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iceman2058
5/28/2014 3:08pm
5/28/2014 3:08pm
Edited Date/Time
8/18/2014 6:26am
For a few years now, online sales of mountain bike components has turned into one of the principle means of acquiring new bling for your bike. More recently, spearheaded by the likes of Canyon, whole bikes are being sold over the internet as well, completely foregoing the traditional channels of distribution. Of course, the main advantage of the consumer-direct model is a significant drop in prices, and that is never more true than on whole bikes. Most consumer-direct brands offer top-of-the-line spec for mid-range bike shop prices at most, which on paper at least seems like such a good deal that's it's impossible to ignore.
More recently we've started to see a move towards consumer-direct even by traditionally distributed companies, the most high-profile of which is no doubt Commencal. Tired of being "strong-armed by distribution", Max Commencal took the decision to pull his bikes from the shop floors to offer them direct to the consumer instead, citing the impossibility of "continuing to offer 4000 EUR bikes for 6000 EUR".
Where does this leave the bike shops? Are they destined to become simple service points, with less and less actual product available? We've already noted a fairly distinct drop in availability and choice of stuff in shops over the past few years, will whole bikes eventually follow suit? Is there enough money in service to allow shops to survive without selling much in terms of new bikes and parts? And if not, who will service our bikes going forward?
Are you ready to buy a bike you've never seen, and to send it back in a box when you need major repairs or to evaluate warranty coverage following a fault? What about the advice and shared experience available from a good shop? Would you substitute that for an internet forum?
In short, have prices become so high on bikes that a shake-up of the distribution model is inevitable, or is online sales of bikes only for a few brave riders? Will online sales plateau at the current level, or is further growth inevitable? Have your say!
More recently we've started to see a move towards consumer-direct even by traditionally distributed companies, the most high-profile of which is no doubt Commencal. Tired of being "strong-armed by distribution", Max Commencal took the decision to pull his bikes from the shop floors to offer them direct to the consumer instead, citing the impossibility of "continuing to offer 4000 EUR bikes for 6000 EUR".
Where does this leave the bike shops? Are they destined to become simple service points, with less and less actual product available? We've already noted a fairly distinct drop in availability and choice of stuff in shops over the past few years, will whole bikes eventually follow suit? Is there enough money in service to allow shops to survive without selling much in terms of new bikes and parts? And if not, who will service our bikes going forward?
Are you ready to buy a bike you've never seen, and to send it back in a box when you need major repairs or to evaluate warranty coverage following a fault? What about the advice and shared experience available from a good shop? Would you substitute that for an internet forum?
In short, have prices become so high on bikes that a shake-up of the distribution model is inevitable, or is online sales of bikes only for a few brave riders? Will online sales plateau at the current level, or is further growth inevitable? Have your say!
I think the point people are missing is that direct sales is taking off in the high-end bike market. Local shops can't afford to stock a whole floor with $3000 bikes, it's just not economical. That's why for years you'd see "That One Bike", sitting up on a pedestal, whether it was DH, XC, or Road, it was a coveted piece of display/equipment that little kids would want to go visit. It's like a car dealership having "That One Muscle Car" out front, but the whole lot is full of $20,000 sedans.
The LBS will always be needed, because the money is made on the "consumer" bikes, which act mostly as a utilitarian purchase for both transport and entertainment. Those of us who are serious athletes (ride 3+ times a week for fun) or racers are not the average demographic. Granted, this is a broadstroke and doesn't apply to places where the outdoor sports scene is "the scene" e.g. Boulder CO, Stowe VT, Whister, etc - those places have high volume demand for top-tier equipment and thus, can stock that kind of gear.
At the end of the day though, a lot of people don't live in these large epicenters of activity, and many of us (myself included) live in a small town with limited resources/access to high-end equipment - and this is where direct sales is the best thing ever. Because no matter if I were to buy a race-ready bike from my LBS or online, if something was wrong, I'd have to call the company anyways due to the fact that no one locally (less than a 30-40 minute drive) can really be of assistance. So, in summation, the LBS will always have it's place, its roll will just change with demand, and DM will also have its place, but it isn't going to take over.
Distributors are not the problem- the uneducated consumer is the problem.
the small, mostly service oriented shops will keep their loyal customer base and continue to buy what they need from the distributors. the distributors make it easy, the shop keeps overhead down, its a proven and streamlined model. they might get lucky and gain a little more business/higher end business as their customers in turn are able to score a high end bike MFG direct/more people buy bikes, but these customers still want the face to face with the local shops. half the reason i go into my local shop is to BS with other local riders. at this level, i think MFG direct sales can't do anything but help, it in a sense just extends the shops reach a little further. the smart ones, might even sign on as a "factory authorized service center" to stock a few things like hangers and bearing kits for a specific brand that has no conventional dealer network; it just takes the shop knowing what they are getting into and not doing something stupid like buying 10 years worth of bearings for a product with a 2 year life cycle....
the mid range shops and chain shops will get hurt the worst. they aren't big enough to get an online presence to subsidize the slower days, they aren't "authorized" to sell certain brands online, and they are lacking the diversity of product choice that a larger shop offers. if their service game is subpar, its gonna be a long hard sell, and they will really have to occupy their niche smartly so they aren't glossed over for a shop with a more personalized service experience or a shop that just simply has more stuff on the shelf to sell.
the big independent shops already have most of their inventory available for sale online, if you're not selling online these days and just waiting for feet to stumble in the door, you are going to fold quickly as a big shop which has big overhead, big accounts payable, and big numbers of employees. look at it this way, i have time to go to the local shop once, maybe twice a week to get the usuals (tubes, lube, gels, impulse bling, tire kicking) but the internet is sitting in my pocket 24-7, in front of me 40+ hours a week at work, and this isn't even taking into account the time we spend on enthusiast based forums researching and making product decisions. point is, buying stuff online and getting it shipped is both cheaper and easier than going into a store that may/may not have it the moment you're in the store. i don't really see a threat from mfg direct sales at this level, these are the shops that have struck the balance of having lots of stuff on hand, servicing the customer effectively, and moving product in a timely, profitable manner regardless of whether or not the customer is physically staring them in the face.
the major chain stores/mfg direct store fronts will have to spend increased marketing dollars for diminished returns, think about it this way: pretty much everyone already knows who specialized/trek/giant is. they could double their marketing expenditure, but its not going to double their sales anymore, they simply have grown too large to see gains like that. their focus is now on keeping people from exploring the other options out there, be it through creative marketing that engenders emotional attachment to a specific brand ethos, selling the cycling experience (BG Fit anyone?) or the tried and true "we're just the biggest best" approach and copied/bought all the smaller brands that threatened our dominance. mfg direct sales (from the smaller competitors) will just snipe the occasional "on the fence" customer who wasn't sure if they wanted to be "mainstream" or wants to feel a little more individuality. sometimes NOT buying a brand can be a powerful statement, especially if you're from a certain brands HQ area.
where is all this going? i don't really know...but sum it up to say that the internet isn't necessarily bad, it can be a POWERFUL tool to expand a shop/brand presence. is the mfg-->distributor/mailorder monster-->quaint and cute LBS model we've come to know and love going anywhere? no, because "pyramid" sales is one of the oldest, most proven models in the book; any given product will find a hundred ways to trickle into the hands of the end consumer. the only people who have something to lose are the one's that are already ignoring the rules of success.
i will say this: i would NEVER buy a bike without at least seeing it in person first, you just don't know how its going to fit or ride, and while the numbers and specs might look cool on paper...your dollar is better spent on something you have tried out (and that the LBS will have parts for in a pinch).
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