Are brand stores and B2C’s growth a concern for the local bike shop?

The pandemic has forced more than a few hands to carefully consider prices, profit margins and thus also the viability of routes to market. With that in mind, we explore the subjects of brand stores and links in the supply chain with three independent bike retailers…

To what degree are you concerned by a tilt of the traditional distribution model towards more direct options in the face of pricing pressures in the supply chain?

Dan Parsons, Fully Charged

I remember as a child, my brother and I drooling at all the new bikes and accessories, faces pressed up against the window of the independent bike store in my hometown – a passionate and enthusiastic family-run business that my Dad and grandfather had both bought their bikes from.

This was before the internet was a thing, before Google and before brands, distributors and retailers had websites and the ability to market and sell online. Before life for the retailer got complicated. “Omni-channel” was certainly not an expression on the tip of anybody’s tongue.

Fast forward thirty years, throw a pandemic and Brexit into the mix and it’s a very different environment. Every major town or city has a recognisable chain cycle store in it, all brands are online and some have chosen to sell D2C, blurring the lines of the traditional distribution model.

The bricks and mortar retailer is experiencing stress like never before, with demand through the roof, supply through the floor, prices rising, margins being squeezed and greater competition than ever. In some cases that competition coming directly from the very brands taking up the valuable space on their shop floor.

The disparity in how brands have dealt with supply issues and price changes is enormous.

Some have been good, sympathetic to the difficult situation that of the retailer doing daily customer service for their brand as we fight to keep patient customers happy whilst they wait for their new bikes, parts and accessories. The better brands have been giving plenty of notice regarding price increases, in most cases honouring prices of pre-ordered product delivered late due to the supply issues and most importantly clear, consistent and regular communication that we can share with our customers.

Others have been bad, with irregular updates having to be prized out from their overstretched and ill- informed reps and short-notice price rises at random intervals.

Then there’s the downright ugly;  brands conducting monopolistic business practises by controlling stock  and choosing to feed their own D2C channel ahead of making product available to fulfil retailer pre-orders – orders which have been presold to deposited customers on the back of the retailer’s costly and successful brand-benefiting marketing campaigns. Unable to fulfil orders and with nothing to communicate to the growing list of incredibly patient customers, almost unbelievably, some have cancelled and gone direct to the very brands refusing to supply the retailer. And guess where these customers are coming when they need service and support?

Brands do need to consider more the vital role of the retailer in the supply chain and the effects of their actions. To say that I’m concerned about the future of the cycling industry and the place of the retailer is an  understatement.

And the bicycle store of my childhood? Long since closed – squeezed out by the pressures of chain stores and online retail. The building became a bank – and guess what, it’s now closing due to a shift to online business.

Greg Freeman, Moose Cycles

I used to be concerned about the direct route, however the last two years have been our best ever and so currently I’m less worried. I do feel however going forwards we are working with brands that are already competitive on price to a degree with the direct players and with the advantage that a local point of contact brings for warranty and repair. I do wish our brand partners would tell consumers the benefits of their dealer network. We do so much more in terms of warranty and problem solving that the direct brand could. Most consumers don’t realise this until they have a problem. The bikes we sell are expensive and quite complicated and we definitely add value to the purchase. I think the problem is that some of the retailers are no better than direct players in that most of their business is mail order, so they are not as much of an asset as we are.

Christopher Dee, Northside Bikes

I am only a little concerned about this and the impact it has on the shop as the majority of customers live local and take advantage of having a bike shop on their doorstep. A lot of the rest who travel from further afield want to either support a local business, or have the personal service that you get from a shop. A big concern is the value consumers get in terms of service and quality of bike, along with the environmental impact of more shipping.

Brand stores have been in and out of favour over the years – has this route ever appealed to you and if not, why not?

Greg Freeman, Moose Cycles

I have never thought the brand stores are a good idea, nor putting all your eggs in one basket. Over the years there are few that have been successful.

Christopher Dee, Northside Bikes

This has never been something we have considered and its unappealing now as, while there are a number of great labels, own brand stores can never quite meet all the needs of the public. We also do a lot of community work and provide low-cost parts and services that a brand partnership might not allow for financially.

Are there opportunities for the indie bike shop even when it comes to handling direct to consumer labels?

Greg Freeman, Moose Cycles

I have no interest in dealing with B2C brands and sorting out their problems and feel that anyone who does is helping the demise of shops as we know them. It’s very much short term and not a future I would want. I can see it being of interest maybe to the repair only operators who have no interest in the current way of things.

Christopher Dee, Northside Bikes

There are potentially a number of opportunities for indie stores. We currently work with a B2C that insists on all its bikes being built at a local shop and fitted for the customer in store. Promoting bike builds and even bike maintenance workshops to B2C customers is also an area we are looking to grow as these brands become bigger.

Have you considered own branded goods or direct imports of your own?

Greg Freeman, Moose Cycles

I have never considered starting my own brand, there are way too many brands already. Very few have  survived the test of time without serious players behind them and without something unique from an engineering perspective to market.

Christopher Dee, Northside Bikes

Not seriously.