Ask the Boss(es): IceBike* crowd grills the Madison Sportline directors

During Icebike, Madison Sportline’s directors have taken the brave and welcome step to take on a Q&A session from retail partners of the distribution giant. CI.N sat in on yesterday’s session with a view to learning more about the direction of this particular retailer supplier relationship. Here are our highlights:

What, in Madison’s view, are the key challenges for 2018 and how can you help us resolve them?

Answered by Dominic Langan, MD

“It’s tough, for sure, I think in part due to lacking consumer confidence. The internet is not going away, so a web presence is vital. In store experience must show some difference over your competition – that’s why we’re bringing forward things like Zwift, DNA analysis and bike fitting assistance. Many think Zwift is an odd one, but it’s engaging customers in new ways. What consumers want is changing.

“Then there’s things like our Freewheel and Partner Store Programmes; these are designed to bring the network together. There’s some brilliant businesses out there that will do better with this unity.

“Brexit has in part been blamed, the news is constantly miserable; but it’s not just cycling that’s down, many segments of retail are suffering. The hold on spending will come to an end, though. The UCI’s delayed approval of discs for road saw many hold back on road bike purchases, but that’s now moving forwards. I think service too is key, people need reasons to visit a store.”

“Q1 has thus far seen positive growth. There’s certainly an element of talking the business down into a depression that’s not entirely necessary and that’s not always an accurate portrayal.”

Is there not a better way to handle warranty issues for Irish dealers? My carriage cost can often be prohibitive and i’m having to de-list lines as a result. 

Answered by Adrian Phillips, brand director

“That’s a point well made, i’m sure we can begin to address this.”

Is a consolidation of the UK and Irish bike retail markets required to see a return to profitability for many?

Answered by Dominic Langan, MD

“The is a bit too much market noise. The mainstream media is still saying cycling is booming when it’s not, which I’m sure saw a lot of people enter without too much idea of what they were doing. There are some enthusiast that have entered that are just not good retailers.

“I have frustrations here as I’ve seen a lot of retailers buying up bankruptcy stock, which has led to an awful blunderbus ranging in some stores. That means six saddle brands all at similar price points and all due to credit availability or this kind of stock availability at present. This is in part why we developed the Partner Programme.

“Good stores think about the customer journey and their ranging in store. Consumers are absolutely used to well merchandised and thoughtfully-ranged shopping experiences, as seen elsewhere on the high street.

“I’d like to see from stores more forethought into a year-round promotional calendar and promotions and displays that are reviewed every week to keep consumers engaged.

“From my point of view, yes, I think a cull of sorts has been needed. The net result, however, isn’t just stores closing, many are opening too and that’s perhaps not as widely talked about at present. The U.S. market too is seeing rapid consolidation and perhaps worse than we are here.”

I have been in the trade for many years and have in that time sold a lot of Ridgeback Bikes. But it seems as though sales are now declining for my store. My local Decathlon is shifting a lot of bikes in this price bracket – what would you say is the best way to face up to this competition?

Answered by Dominic Langan, MD, Mark Pippin, bike director and Kellie Parsons, Marketing Director

“The Decathlon model is a totally different to what we’re shooting for. There’s no middle entity there. That’s why we’ve now challenged new recruit Mark Pippin to assess carefully how we can enable our partners to better compete. We won’t, however, compromise on quality, there are smarter ways to hit a price point – whether it be tweaks to fine tuned things like paint, or smarter shipping methods reducing landed costs. It’s hard to compete with the likes of Decathlon, so we perhaps prefer to focus on our brand equity. People subscribe to that. You can ride a B Twin, sure, but are you going to feel good about it?

“Decathlon produce a very European product. Ours work for the UK market, but we’re not shooting for that cheaper price in the same way.”

MP
“I can affect things with our buying, it’s not an insurmountable challenge to better compete. We’ll look at spec, lead times, all kinds of things, but without changing the business model we won’t compete directly with Decathlon. I’m more interested in adding value for our customers in the marketplace.”

KP
“I think this is in part why our Freewheel programme is attractive to so many of you. We don’t want to become a brand that’s about discounting.”

It seems as though direct to consumer brands are gaining ground – will this problem get bigger, especially at the higher-end?

Answered by Dominic Langan, MD

“Yes, it’s getting bigger, but how crucial is backup support to customers? Ongoing support and straightforward warranty is something to be played on – these experiences will simply be better with a local retailer. The bike shop wins over online pure plays because of its local and accessible human staff. It is a tough one, but it emphasises why it’s important that our brands offer more than just a low price point.

“At the high-end it becomes an emotional purchase, particularly when you consider custom building. That again plays to the favour of the IBD.”

There has been a delay on the arrival of some Ridgeback Bikes, when will they land with Sportline?

Answered by Patrick Barker, Stock control

“I’m assured the reworked bikes will be complete by the end of next week, so are not far off.”