Internet vs. bike shops: heating up

pricecompetitionInternet competition is a major problem for 70% of bike dealers today. So says a national survey of bike shops conducted in January 2013.

The number is from the NBDA annual retail survey, based on 287 completed and qualified questionnaires from a random sample of 1,996 bike stores.

Other survey highlights issues for dealers:

  • Supplier relations seem to be pretty good with this group, with 68% saying there is no problem with suppliers, and 25% saying there is a minor problem and only 6% ready to rumble with a major problem.
  • Half of the dealers say they have no problem with the fairness of the dealer agreements they have with vendors, while 37% say it’s a minor¬†problem and 12% citing a major problem.
  • Competition from mass merchants is a major problem for 38% of the stores, though the majority, 48%, relegate mass merchants to minor problem status.
  • The dealers seem to be pretty happy with the riding opportunities in their areas overall. 42% say places to ride is no problem for them, with 38% saying it’s a minor problem and 19% a major problem.
  • The rising cost of insurance concerns 80% of the dealers.
  • Advocacy is very important to 27%, somewhat important to 48%, and not important to the rest.

4 thoughts on “Internet vs. bike shops: heating up

  1. Unfortunately, I would have to remark that the first three of the “other survey highlights” above reflects how unaware most LBS owners are of the fundamentals of a durable goods market economy. We are frogs in a boiling pot.

  2. I agree with Jeff.

    If manufacturers/brands don’t control their distribution better, soon they will all be ‘internet junk brands’. There won’t be any IBDs left to market their products to customers, nor to install them.

    Why is it that I can buy a Shimano Dura Ace group from a website in England for less than my wholesale cost here in the US? Shimano has left “us” with only selling low-end replacement parts for repairs. It’s no wonder I’m not a Shimano shop. At least SRAM provides no warranty for non-domestically procured parts.

  3. You can turn the tables on ecommerce.

    We used to worry about the big box stores but that’s quieted down some. Now it’s the internet that’s going to steal your business. Just like it was true of the big box stores, it’s true again – independent bicycle dealers will lose customers to the internet. If you want to take your business back from your online competition and ecommerce engines like The Clymb, you have to fight back with more than anger and a wag of your finger(s).

    You have to start winning your customers back. There are still scores of good people to chase – new customers and former customers that you really do want to connect with.

    They’re all dabbling online, before they come to see you, after they visit, in between visits. Of course they are. Sometimes they’re looking up something you sold them. They might be looking up an item they purchased in your store, to make sure it is what you say it is and to reassure themselves about some unforeseen guilt concerning a $120 pair of lycra bib shorts that look and feel ridiculous in any other context. Maybe they’re looking for a basic jersey in a certain color that you don’t have in stock.

    I’ve heard a lot of rumbling on the industry forums about the Clymb. The Clymb offers its subscribers internet la-la-land (closeout) pricing on stuff. They’ve made a dent in our industry; some of the rumbling is warranted. How did they do it?

    They provide an email service that reminds people about products they want, and they offer deals.

    You have no excuse if you’re not providing a superior email service than The Clymb. Marketing, at its best, is a service. Your goal online is only kinda, sorta driving customers to your digital shopping cart. Your real goal is to get people into your store. That goal is based on the age-old sage wisdom that the more often customers visit your store and the more time they spend with you and your people, the more they ride and the more they eventually buy. Yet so few stores email their customers, even their regulars. The Clymb does it, and they don’t know anything about your local cycling scene, the new trailway, the best local rides or anything else about your community. They just keep sending out deals.

    If you don’t offer much in the way of service online, if you’re not engaging your local market this way, you cannot expect that business. You can beat them at the their own game.

    If you do nothing else this year in the way of marketing, start collecting emails and putting them to use about once per month. One letter to your customers per month – that’s it. It might be the best thing you do all year to protect your business against online competition. Quick tip: Get it automated or it will never happen consistently. If you’re already doing this with email, it’s time to start kicking the Giant in the knee.

    The best way to win against a Giant is to cut it off at the knee. That means getting the local search engine traffic before your online competition does. You’re might be asking yourself, how?

    Here’s how: There are two types of traffic. Paid traffic, which is the result of advertising like Google Adwords, meaning highly-targeted and equally-trackable online advertising. And SEO, or search engine optimization, which is a little less reliable though it can be equally valuable to your business. Believe it or not, Google favors you, the independent local business owner.

    A lot of people will continue to rumble that the big internet companies are stealing your business but they’re not. They’re buying your business fair and square. They’re beating you to your own customers, and you had a 5 or 10 or 50 year head start. Don’t they have big budgets? Maybe. You can still beat them. It doesn’t cost a lot and it feels really good when you do it right. You might even grow to like the internet as a marketing tool.

    If you’re interested, check out – internet marketing for the IBD by the IBD

    1. At the intro I thought Aron’s reply looked interesting – an appeal to the LBS to be better. Further in, I thought that focusing on email marketing was debatable – email is beginning to be what was door-knocking was by the 1990s (frowned upon). As I kept reading I started to get the feeling I was receiving a marketing pitch. The last paragraph sealed that sentiment.

      But hey, this is a blog site. Everything goes.

      For the serious reader, yes, there are a lot of significant ways that the average LBS needs to improve. Asking everyone for their email address, as part of a larger marketing plan that is a lot more comprehensive than the “old-fashioned” way of communicating online, is among them.

      But it is an extremely narrow minded (and insulting to most people) notion that thinks customers just point their mouse and click at the first thing they see at any price. Online, you can spend a lot of money doing SEO, but if you aren’t an internet retailer that runs a low-rent sweat shop or sits in pajamas behind a computer while getting suppliers to drop ship for you, then you can’t offer the pricing that is what *really* makes the internet sale.

      What’s in a price? The cost of labor. Always has been and always will be. eTailers sell it for less because they do less for the consumer — A LOT less. Brick-and-mortar needs to charge more, and as a consumer you will get a lot more service and help. Or you should.

      So if a post is going to be about being a better LBS, it should start with making sure that the high level of service is there that commands paying for the extra labor. I don’t think the LBS is getting paid for being prolific at email (though, done well, that certainly doesn’t hurt.)

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