The story of Chain Reaction Cycles is one of the most remarkable in all of cycling. How did a small group of guys in Northern Ireland go from a tiny shop in a small town to the world's largest online cycling retailer today? Regardless of how you may feel about online retailers, and they certainly do polarize opinions among many people, the sheer magnitude of their ascension is jaw-dropping. What's more, at their core they are still very much the same group of people who were there some thirty years ago. One of that small group is Michael Cowan, who started as a shop assistant and today holds the title of their e-Commerce Director - no small responsibility for an online retailer. We caught up with Michael to find out more about the rise of this retail giant.






What are CRC's roots, where did CRC begin?

CRC began as a little local bike shop service, in the local town, in the local community. It's just a regular bike shop, as you'd expect to see, with a workshop and a small range of products. The owner, Chris Watson, who's managing director, he, being very ambitious, wanted to grow the business beyond the local community, and we started selling products mail order. This is all pre-online, the early 90s. I worked in the little shop. We were very involved in the local race scene, and organized some of Ireland's first downhill races. And we were just fanatical about mountain biking; we absorbed all the media we could get.

How could you make that first decision to go mail order, and make that first expansion from just being a typical bike shop?

I guess they were a very entrepreneurial family, and really just had good business acumen. They were looking to try and grow the business and it just made sense. Northern Ireland's a small place, and it just seemed like a really logical way to expand the business. We saw quite a few other businesses doing mail order back then, advertising in magazines with a big list of products, and doing everything over the phone, so we decided to have a go at that. We offered really good service, we were stocking good products at good prices and we gave good advice over the phone, because we knew our products. We were involved in the sport, and knew what our customers wanted . We were doing next-day delivery and free delivery right from the start. So way before we went online, we were doing what we're doing today.

When was the decision made to start selling online? How was that decision made, and how did you enter into that world?

It was very organic because we were primarily a mail order or a distant selling business.

So, as the mail order grew, the shop became a smaller and smaller component of the business?

A smaller proportion of the business, yeah. It turned from a little shop into a warehouse with a section of the warehouse cordoned off the shop, which turned into a bigger warehouse with more of a kind of trade counter. So we always served the local customers, but then the local business became a smaller part of the overall business, and we had a customer service team, we had a warehouse operation. A mini version of what we have today. But all the orders were coming in via the telephone, and then in 1999... '98, '99, we started working with some guys we knew from cycling. A friend of mine who was a real good cross-country racer was also a real good IT guy. He and his brother partnered with us to build our first website, and we launched in '99. And for us, at the time, it was just another sales channel. So instead of doing everything over the phone, we had orders coming in over the phone and online, and it wasn't a big bang, it was quite an organic process, but it just allowed us to grow faster.

Because of that quite small beginning you're now the world's largest online cycling retailer?

We believe we've got the biggest range, serve the most countries and most currencies. So there are a few other big players, but we're certainly up there.

What do you think it was that you did that enabled you to go from such a small beginning to where you are today?

Hard work is the first thing, and really, it sounds cliché, but focusing on the customer. We were talking to our customers. We didn't come out of the blue and decide to set up an e-commerce business. We were talking to our customers every day on the phone, so they were telling us what they wanted to buy. We understood that it was important for them to get it next day, for the weekend or for the next race or whatever. We were talking to them about products. So we were very, very close with that connection with our customers, and then we obviously very involved in the local mountain bike scene. We really were tuned into what people wanted. And then we were very focused on buying. So, we were brave. We went out and bought large volumes of stock. We really stretched ourselves as far as widening our range, so we had a lot of choice. Also, we were really transparent.

A lot of bike riders may not remember, but back in the early 2000s, most e-commerce businesses weren't transparent about stock online. Bike shops would go online, list everything that their suppliers could get, kind of suggest it was in stock and people ordered it. Then you got an e-mail the next day saying it was going to be two weeks while we order it in. From day one, when we went online in 1999, it was black and white. We told customers in stock or out of stock, crystal clear. We made a commitment, if you ordered it before a particular time, it would be dispatched that day. You'd get it next day. And we had a phone number to call us if you had any problems. And just those simple e-commerce principles that are just doing the right thing, doing what people want. We're still doing those things today, and we were doing them quite early, I suppose. As far as how e-commerce has turned out, delivery, service, price and range, those are the real key things.






You say the race scenes, like the local involvement, seems to be the key theme through all of this. And it's interesting, because one of the comments that comes up is, "Business like yourselves don't support the local scene." Maybe those people don't see how involved you guys are with the local scene here?

Yeah. So, we're cyclists, and that's been always the pulse of Chain Reaction. We're a bunch of cyclists, and in particular, mountain bikers, who love to race, love to get involved, and support that where we can. So we've sponsored a lot of local races. And I guess as we get into bigger markets, we really try and support what they're doing. For example, we're supporting an endurance series in Australia. We've supported a lot of UK racing over the years, sponsored the National Downhill Series. We've been sponsoring the Scottish Mountain Bike Championships. And we're doing various road events. So I guess as we develop, we really see the merits of helping to support local scenes. That being said, we are what we are. We do what we can. We focus on doing what customers want us to do, and serving their needs.

Obviously, the thing that obviously gets thrown at businesses like yourselves is that you're killing local bike shops. Yet, you just invested a lot of money in opening a local bike shop, can you explain that decision?

We're not trying to change how people want to shop, we're responding to how people want to shop. A lot of people want choice, range, and speed of service, and that's what we offer. Bike shops are for a different thing. Bikes are fairly complicated, fairly advanced. Some of our customers like to learn, and buy the tools, and do that work themselves. A lot of our customers want the expertise of local bike shops, mechanics. It's a decent-sized industry, and a growing industry and there is room for people who are good in lots of areas, and good local bike shops are thriving. It's a competitive world out there, and e-commerce has got a big part of retail now, and that's what customers want. But the local bike shop has a big part to play.

What kind of model have you taken with your local bike shop?

We see people's journey through cycling, through the retail store, and through e-commerce. For example, if you want something today, if you're there on a Friday afternoon and you want something now, and you need something fixed, or you want to walk out of the store with something under your arm, the shop's got a big role there. For somebody who's getting into the sport and needs the education, the help, the bike set-up, our brick and mortar store is really focused on that end through that whole area, and sometimes people want to touch and feel things. But if you know what you want, and you want that next day, and you don't have time to go drive, park, and everything else, then e-commerce comes into play.

What have been the big challenges for you guys? It must have been quite a rapid expansion going from a local business to a global business in that time frame?

Just scaling. Everything has its breaking point, so you push. You push your order throughput, you push the amount of telephones or e-mails you can cope with, the amount of traffic your website can deal with. All those things have breaking points. So, as you get to a certain size, you've got to make a big leap forward to be able to cope with the volume. And you're looking at a lot of problem-solving, a lot of IT solutions, and a lot of good people. People are your biggest asset. So, good people solving problems, and always focusing on what the customer wants. As we've grown bigger, with loads more stock, more space, more orders, more volume, more phone calls. Products get more and more technical, so you've got to make sure your staff are really well clued-up. Just the growth itself is a problem, and I suppose a good problem to be solving.






How do you see the market evolving in the next ten years? What's the next evolution in the way you'll buy bikes?

It's interesting. We're seeing a lot of direct to consumer brands. If you had mentioned bikes as a whole, a lot of direct to consumer brands are coming to the fore. And it's very competitive. A lot of brands competing for market share. The winners are likely to be the consumer, because that's all going to create competition. Technology gets better, products gets better, competition keeps prices in check, because ultimately the customers have the power. I say the cream always rides to the top. So good shops will do well. Good e-commerce businesses will do well. Good brands will do well. They're all going to be competing for the customer, and I suppose that's cycling's development. You know, cycling's exploded in a few markets around the world, but there's still a lot more to come. There's still a lot of underdeveloped markets. The cycling world will continue to become a bigger place for us all to play in.

Looking through the Irish racers on the world scene, it seems to be that you supported pretty much all of them, at some point or other?

We certainly couldn't claim any credit for any achievement of what Irish riders have done. Here in Northern Ireland we get a lot less support. There are no chairlifts, no big mountain ranges, but there have been some really good riders coming out of Ireland through a lot of hard work, and we've certainly helped some of them. And we've helped support the local scene that's given them a little bit of a platform to go on from. But the guys who have done well, be it Greg Callaghan or Ben Reid have done it on their own. You've got young Jacob Dickson now doing fantastically well. We've helped some of those guys along the way, and hopefully they benefited a little bit from CRC being on their doorstep. But for an athlete to get somewhere, the only person that deserves the credit is themselves, because it's hard work to make it.

I think people, maybe, within mountain biking, they see Chain Reaction as something of a giant and obviously it's a successful business, but it's not actually a huge business in the grand scheme of things.

I guess, from a local perspective, we're a reasonable-sized business in Northern Ireland. We have hundreds of staff, we've got a lot of stock. We offer a big range. So we're of a reasonable size. But we ain't Amazon, we're not colossal. We're a decent-sized business.






What do you see as the next big changes coming in mountain biking in the coming years? How do you think the sport's going to develop and progress?

I guess we've just been through quite a period of change, or we're in the middle of a period of change, where mountain biking's getting labeled in a few ways. So we've got the type of cycling that a lot of us have been doing already, as in enduro, turning into a discipline with a specific format around it. I think that's good. I think it's given kind of a middle ground of high performance riding a legitimate label, brand, identity, whatever you want to call it. And I think that probably leads to quite a bit of development, where it puts performance into that all day riding category, where I before I think it was XC, downhill, and then it was the compromise in the middle. Now, the compromise is a discipline in itself, and that's driving things to bring the best of the two extremes, of downhill and XC, into one place. So bikes are improving. If you'd asked the question three years ago, you maybe wouldn't have predicted these size changes and so on, but you would have still said bikes are going to get faster. We're still going to be working towards handling like a downhill bike, at the weight of an XC bike. And for a long time, brands have been trying to meet that challenge in some way. So, yeah, products are getting better.

They may be getting so good that it's becoming a little bit difficult for brands to differentiate because a lot of brands are arriving at a quite similar conclusion. So customers are getting a lot of choice now. A few years ago, you had to buy a custom bike, not one off the shelf. Build it all up yourself, and spec it, to get what you really needed as a mountain biker. But now, off the shelf, bikes from the big brands, are meeting the customer needs better. What's going to happen in the next few years? Lighter, faster, stronger. And people will be getting the right top tube length and the right head angle and the right BB height, and those arguments will probably spiral around one conclusion, then spill out in the new niches, and spiral down again in the various bikes for various types of riders, or various types of terrain.

As a retailer, how did CRC make the decision to do its own in-house brands? How did you reach that point?

I suppose I'm almost proud to say that it didn't come from a big plan. It came from the fact that we're a bunch of cyclists, and we fancied having a go at making some of our own stuff. We were lucky to get the opportunity to buy the Nukeproof brand name, quite a few years back, but it sat dormant until we got a bit of time to go and get some handlebars made, some ti springs made. We figured let's have a go again into that area, and it started as little pet projects.

Like I remember sitting with some of the Nukeproof team at the Interbike show in Vegas, with Nigel Page and Brant Richards, who was working with us at the time, myself and a few others. We said we were running Intense for our factory team with Chris Kovarik and a few other guys. We just said, "Could we do a frame?" And it just started as a, "Let's do a downhill frame." It turned into drawings, "Can we do it?" Just challenging ourselves. The brand grew quite organically, and we built up a real good team of people that knew their products. Good engineers. Good product designers. And we were able to grow the brand and make some real credible products. So, quite organic, but the seed was us just being excited about product, and just being genuinely interested in what we could do. "Can we make something that's as good, or better, or different than what's out there?"

For yourself, what's your riding background?

I did my first downhill race as, probably, a 15-year-old. I've ridden cyclocross, cross-country, I've done some triathlons, I've done quite a lot of enduro, but downhill's always been my first sport. When I started racing, there were no downhill races in Northern Ireland. We went and worked with some clubs, and we organized some of the first races we had here. Back then, there was a lot of cross-country, and downhill racing was starting to get a bit bigger, certainly in the UK, so we saw what was happening there, and tried to apply it locally. I've raced at reasonable levels. I've entered a few World Cups, not made it through to finals. I've been Irish Champion in Masters. I got a silver medal in the European Masters Downhill Champs. I'm racing a round of the EWS this year. I continue to compete in my age group locally. I've always been a racer, and enjoyed pushing myself and seeing where I can get to. And CRC creates a collection of friends, rivals, and we're all doing the same thing.

When you talk to the people involved in business, riding seems to be a common theme here. It seems to be one of your main recruitment tools?

Yeah, it's a big start. It's a small scene, and I guess we provide a great opportunity. Ireland's a small enough country, so if you're into cycling, and you've got Chain Reaction on your doorstep, we offer roles. We've got really competent cyclists working in IT, working in operations, working in customer service. I guess for people who are into cycling, we give them an opportunity to mix their hobby and their profession together. So we get a real good melting pot of talent.

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