Giant Group retailer mail rebuffs direct to consumer model

An email seen by CyclingIndustry.News and stemming from the Giant Group USA has strongly rebuffed the direct to consumer model, describing it as “a slap in the face” to retail partners.

The mail comes in light of close competitor Specialized this month beginning to roll out a handful of avenues to the consumer that will bypass the bike retailer, including delivery in a box and a ‘white glove’ service where a member of Specialized’s team will hand deliver and assemble the bike safely on site for the customer. In the UK home Delivery (bike in a box) is free, while Specialized Delivery, only available for bikes over £2,500, costs £75.

Giant, in the USA at least, currently seem to be very much against the idea, starting the mail with “we believe strongly that no one understands a local cycling community more so than your local independent bicycle retailer.” The firm has a legacy built very firmly on the independent bike shop network and has grown to become the world’s largest by value (but seemingly no longer by volume) bike maker.

The firm’s (UK redirect) website very prominently features a dealer locator for visitors from any location pointing to its branded stores initially, but also showing stockists by locality to a given postcode.

“The cycling space today has been built on the backs of quality retailers. And will be in the future,” continues the mail, adding “Yes, the machinery is exciting; however, the cycling experience and continuing service cannot be delivered in a box. The cycling energy will (in some cases) suffer a loss as a result of this D to C experience. On the other hand, this will create a huge opportunity for those businesses that focus on consumer care and nurturing. It is my/our firm belief that the cycling experience is all the better for competent independent retailers like you. Retailers lift a tremendous weight and have an extreme value in the chain when done well. That can’t be replaced for an enthusiast.”

The remainder of the mail to accounts is robust and critical of the direct to consumer experience, going as far to badge companies utilising it as having “never had your back to begin with.”

As it stands, Giant USA has a home delivery option under the Weblink (E-comm) banner, from which 100% of the bike margin is shared with the account closest to the consumer who will be tasked with after sales care if the dealer opts in.

Since the news broke of Specialized opening this new consumer direct channel it has been a significant talking point in the trade. CyclingIndustry.News’ brand new 2022 market report (purchase enquiry here) reveals that 37% of UK bike shops feel that, where margins have been squeezed throughout the supply chain, they are increasingly concerned by brands cutting stores in favour of B2C avenues, or withholding stock for their own use versus dealer supply.

Elsewhere talk has centred on to what degree others will follow in the face of pricing pressures that have made it more difficult for brands to remain competitive against those brands that have always favoured a direct to consumer model, such as Canyon and YT, to name just two. Pressures on each link in the supply chain include, but are not limited to, shipping cost increases, raw material costs, labour costs and in some cases relocation of production or assembly, plus a general imbalance of supply and demand putting a squeeze on global business.

Further discussion on the subject of the direct to consumer channel’s steady rise and the relationship with the dealer has been had on CI.N’s trade-only Facebook Group – Cycling Industry Chat – found here.