Specialized Goes Sort-Of Direct - Click and Collect

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3/15/2019 3:27 PM
Edited Date/Time: 3/15/2019 3:33 PM

I received an email from a shop owner last week about Specialized going direct and he had some thoughts about it in his podcast, I had seen numerous google ads from Specialized with a "buy it now" message, but now the news is official via a press release sent out by the brand that they're sort of going direct with their click and collect program.

For Immediate Release
SPECIALIZED LAUNCHES USA NATIONAL CLICK AND COLLECT PROGRAM

Specialized Integrated Marketplace allows rider to purchase online and pick up in store.
MORGAN HILL, Calif., March 15, 2019 – Today Specialized announced the roll out of a national Click and Collect program. Beginning March 15th, available to all Specialized retailers is the option to join a program that connects Specialized purchases made online to pick up in their store. Riders will have the option to purchase both bikes and equipment on Specialized.com as well as select which retailer will receive the order for in store pick up. This is the next step of Specialized’s Integrated Marketplace Strategy—working together with its retailers to create a seamless rider journey.

“Today, with over 50% of the purchase journeys initiated online, we have to evolve and adapt the ways we work together with our retailers to serve the rider,” said Jeff McGuane, USA Market Leader. “Over the past 3 years, we have invested significantly into technologies that enable our marketing to drive more riders into our retailer’s doors.”

The first part of the strategy was implemented in January 2017 with the launch of S-connect & Find Nearby. This allowed riders to have visibility to retailers’ inventory directly through Specialized.com. Since its launch, S-connect & Find Nearby has had over 2 million users and continues to drive riders to retail with the intent to purchase knowing product is in store and available. The addition of Click and Collect is a huge step forward for Specialized and they are confident it will drive riders to IBD partner stores.

“Our rider-facing marketing is the strongest it has ever been, and the ability to offer the rider the convenient option to “buy now, pick up in-store” alongside “find nearby” will deliver more convenience to the rider resulting in a seamless experience,” said Charles Bisaillon, Global Sales Operations Leader.

The roll out of Click and Collect has been well received by Specialized retailers. Matt Ford, owner of Rock N’ Road, a multi-location IBD in Orange County, CA said, “Click and Collect is a sign of our times! We are glad that Specialized has adopted this feature and is giving us the opportunity to reach new customers. We look forward to building strong relationships with all our Click and Collect customers and adding this new revenue stream to our business."

Alongside investments in Brand and Innovation, the cornerstone of the Integrated Marketplace Strategy at Specialized will be maintaining a strong working relationship with Retail Partners. Over the next 12 months, Specialized will continue to invest in new digital solutions to drive increased awareness and create new leads for retail partners. Already, additional investments in digital and social networks have helped connect and boost Specialized’s combined reach to over 1.6 million riders across the nation.

“Ultimately, our desire is to earn the position of brand of choice and for our retailers to think of Specialized as the growth platform for their business,” said Jeff McGuane, USA Market Leader.

About Specialized:
Specialized was founded in 1974 by riders for riders. Based in Northern California, we focus on the rider’s need for functional and technically advanced products that provide a performance benefit.

Visit: www.specialized.com







What Do You Think About Specialized Going to Click and Collect

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3/15/2019 3:37 PM

What kind of compensation or lack there of is the shop getting in this new relationship?

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3/15/2019 7:25 PM

skiskateshane wrote:

What kind of compensation or lack there of is the shop getting in this new relationship?

The margin is shared between Specialized and the retailer with zero risk to the retailer. It seems to me like a slightly more efficient way to purchase Specialized products but without the services and personal experience that a shop provides pre-purchase.

Curious to see how many more purchases this will lead to vs. going to or simply calling a shop to place the order with the exact same shipping times, but I guess this is where the retail environment is headed and they're obviously doing it for a reason.

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3/16/2019 2:27 AM

Hope to have the same opportunity in Europe and especially in my Country, because "Specialized Italy" is terrible..

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3/16/2019 3:20 AM
Edited Date/Time: 3/16/2019 3:35 AM

(Some of this is after listening to the podcast)
If its anything like Giant do in the UK its a super easy sale for shops and in the case of Giant the same margin too.
Albeit Spec' are only giving 75%, but that's not unfair. Plus if the shop is any good they'll gain a long term customer too and building bikes from a box is not hard (especially for mtbs)... But you should never chastise as customer for where they buy. If they come into your shop charge them for fitting parts they bought online and give them reasons for using your services again.

I think the use of 'direct sale' here is misunderstood. The customer does not get the bike shipped to them. Click and collect still requires them to go in to a store to finalise the purchase.


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3/16/2019 7:08 AM

skiskateshane wrote:

What kind of compensation or lack there of is the shop getting in this new relationship?

johnsonleslini wrote:

The margin is shared between Specialized and the retailer with zero risk to the retailer. It seems to me like a slightly more efficient way to purchase Specialized products but without the services and personal experience that a shop provides pre-purchase.

Curious to see how many more purchases this will lead to vs. going to or simply calling a shop to place the order with the exact same shipping times, but I guess this is where the retail environment is headed and they're obviously doing it for a reason.

The average high end bike is not an impulse buy and I can’t imagine this affecting the normal market much but there are some people who impulsively buy bikes and I’m sure specialized realized they were missing out on that market

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3/16/2019 8:15 AM

TimBud wrote:

(Some of this is after listening to the podcast)
If its anything like Giant do in the UK its a super easy sale for shops and in the case of Giant the same margin too.
Albeit Spec' are only giving 75%, but that's not unfair. Plus if the shop is any good they'll gain a long term customer too and building bikes from a box is not hard (especially for mtbs)... But you should never chastise as customer for where they buy. If they come into your shop charge them for fitting parts they bought online and give them reasons for using your services again.

I think the use of 'direct sale' here is misunderstood. The customer does not get the bike shipped to them. Click and collect still requires them to go in to a store to finalise the purchase.


Good point, especially that shops get to just watch sales roll in without investing any time in customer interaction beforehand. Surely any loss in margins will be made up for with that fact alone, not to mention the opportunity to then build relationships with those customers. Seems like a win-win-win to me.

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3/16/2019 10:10 AM

TimBud wrote:

(Some of this is after listening to the podcast)
If its anything like Giant do in the UK its a super easy sale for shops and in the case of Giant the same margin too.
Albeit Spec' are only giving 75%, but that's not unfair. Plus if the shop is any good they'll gain a long term customer too and building bikes from a box is not hard (especially for mtbs)... But you should never chastise as customer for where they buy. If they come into your shop charge them for fitting parts they bought online and give them reasons for using your services again.

I think the use of 'direct sale' here is misunderstood. The customer does not get the bike shipped to them. Click and collect still requires them to go in to a store to finalise the purchase.


The high end Specialized bikes are shipped as frames and built from scratch so it really depends on the level of bike purchased for the level of effort on the shop side.

The problem with this model is that they are still not price competitive with Canyon or YT. Bike shops will naturally migrate to lower end bikes because those buyers need assistance in sizing, style, and level of bike. For the high end there is very little value in a shop for most buyers. They have enough experience and a large enough network to figure out what they want and or need.

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3/16/2019 10:29 AM

Salespunk wrote:

The high end Specialized bikes are shipped as frames and built from scratch so it really depends on the level of bike purchased for the level of effort on the shop side.

The problem with this model is that they are still not price competitive with Canyon or YT. Bike shops will naturally migrate to lower end bikes because those buyers need assistance in sizing, style, and level of bike. For the high end there is very little value in a shop for most buyers. They have enough experience and a large enough network to figure out what they want and or need.

Since when is Specialized shipping a complete high end bike as a frameset + separate gruppo? This was never the case when I worked in a Specialized shop... it was always the opposite- S-Works builds were as complete as possible.

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3/16/2019 12:58 PM

skiskateshane wrote:

What kind of compensation or lack there of is the shop getting in this new relationship?

Specialized is sayin its shared compensation and zero risk to shops. What it really is is that the shop gets account credits when someone "clicks." The shop can then use the credits for future purchases, which to me is a real kick in the beans to shop owners. Pretty tough to feed your family with account credits.

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3/16/2019 3:58 PM

TimBud wrote:

(Some of this is after listening to the podcast)
If its anything like Giant do in the UK its a super easy sale for shops and in the case of Giant the same margin too.
Albeit Spec' are only giving 75%, but that's not unfair. Plus if the shop is any good they'll gain a long term customer too and building bikes from a box is not hard (especially for mtbs)... But you should never chastise as customer for where they buy. If they come into your shop charge them for fitting parts they bought online and give them reasons for using your services again.

I think the use of 'direct sale' here is misunderstood. The customer does not get the bike shipped to them. Click and collect still requires them to go in to a store to finalise the purchase.


Salespunk wrote:

The high end Specialized bikes are shipped as frames and built from scratch so it really depends on the level of bike purchased for the level of effort on the shop side.

The problem with this model is that they are still not price competitive with Canyon or YT. Bike shops will naturally migrate to lower end bikes because those buyers need assistance in sizing, style, and level of bike. For the high end there is very little value in a shop for most buyers. They have enough experience and a large enough network to figure out what they want and or need.

onenerdykid* wrote:

Since when is Specialized shipping a complete high end bike as a frameset + separate gruppo? This was never the case when I worked in a Specialized shop... it was always the opposite- S-Works builds were as complete as possible.

Not sure when it started, but I know for a fact since I pulled mine from the box along with five others. It is now called a "pro build" and the shops receive a set amount of revenue direct from Specialized for each build. It is a significant amount of money. Very different from the approach of Canyon or Santa Cruz for example.

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3/16/2019 6:31 PM
Edited Date/Time: 3/17/2019 7:48 AM

But, when you consider a stocking dealer is very rarely going to have all the inventory on the floor paid for, a credit on the account means sending less money to Specialized...

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3/16/2019 8:13 PM

Just put demos in the shops for looking, riding and sizing and then click buy and ship. Shop gets a % and doesn’t have to carry lots of inventory.

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3/16/2019 9:12 PM

I've built a few frame up specials. Typically high end special jobs. S-Works stuff.

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3/17/2019 10:38 AM

There's a lot of mis-information in the comments here.

1) Specialized DOES NOT pay shops to build any bike.

2) Yes, higher end Specialized bikes are coming as what they call "Shop Built" meaning it's a frame and a kit and about a 3 hour build for a mountain bike built well.

3) It is not 'zero risk' to the retailer. If the customer orders the wrong bike or simply decides they don't want it, the shop gets paid $75 to send it back. That's $75 to build, set-up with customer, manage the return, and re-box the bike. That's at least 5 hours of shop time. For $75...

4) Yes, they are issuing account credits. That is like getting paid late for work that has already been done. 'I'll gladly pay you tomorrow for a hamburger today'. No thanks.

5) Shops are not just 'watching the sales roll in'. We're taking a credit of 75% of our regular margin--anywhere from 28-35 points. Do the math on the build and delivery time. It's a wash in a lot of cases to take this margin reduction.

I've managed a shop which carries Specialized for about 10 years. In theory, yes a dealer would have to hold less inventory, but in reality, companies like Specialized require a very large pre-season buy in from dealers every year regardless of clink-and-collect type programs.

I absolutely think there is a place for this model of delivery, but the math needs some tweaking.

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3/17/2019 10:59 AM
Edited Date/Time: 3/17/2019 2:29 PM

3hrs to build a bike from a kit... Thats pretty slow!
We do full strip, clean and rebuild in that time (minus fork/shock service and brake bleeds). Barring anything unforseen, its super achievable target. (for reference, thats service work... not new build)

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3/17/2019 12:43 PM

TimBud wrote:

3hrs to build a bike from a kit... Thats pretty slow!
We do full strip, clean and rebuild in that time (minus fork/shock service and brake bleeds). Barring anything unforseen, its super achievable target. (for reference, thats service work... not new build)

If a full suspension bike with internal routing and hydraulic lines is built well, it's not slow at all for a frame-up (i.e. brakes trimmed and bled, dropper trimmed and bled (if reverb), caliper pistons lubed and exercised). Sure, we can slap a bike together in an hour, but that's not doing anyone any favors. AND, 'unforseen' is the new normal. A lot of the time, a brake needs to be warrantied or something is missing or wrong with the bike. That has to be factored in.

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3/17/2019 2:35 PM
Edited Date/Time: 3/18/2019 12:12 AM

Just "Slapping" a bike together can take as little as 15 mins. (edit: a regular build does take more time, but certainly not anywhere near 3 hours)

In my company 3hrs would be considered slow for the kind of build you mention. If we factored in every potential problem and worried about them we'd never build any bikes... there's got to be a limit to planning for snafu's and if you're getting the same issues every bike then you should to be kicking arse with your suppliers.
I regularly have to trim brake hoses from new and its super rare to need to bleed the brake after. And worst case a lever bleed takes no time.
A decent and practiced mechanic can be (and should be) super efficient, the only real things that can add time are the little 'can you just do...' requests by the customer.



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3/17/2019 7:50 PM

bmoc97209 wrote:

There's a lot of mis-information in the comments here.

1) Specialized DOES NOT pay shops to build any bike.

2) Yes, higher end Specialized bikes are coming as what they call "Shop Built" meaning it's a frame and a kit and about a 3 hour build for a mountain bike built well.

3) It is not 'zero risk' to the retailer. If the customer orders the wrong bike or simply decides they don't want it, the shop gets paid $75 to send it back. That's $75 to build, set-up with customer, manage the return, and re-box the bike. That's at least 5 hours of shop time. For $75...

4) Yes, they are issuing account credits. That is like getting paid late for work that has already been done. 'I'll gladly pay you tomorrow for a hamburger today'. No thanks.

5) Shops are not just 'watching the sales roll in'. We're taking a credit of 75% of our regular margin--anywhere from 28-35 points. Do the math on the build and delivery time. It's a wash in a lot of cases to take this margin reduction.

I've managed a shop which carries Specialized for about 10 years. In theory, yes a dealer would have to hold less inventory, but in reality, companies like Specialized require a very large pre-season buy in from dealers every year regardless of clink-and-collect type programs.

I absolutely think there is a place for this model of delivery, but the math needs some tweaking.

3) Five hours?? First, the vast majority of bikes will not be S-Works and any somewhat experienced shop should be able to have a box bike complete within an hour. You already mentioned they aren't paying for this in the first place, so treat it like any other regular bike order. Reboxing is an hour (at most), and I'm not really sure how any other part of that process adds up to anything more than a second hour. But sure, I guess in the rare cases of these returns, $75 is on the slim side.

4) Unless a shop either has cash flow issues or is planning on ditching Specialized the next year, a credit in this case offers nearly the same value as any account receivable.

5) Except they are... sort of like those glorious moments when a customer walks in already knowing exactly what they want and pulling out their credit card. But even better. And with Spec. covering tax/ some other fees and shipping that 75% is worth more than just 3/4 of your standard margin.

As easy as it is to have negative opinions about the brand, I just don't see how this isn't only a positive little opportunity for everyone involved. Unless it leads to a shitshow of outstanding circumstances I guess but we'll see how it goes.

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3/18/2019 7:15 AM

johnsonleslini wrote:

3) Five hours?? First, the vast majority of bikes will not be S-Works and any somewhat experienced shop should be able to have a box bike complete within an hour. You already mentioned they aren't paying for this in the first place, so treat it like any other regular bike order. Reboxing is an hour (at most), and I'm not really sure how any other part of that process adds up to anything more than a second hour. But sure, I guess in the rare cases of these returns, $75 is on the slim side.

4) Unless a shop either has cash flow issues or is planning on ditching Specialized the next year, a credit in this case offers nearly the same value as any account receivable.

5) Except they are... sort of like those glorious moments when a customer walks in already knowing exactly what they want and pulling out their credit card. But even better. And with Spec. covering tax/ some other fees and shipping that 75% is worth more than just 3/4 of your standard margin.

As easy as it is to have negative opinions about the brand, I just don't see how this isn't only a positive little opportunity for everyone involved. Unless it leads to a shitshow of outstanding circumstances I guess but we'll see how it goes.

It's not just S-Works that are frame-up builds now. Regardless, 2 hours doesn't come close to build, customer set-up/sale, and re-box. Let's say it does, we still lost money on the deal. I'm not sure what kind of frame-up build you are doing on a mountain bike in 1 hour--not one that I would want to ride. That's a shoddy build and a major disservice to customers.

I don't have a negative opinion about the brand. They make great product and support their dealers. I just think the math is off on this model. I also think many consumers have no idea about the margins shops work with and think bike shops are raking it in. If you've ever worked in a shop, you know this isn't the case and that any margin reduction is a challenge.

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3/18/2019 12:31 PM

I hope Intense applied for a patent for their hybrid sales model!

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3/18/2019 2:28 PM
Edited Date/Time: 3/18/2019 2:29 PM

Specialized is keeping their brand in the online game and also allowing shops to have a crack at that customer. Selling direct would have been a kick in the nuts to a shop owner, but at least this way he gets a shot at upselling that buyer or getting him to come back because of the cool vibe in the store. Sure, the dealer is sharing profit and maybe the manner in which it is paid isn't ideal, but the dealer is still benefiting from a pretty small amount of effort here.
It's not a perfect scenario for the shop owner, but the only "perfect" scenario would be the absence of any online sales presence by Specialized. Doing that in 2019 is like giving away market share on purpose.

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3/19/2019 12:24 PM

bmoc97209 wrote:

It's not just S-Works that are frame-up builds now. Regardless, 2 hours doesn't come close to build, customer set-up/sale, and re-box. Let's say it does, we still lost money on the deal. I'm not sure what kind of frame-up build you are doing on a mountain bike in 1 hour--not one that I would want to ride. That's a shoddy build and a major disservice to customers.

I don't have a negative opinion about the brand. They make great product and support their dealers. I just think the math is off on this model. I also think many consumers have no idea about the margins shops work with and think bike shops are raking it in. If you've ever worked in a shop, you know this isn't the case and that any margin reduction is a challenge.

I stand by my work and put my name to everything that leaves my workshop.
It is not shoddy in any way. Ever. If it was, I would not be in my position.

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3/19/2019 12:49 PM

bmoc97209 wrote:

It's not just S-Works that are frame-up builds now. Regardless, 2 hours doesn't come close to build, customer set-up/sale, and re-box. Let's say it does, we still lost money on the deal. I'm not sure what kind of frame-up build you are doing on a mountain bike in 1 hour--not one that I would want to ride. That's a shoddy build and a major disservice to customers.

I don't have a negative opinion about the brand. They make great product and support their dealers. I just think the math is off on this model. I also think many consumers have no idea about the margins shops work with and think bike shops are raking it in. If you've ever worked in a shop, you know this isn't the case and that any margin reduction is a challenge.

You're right about generally losing money in the event of a return, especially a frame-up build return. Except obviously most of these bikes will not be returned, and it will be rare for the type of customer buying a high end bike that requires a frame-up build to do it through click-and-collect.

Most cases will be: shop receives the order, builds the bike (and yes, standard builds should take under an hour for an experienced builder), customer picks it up, spend the typical 15 minutes setting sag and fitting. Beyond that is the opportunity to cross-sell and then establish a new relationship because they will be back. Receive closer to 80% of the usual margin without a minute spent on the sales process. I've worked in shops for a while and currently a Spec. dealer, but I'm prepared to eat my shoe if I'm wrong of course. Mostly I'm curious to see how many of these actually happen.

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3/19/2019 1:20 PM

Question for those at Specialized shops: How do you think negotiating is going to transpire with "Click and Collect"?

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3/19/2019 3:13 PM

I work at a Trek dealer and they have have had something similar for a while now... We haven't had that many bikes sold that way so far... My guess is that for a lot of non-serious riders, there's a lot of noise on the web to filter through.. And a lot of serious riders still like going to a good shop if they have one..

All this really does is give the consumer another way to get a bike, and the shops don't get hung out to dry...

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3/19/2019 10:02 PM

Brian_Peterson wrote:

I work at a Trek dealer and they have have had something similar for a while now... We haven't had that many bikes sold that way so far... My guess is that for a lot of non-serious riders, there's a lot of noise on the web to filter through.. And a lot of serious riders still like going to a good shop if they have one..

All this really does is give the consumer another way to get a bike, and the shops don't get hung out to dry...

Why do have to go and make sense while we're trying to rant?

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3/19/2019 11:20 PM

Brian_Peterson wrote:

I work at a Trek dealer and they have have had something similar for a while now... We haven't had that many bikes sold that way so far... My guess is that for a lot of non-serious riders, there's a lot of noise on the web to filter through.. And a lot of serious riders still like going to a good shop if they have one..

All this really does is give the consumer another way to get a bike, and the shops don't get hung out to dry...

Big Bird wrote:

Why do have to go and make sense while we're trying to rant?

Sorry, it's what I do...

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3/22/2019 8:12 PM

Just reading this thread now, bmoc is on point with his time frame for the “shop” build bikes. 1hr would be a barely rideable bike. These bikes come in a box, levers and calipers are not connected, tires are off, bb is out, no cables are routed, fork is uncut. It is a full scratch build, not a standard build like many boxed bikes.

Just getting everything out of the packaging and setting up a clean work area to start assembling is going to be 10-20 minutes.

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