers a British or American delivery address for websites that don't ship to New Zealand. NZ Post then arranges delivery from the US or British address.
The growth of online shopping led to fears of a "High Street Armageddon" in Britain, where online spending has hit 12 per cent of all spending and is forecast to reach 22 per cent by 2018. In May last year Britain's Centre for Retail Research predicted this increase would force one in five shops to close. In the US, where online shopping take-up is just ahead of NZ at 8 per cent, store closures have already begun. Sears department store announced in January it was closing its flagship store in downtown Chicago, the latest in about 300 store closures since 2010.
America's problem is worse because stores overexpanded in the boom leading up to the 2008 crash. But this has only highlighted a long-term trend towards fewer and smaller stores as shoppers head online. Shopping centre mogul Rick Caruso even predicted in January that traditional malls could soon become extinct, as no major indoor mall has been built in the US since 2006.
Commercial property analysts here say the outlook for New Zealand shops is brighter. Retail Consulting Group director Paul Keane, who thinks online sales have been vastly overstated, says the most likely effect on shopping malls is lower rents, as landlords realise their tenants have other options.
Metro Commercial director Nathan Male believes New Zealand will cope better than Britain because our centrally owned shopping malls can respond more decisively and Auckland, in particular, needs more shops for a growing population.
Independent shops in provincial centres are a different story. "They have to change their business model to survive."
He predicts many fashion stores will retreat to the best and biggest shopping centres and be replaced by fast-expanding takeaway food chains.
Leadbetter thinks some New Zealand companies will benefit from online sales growth. She cites Kathmandu, which is expanding in Britain using only three stores to showroom its products and drive internet sales.
Leadbetter believes some fashion chains are most at risk from internet retail giants like Asos, the British-based operation that has become the most-visited clothing website in Australia and New Zealand. It has features no local retailer can hope to match - all stock held in one place and sold globally (avoiding the losses from unseasonal weather patterns and fashion misses that plague the New Zealand industry), about 65,000 items for sale including its own labels and almost 1,000 other brands, and £35 million ($70 million) invested in technology to make its website and customer service world class. It even has a new add-on, which allows customers to compare the fit of a garment to something they already own.
Leadbetter says New Zealand retailers have to mix online and physical stores - known as "omnichannel" - to give customers what they want. She cites The Warehouse, which has launched or taken stakes in several clothing, sports and beauty sites, as a fast learner.
Richard Bush and Simon Furness run Hyperdrive, which sells car accessories and Hyperride, which sells mainly surf, skateboard and snowboard gear. The pair have converted a large chunk of their Penrose store into a warehouse for Hyperride gear - which customers collect from the front counter after ordering online - plus a dispatch centre for courier deliveries four times a day. But the Hyperdrive showroom in the middle of the shop allows customers to physically inspect tyres and mags before buying them and car stereos still have to be installed out the back.
Bush firmly backs the omnichannel model as the future of shopping. He says the company has spent millions of dollars on its website, including tens of thousands of dollars a month on new features. Half their business is now online and virtually all their customers decide what they want from the website before visiting the store.
"The consumer expectation in NZ is way ahead of what the retailers actually offer. The consumer expects to be able to go on their website, see every single item they've got in stock, photographed professionally, with a description, then hop in their car and drive down to that store, pick it up off the shelf and take it to the counter and fork out. Or order online and get it delivered."
Bush says many customers "walk in pretty much with their iPhone in their hand" and check products against overseas websites as he talks to them. He's has had his share of showroomers too, as snowboarding gear can sell for a third cheaper on US sites.
"People will come in and try on six pairs of snowboard boots for about an hour and then say, 'okay, I'll go away and think about it'. And you know exactly what they're doing."
Bush and Furness offer a global price match (excluding GST and freight), which makes them unpopular with some suppliers. But Furness maintains local retailers and wholesalers can no longer "make up" their profit margins in a transparent worldwide market.
As an example, he picks up a skateboard helmet with a $90 price tag. "Maybe you could sell this for $70 - but sell 20, not 10."
Brent Cooper is starting a new career in the horse racing industry.
He believes chain stores that have their own clothing brands - and therefore make a much bigger margin on what they sell - will survive the next few years. He used to run a wholesale division but closed it because half his retail customers shut down. He mentions a well-known independent retailer in a prime Auckland location. "I don't see how long he can stay there ... He's finding the same sort of issues."
And yes, he does understand that online shopping has been great for the average New Zealander. "That's fine. It's never going to go away and I can't do anything to stop it, but all I'd say to those consumers is, 'Don't expect the best of both worlds'."
*January figures released yesterday differ slightly but show the same trends.
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