People take notice when one of the world's largest bike companies announces that they'll be initiating an online ordering system that, at least at first glance, seems to remove much of the important interaction between the consumer and their local shop. We tend to be a defensive bunch when the topic of online sales comes up, especially when it involves your local shop and a company like Trek, which can lead to emotions possibly clouding our early judgement.
With that in mind, and now that the fire from Trek's August announcement has died down, we reached out to both Trek and one of their largest competitors, Giant, in order to better understand the "click-and-collect" buying option.
The Click-And-Collect ProcessThere are upsides and downsides to click-and-collect sales when it comes to both the consumer and your local bike shop, but before we get to those we should understand how Trek's online ordering system works.
Let's pretend that you want to purchase a new Fuel EX 5 29, and like most of us who are always thinking about a new ride, you go to the company's website to do your homework. On the EX 5 29's homepage you'll see that it actually tells you if that very bike, in the size and colour you want, is already at your local shop, which would give you the option of either going down to pick it up or at least seeing it in person. You'll also spot two buttons on that same page: one will say "Find a retailer," and the other will read "Buy now." The latter is pretty self explanatory, and because you've earned it and you can't keep that finger from doing what it wants to do, you click it and order up your new bike by entering your credit card information.
Your new machine will ship from a warehouse in Wisconsin to any authorized Trek dealer in the United States, and you'll have to choose which shop you'll be picking your new baby up from. That LBS also has the option of delivering the bike to you (possibly for a fee that would go directly to the shop
), which would save you a trip but still ensure that the bike is built up correctly and nothing is about to fall off. Trek will not ship the bike directly to you - it must first go to your local shop to be put together by the pros - but they will ship accessories purchased at Trek online to your house if you want them to. Theoretically, if the LBS that you shipped the bike to offers a delivery service, you might not ever have to step foot into a bike shop in order to get your new Fuel EX.
That might sound like a poor imitation of a bike sale for those who've spent a lot of time in a shop, either as a customer or as an employee, and it needs to be mentioned that the apparently streamlined online sales system doesn't quite pay out to the shop in the same way that a traditional sale would: the LBS receives 80% of the margin that they would have made had the bike been sold in person and for the same MSRP. To be fair, there's a good chance that an old fashioned, non-virtual sale would have seen the bike go for a bit less than the advertised MSRP, so simply saying that the shop will end up making less on all of the bikes sold online versus those sold under their roof is probably as accurate as your Strava times.
A healthy margin is key for a shop of any size to be able to keep the doors open, so the smaller numbers attached to an online sale could easily be viewed as a very, very bad thing. But it isn't quite that simple...
The Upsides to Click-And-CollectThere are some real upsides to the click-and-collect system for both consumers and the local bike shops who will be assembling and delivering the bikes, despite the initial uproar about Trek's plans. I reached out to Eric Bjorling, Trek's Brand Communications Manager, to hear some of those pluses, as well as to get his take on a few minuses.
While a lot of us feel more comfortable in our local shop than we do in our own homes, and we might have no issue getting our questions answered or finding what we need right away, many others feel intimidated by what can look like an exclusive club from the outside. Remember the first time you walked into a new class late? It felt like you weren't wearing any pants and everyone was watching you, didn't it? While the large majority of us savor that face-to-face time with the sales or wrenching staff at the shop, some others could be pretty nervous about the very same thing. Now, with Trek's click-and-collect system, someone who would love to start mountain biking but is put off by the thought of walking into the boy's club that is your local shop can pick out a new bike and do most of the leg work without feeling like they don't have pants on.
No bike shop wants to make you feel like you forgot to get dressed before walking out the door, and a good, professional shop also won't try to pressure anyone into a sale, but the truth is that not every salesperson has the tact to know the difference between gently pushing you towards the correct bike and just wanting to move another bike out the door. This is where the consumer could benefit most from the click-and-collect approach: a no-pressure, virtual sales floor that's actually their living room. Sure, the bike isn't right there in front of them, and there's obviously no proper substitution for a real test ride, but there's also no shop rat with bleached tips and an earring asking you over and over again if they should ring the bike up.
|In order to protect all of our retailers, we will be standardizing pricing. You will not find Trek or Bontrager products on third party sites. We are not interested in being the discount shop. - Eric Bjorling, Brand Communications Manager, Trek|
How does a customer ensure they're getting on the correct size of bike, though? ''We're offering a number of ways, including online chat and the language 'If you are unsure as to the size bike you need, please visit your local Trek retailer,''' Bjorling explained. ''We will be working on more ways to ensure proper size choice in the future, but the best way to determine size if you're unsure has always been and will continue to be visiting a shop.'' Trek does also offer a return policy in a worst case scenario - the bike must be in new condition, Trek will credit the customer's credit card and the shop will be billed for the bike at their retailer level - but Bjorling also believes that the number of return bikes will be very minimal: ''We believe returns will equate to a very small number and average out to a bike or less per shop per year. To the doomsday theorists on this, I will say that Trek has built a company on 40 years of working with, and taking care of, our customers. We will continue to do so.''
Those returns won't likely come from the high-end market, either, says Bjorling, as riders who are spending big coin are far more likely to want that face-to-face interaction and the relationship with the shop that comes from it. ''Bikes of a certain price and sophistication are going to continue to be mostly sold through brick-and-mortar because the consumer is making an investment and wants to ensure they have what they want,'' which is probably true. Bjorling says that it's a different story on the other end of the consumer spectrum, though: ''Bikes at more entry level prices or new customers who may be more apt to shopping online are going to be interested in models that are more likely to have higher inventory levels at retailers making it easier for the shop to be able to sell that bike.''
There are upsides for the local shop as well, some of which are arguably even more advantageous when you consider how much of a battle it can be for a small business to keep their head above water. One of the most notable is how your LBS won't have to stock as many bikes in what is probably an already cramped storage area and, even more important, that their booking order (an order where a shop commits to the bikes they'll need for the coming year
) won't have to be as large. That means they'll owe less money when the terms come due, and they won't have to gamble as much on the upcoming twelve months. That last point is a massive plus when you consider that a rainy and cold spring can cost a shop a huge amount of money in sales due to less people coming through their doors, especially if they were expecting a profitable season.
|Let me tell you a few things that I know for sure: the bicycle is a technical piece of equipment. The bicycle comes in various sizes. The bicycle needs to be serviced. None of those can be done most effectively online. All of those are better off in person - it's a better experience at a bicycle retailer. If we're talking about books, if we're talking about an iPad, I get it, but if we're talking about making sure that you're buying the right bike that's the right size and you're forming a relationship with somebody who's going to take care of it for you, I'd want to buy that bike at an awesome bicycle retailer. And there's a lot of them out there. - John Burke, Trek CEO, talking to Pinkbike in 2013|
Trek worked with some of their shops in order to suss out any issues with the click-and-collect system, running a pilot program with more than thirty of their retailers over the last two years to fine tune the setup and to learn from the shops about anything they might have missed. ''Their feedback was integral in designing the program and process,'' Bjorling explained of the multi-year trial program. He also made it clear that shops aren't required to be part of the system, should they not have internet access or simply choose to not be a part of it. ''There is no qualification process. If you wish to opt out, you may do so but you will sacrifice the opportunity to earn service commissions on online sales and your store will not appear on the locator page when a customer goes to complete their transaction.''
It's also important to remember that, for all the uproar that Trek's August announcement caused, one of their major competitors has already had success with the click-and-collect approach. Giant has employed such a system for over two years now, albeit not in North America, and An Le, Giant's Global Marketing Director, says that things have been going well. ''It’s been pretty smooth so far, in both the business model / process aspect as well as the IT infrastructure side of things,'' Le said of Giant UK's use of the still novel online sales system. ''Having said that, this is still a new way of doing business and we are constantly learning how to improve it daily. But because we started this process a few years ago, we have a good start on this click-and-collect approach.''
Regardless of success in the UK marketplace, Giant hasn't yet implemented click-and-collect sales in the United States, with Le citing significant differences between e-commerce in different parts of the world. ''Among those differences are the size of the country and the sizeable number of Giant retailers in the USA,'' Le explained. ''The success of such a strategy is in the details and high level of execution. If we embrace this opportunity, it will be done at a super high level, supporting our investment in our brick and mortar retail partners.'' Again, both Trek and Giant are stressing that connection to local bike shops.
And The Downsides...There seems to be a lot of upsides to the click-and-collect approach, but there's one big downside to note, at least for the consumer: the pricing of all bikes will be set in stone, meaning that the MSRP is what will be charged to your credit card if you order your new Trek off of their website.
Sure, this means shops won't get roped into a game of price-matching, but one of the big reasons that most people order things from online sources is the lower cost compared to buying the same item in person, often being able to save big coin by turning to websites like Chain Reaction Cycles for their needs. This is a touchy subject and not one that I'm trying to pass judgement on, but it's hard to argue against this approach if you're on a tight budget and need some parts in order to keep your bike going, or if you just want to save money. But those who purchase a new Trek online won't be saving any money - they'll be paying the MSRP for the bike. ''In order to protect all of our retailers, we will be standardizing pricing. You will not find Trek or Bontrager products on third party sites. We are not interested in being the discount shop,'' came the reply when I questioned Bjorling on the subject.
That means they'll be no haggling over the price of the bike, which can certainly be seen as good news for the shop, but also that the customer won't be able to say, 'How about that price including the tax?' or something similar - you'll be locked into paying the sticker price. That said, it's the shop's prerogative when it comes to offering discounts on anything else sold with the bike, say a helmet or riding clothes that might be needed, and a shop likely wouldn't move too much on the price of a current model year bike regardless.
|The way consumers buy bikes and gear is rapidly advancing and we want our retailers to win as the environment changes here in the USA. - An Le, Global Marketing Director, Giant|
The FutureIs the click-and-collect system just a stopgap until computers rule the world of bike sales? I hope not, and I seriously doubt that will ever happen.
A pessimist (or, depending on your outlook, an optimist
) might see Trek's click-and-collect incorporation as a half-step towards true mail order sales, but Bjorling is pretty adamant that won't be the case. ''We believe the best way we can guarantee a great experience with our brand and our product is through our retailers,'' was the response when asked if Trek might consider taking the same route that brands like Canyon and YT have in the European marketplace. ''There is no doubt that there are some very strong online-only brands making some serious inroads into a number of markets. We believe the future of successful retail will be omni-channel and that retailers that provide great service and a number of interaction points are going to be very successful. For now, we're focusing on rolling this out in the US and will continue to evaluate future opportunities for Trek and our retailers.'' Giant's An Le echos Bjorling's sentiments, saying, ''Our decision will be based on whether this model can enhance the strength of our retailer’s business in an evolving marketplace, as well as better serve consumers with access to world-leading products." In other words, despite the doomsday scenarios that some commenters threw out there, I'd wager that neither company will be going the consumer direct approach that Canyon or YT uses.
The ability to track down the exact bike you want while sitting on your couch, find out if it's available and then have it shipped to the closest shop to be assembled by professionals (who get paid for the bike and their time, don't forget
) is a good thing, but let's also not forget this important fact: Trek and Giant's main reason for attempting to sell bikes at full pop on the internet is to reach those customers who would not set foot into a retail shop, a tactic that lets them capture a slice of the ever growing number of monied customers who are becoming online shoppers.
The internet (including social media and smart phones
) have created an arm's-length community, and there's a degree of freedom in that. People use those channels to avoid face-to-face interaction while doing business that might not happen otherwise, and while that might sound like a sort of virtual shopping mall from a dystopian future to a lot of us, it will be just one of the avenues available for customers from here on in.