CIN issue 001 2018

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ISSUE 001 // 2018

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from the editor

Mark Sutton @CyclingIndustry @MarkSuttonBike

DID SOMEONE SAY PIE? WHEN CyclingIndustry.News set out in print one year ago, the ‘plan’ was to keep it loose and stay reactive. Having too detailed a plan in this industry, in this age, seems overrated, such is the pace of change.

That’s not to say there hasn’t been some structure. There have been constants; the writers we have selected are all seasoned experts in their chosen field, or trade veterans - bike industry and otherwise. We’ve heavily bolstered the contributor pool for 2018, bringing in a network of researchers, consultants and writers spanning from Australia to the west coast of America. There’s always scope to learn and take inspiration. Often you’ll draw it from sources considered unlikely or unfamiliar. Indeed, of all the best practice retail profiles that follow, the one that’s given me reason to slap my forehead at the sheer simplicity of the logic came this month from Cycle Republic. Sometimes the answers are right in front of your eyes, yet, as is human nature, we can be too busy pondering what’s beyond the horizon, watching or blindly dismissing what everyone else is doing.

The moral of the story? For me, it has to be to focus on what you do well, do more of it and get better at turning it into profit. If trade feedback is anything to go by, CI.N does print well, so I’m thrilled to announce here that this will be the first of six Journals this year compared to last year’s four.

The bike industry has taken on a perhaps unfamiliar new shape of late and that’s undoubtedly because the minds (and recruitment decisions) of the industry’s bigger firms are now looking well beyond our bubble. Looking from the outside in, those recruited have in many cases begun to reshape businesses run on passion, turning them into profitdriven machines. The passion to business acumen ratio has always been a little out of whack in the cycling trade. As unpopular as this opinion may be, that’s perhaps why we’re witnessing the market share shifts that have been evident in the past five years.

In the 24 hours after breaking the news that SportsDirect now has a new stake in the bike business and reporting on Wiggle’s German enhancement, I ran a poll on Twitter (proper research, I know) asking whether the result would be more discounting online, or a stabilising of prices with reduced competition in the market. The result was a 31% to 69% split, respectively.

Has much changed in the past 12 months, then? Yes and no. If you too have a keen eye trained on efficiency and adding weight to profitable elements of your business, then there’s little more reason to be concerned. Smart businesses will have recognised too that profitability on the current pie is one thing, but that, for most, the pie is shrinking. Therefore, it’s crucial you’re not working hard to stand still.

Keen to do our bit, we’ve recruited award-winning cycling for transport researcher Rachel Aldred, among others, to load our pages with advocacy ammo. Before the sport side of the business can grow again we must build cycling into the lives of those who do not yet cycle.

Our kids’ trips to school, sticking grandmothers on electric bikes; it’s time to serve the demographics too long overlooked. The single greatest chance the bike business has to reverse its decline is to persuade governments and authorities to budget and build for cycling.

Let’s work toward having our pie and eating it too.

mark@cyclingindustry.news www.cyclingindustry.news

ISSUE 001 // 2018

Publisher

Jerry Ramsdale jerry@cyclingindustry.news Editor

Mark Sutton mark@cyclingindustry.news Sales Executive

Logan van der Poel-Treacy logan@cyclingindustry.news Head of Production

Luke Wikner luke@cyclingindustry.news Published by

Stag Publications Ltd 18 Alban Park, Hatfield Road St.Albans AL4 0JJ t +44 (0)1727 739160 e info@cyclingindustry.news w cyclingindustry.news ©2018 Stag Publications. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior permission of the publisher. The Publisher cannot be held responsible or in any way liable for errors or omissions during input or printing of any material supplied or contained herein. The Publisher also cannot be held liable for any claims made by advertisers or in contributions from individuals or companies submitted for inclusion within this publication. The opinions expressed are not necessarily those of the Editor or of Stag Publications Ltd.

CyclingIndustry.News is a proud member of the Bicycle Association of Great Britain.

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the professionals CREATING CREAT A ING NEW CUSTOMERS! AT It is a widely held view that the bike industry’s ever-increasing number of brands are fighting for a shrinking slice of pie. With that in mind, isn’t it about time we started creating new customers?

CyclingIndustry.News asks a panel of retailers what efforts they’re making to create newbie business…

Ruth Hargreaves JD Tandems

Ben Jaconelli Owner at Fully Charged

1. Does the bicycle business need to shrink in size in brand terms, or grow the pie in customer numbers?

Ruth Hargreaves, JD Tandems As tandem only retailers, we are trading in a sector of the market that has shrunk in size in the respect that we have fewer brands now than say 10 years ago. Presumably this shrinkage has come about because the brands in question were finding our sector unprofitable. This shrinkage has not helped to grow the market, neither has it made selling tandems more profitable.

I have to question the implication in the question that the problems in our industry are caused by either an oversupply or a lack of customers though, but, in my opinion, rather that many of the big retailers are operating at a loss, and not only are they operating at a loss, but many have increased their turnover to boot, so they are taking a greater

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Jonathan Cole Director at Velorution

market share and still losing money.

This makes the customer think that the IBD is over charging. Most consumers accept that shops might have higher overheads, but they do not realise that these dominant players in our industry are actually losing money and are therefore not selling their products at a high enough price.

Peter Kimberly, MD at Cycle Republic I tend to disagree, from a Cycle Republic point of view, that the pie is shrinking still. Our city locations and emphasis on getting commuters moving has shown us the scope for customer creation.

Recently I took a 38 year-old out for a test ride and he hadn’t been active on a bicycle for 20 years. Once you get bums back on saddles it’s quite simple to convey the benefits of ditching other forms of transport leveraging the reasons the customer offers for giving cycling another go. Cities are getting

Peter Kimberly MD at Cycle Republic

Mick Murphy Mickey Cranks

more congested, pollution is choking us, obesity is rife; it’s not a hard sell, particularly if you’re shelling out heavily for an Oyster card, or similar.

Jonathan Cole, Director at Velorution I think there’s an element of the bike industry having unreal expectations in many cases. Certainly brands need to get real on the costs of selling a bike.

What industry doesn’t account for the product arriving not built? There’s a cost attached for a professional to finish the build, plus the cost of shipping the bikes around. This can often be as much as 5% of the bike’s value, so the margin needs to be reflected as such.

The number of manufacturers serving the current customer base will be sorted by the market in time. An awful and a good product can very often cost the same thing at retail, but customers will soon learn where to go. The key is to have the knack to be on the right side when stocking up, it’s not always easy.

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Mick Murphy, Mickey Cranks The large amount of brands in the market currently is confusing for customers, but good for IBDs as it gives us the choice to work with those that genuinely support us. I hear a lot from distributors that they want to support IBDs and then their business model proves quite the opposite. As a cyclist I have never seen so many people out and about riding bikes as a result of the 2014/15 boom in road cycling, and once the uncertainty surrounding the economy is over we will all benefit from the increased customer base that is out there.

bikes wheeled in with punctures, we’ll fix hire bikes for free, charging just the cost of the tube. For me the industry needs to simply focus on keeping people on saddles and doing its bit to drive fresh uptake by looking at the bigger picture.

The bottom line is, pay attention to your customer and keep them equipped to cycle. In our university towns we offer a starter package for students, as part of a seminar series and we offer educational facilities.

Within, we’ll offer a pump, tools, all the basics to keep customers rolling despite the setbacks.

2. How would you suggest the collective industry should approach enticing non-cyclists to sling a leg over?

Ben Jaconelli, Owner at Fully Charged For electric bikes, I think the key is awareness. Research we have seen suggests as much as 70% of Londoners have no idea what electric bikes can offer. Only 1% actually use them.

As a small independent, we are budget limited in raising this awareness, but are shouting from the rooftops all the same. Our Fully Charged Barge, set for rollout in 2018, we hope will generate between 50 to 100 test rides per day. Generally, once people have ridden an e-Bike, they become a walking PR machine.

Ruth Hargreaves, JD Tandems In our particular area we have almost no traffic free cycle routes. This is a big barrier to new cyclists and families. Yorkshire is also very hilly, but this is becoming less of an obstacle to new cyclists with the increase in the popularity of electric assist cycles.

Jonathan Cole, Director at Velorution There’s no such thing as a non-cyclist, just lapsed riders, very often through their early adulthood.

Peter Kimberly, MD at Cycle Republic It’s widely known that most people’s objection to cycling more is primarily a safety concern. We overcome that by

Ruth Hargreaves, JD Tandems As an industry we need to make cycling safer. We need more traffic free cycle routes and we need the law changing to make motorists more responsible for their actions.

Peter Kimberly, MD at Cycle Republic We actively look to engage local authorities and indeed have been approached to deliver advice in certain scenarios.

I’m a big supporter of hire bikes, which I feel for many are the starter bikes. I don’t see the segment as a threat in the slightest and like other

The trick is to make cycling seen as accessible as possible and that’s something bike retailers haven’t always achieved by prioritising drop bars and lycra over everyday cycling in store. Our mission in entering Selfridges all those years ago was to bring normalised cycling to the mainstream.

Mick Murphy, Mickey Cranks Direct consumers in store with marketing so that we can allay fears about exposure, the biggest barrier to cycling is the fear of not being safe on the roads. Brands should partner with local authorities in developing more bike parks, protected cycle ways and off road circuits.

3. What obstacles exist in your area for would be cyclists who are yet to commit to cycling?

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the professionals CREATING NEW CUSTOMERS! offering customers a ‘first ride’ service with staff members. It’s by appointment, of course, but a bicycle is going one of two places once bought; the road or the shed. That first ride has to be a confident one and so we invest in taking customers out for that first journey, within reason, sharing with them the very best route they can take between their home and their workplace. That, we think, creates a greater scope for a longterm cyclist and thus customer.

the primary cause of accidents with pedestrians. That has done cycling’s public image no favours and very often flagging these isolated incidents with such gusto is a ridiculous misrepresentation. I’d love to see some positive campaigning from the bike trade to convey the benefits of cycling to work, including introductory pieces that highlight some of the lovely routes we do have in London for cycling. That could give readers food for thought.

Ben Jaconelli, Owner at Fully Charged There are three obstacles with our customer base; that’s theft, safety concerns and cash availability.

In my opinion, an electric bike is a safer commuter vehicle for the new cyclist. You’re less prone to taking risks as you can keep pace and therefore more likely to be relaxed while riding.

When it comes to affordability all that’s required is a swift comparison to the tube or an Uber across the city.

Finally, theft is something that the manufacturers are getting to grips with.

There will be more built-in trackers in the future. We, as a specialist, go to great lengths to educate each customer on the proper locking technique. Security products are a key add-on sale for us given the typical bike pricepoint.

Mick Murphy, Mickey Cranks Mickey Cranks is very lucky to be in the heart of the Cotswolds, which is a perfect location for leisure cycling and commuting into Oxford or Swindon.

Our biggest obstacle is awareness of what is on people’s doorsteps.

Jonathan Cole, Director at Velorution The media has become disproportionately focused on scaremongering with the rare cases that cyclists are

4. What segment do you believe has the greatest potential when it comes to creating new customers for the industry?

Ruth Hargreaves, JD Tandems Getting children on bikes has to be a focus, and that means creating more safe routes to school.

I question whether commuter cycling has the potential some think it has. Commuters in busy cities tend to ride inexpensive bikes, that are kept running on the minimum spend possible. Urban premises in cities will have high over heads. Is there really sufficient profit to be made in our industry to sustain such high running costs?

Peter Kimberly, MD at Cycle Republic Without any doubt, it’s women’s cycling, transport riding and electric bikes. We take a view that we’ve an unprecedented opportunity here to get people off buses and tubes in favour of a much more efficient transport mode. With e-Bikes we’ve an opportunity to enable customers to travel further than ever before and eMTB riders to pack in even more fun at trail centres during a day out. You can travel three times further on an eBike and get the same workout.

Jonathan Cole, Director at Velorution In terms of new customer creation I believe it has to be folding bikes and electric bikes. Electric folding bikes too.

Folding bikes are really the only option for those in the apartments of Highgate and Dulwich who otherwise may not cycle at all. I’m also a huge fan of step-thru builds and feel that bikes built for comfort are yet to achieve their full potential as they have in Europe. London is ten years behind here and indeed a decade ago I might have taken the car. Like many of our customers, I’m neither sporty nor energetic, but love cycling in comfort. There’s a lot of untapped potential for others like me.

Mick Murphy, Mickey Cranks More and more people are putting money into experiences and leisure tourism could be huge, particularly the e-Bike sector as it removes a large amounts of barriers.

Want to take part in our next Professionals Panel...?

Contact mark@cyclingindustry.news to register your thoughts.

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21st-23rd Jan - corebike.co.uk

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(( MARKET RESEARCH RACHEL ALDRED ))

THE IMPORTANCE OF THE RIGHT IMAGE What has the cycle trade really got to do to grow the pie? Portraying cycling as an accessible activity for all could be an important start, writes transport researcher Rachel Aldred, who is keen to see more from the cycling industry aimed at under-served demographics…

I

n the UK we don’t cycle much by European standards – around 1-2% of all trips, and around 3% of commutes. The market’s much smaller than it could be.

It’s also demographically skewed. Looking at people doing any cycling in a month (via the English Active People Survey) women are half as likely to cycle as men, adults aged 60+ are half as likely to cycle as younger people, non-white people are half as likely to cycle as white people, and disabled people are half as likely to cycle as non-disabled people.

These inequalities are often taken for granted by planners. The ‘cyclist’ in consultation and promotional documents is rarely an older woman riding with her grandkids, rarely a disabled person using a handcycle. Research I’ve carried out with charity Wheels for Wellbeing found most London borough transport and cycling strategies paid little attention to the needs of disabled cyclists, and did not represent disabled cyclists in imagery.

This matters. The grandmother, the disabled person, will see those representations of cycling as excluding someone like them. They may even look at the picture of the ‘cyclist’ and see him (it’s usually him) as a threat, imagining him bearing down on them at 25mph. Similarly the planners themselves assume they’re planning for low numbers, and for the fit and the fearless. We’ll never get to cycling normality (10%, 15%, 20% of trips) while most people see cycling as a sport for a subset of strangely dressed men, rather than how people like them, their mum and their grandma, go shopping.

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Transport authorities have started using images to better represent the diversity of cyclists we’d like to have.

But how do we get that diversity – on the streets, not just on the posters?

First we need to recognise diversity is possible. Normal mass participation cycling is inclusive, even in the UK. Cambridge – our highest-cycling city – has equal proportions of women and men cycling, and around one in four disabled commuters there ride to work. In the Netherlands, cycling mode share increases at older ages, with older Dutch women making a quarter of their trips by bike. And although cycling rates are somewhat lower among Dutch ethnic minority people, their cycling mode share is still nearly 20%.

Research suggests groups under-represented in cycling are particularly sensitive to motor traffic risk. A review I led looking at age and gender found women, and probably also older people, have stronger preferences than men and younger people for protected infrastructure, like that in the Netherlands. Almost everyone wants cycle tracks, but it’s especially important for underrepresented groups.

This isn’t the only important factor (crime is another factor that may particularly concern under-represented groups). But if we want to get the whole country on their bikes, not just young, sporty men, we’ve got to ensure everyone has access to high quality bike paths. I’d like to see the cycling industry do more to support this vision – which will help open up the joys of cycling to everyone, of all ages and abilities.

Grizips, as used by Peter Sagan.

www.cookecomponents.co.uk

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(( INTERVIEW GERARD VROOMEN ))

A DESIGN FOR LIFE A pioneer of several bike design concepts and to this day ground–breaking bike maker, Gerard Vroomen is the mind behind some of the industry’s most imitated curves and aero profiles. We caught up with him at the recent Rouleur Classic for a chat on what we may come to expect on the drawing board in the future, industry standards and what tricks the trade is missing to attract new customers…

On opportunities in design: More of us want to avoid roads. For most of us it’s just not exciting being in danger and city dwellers want to get well out beyond the city limits and explore. For this reason multi-surface bikes are very exciting, in particular because they’re engaging for the duration of the ride, whatever the surface. Over simplifying trails is no fun. Pointing a gravel bike at mixed terrain grants you the best of all worlds.

For the bike dealer, this is an opportunity and for the customer it’s also a chance to re-use old componentry. Gravel is the opposite of a niche, it does it all.

On gearing: I think the greatest progress with 1X is yet to come and will be realised in the industry’s lower-end.

A key fear bike buyers have is clunky shifting. I think that there’s also a tendency in some segments to laugh at people who perhaps don’t understand the controls. So from that point of view, making a product simpler, more accessible and less costly is welcomed.

There will not always be a place for 2X. We’re capable of designing out the front derailleur. The industry will find a way to add a cog. We’ll more than likely end up with 1x13 before long.

On road discs: It’s still early days here, the first generation were essentially glorified mountain bike brakes. For me though, the trend goes one way,

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there’s no going back to rim brakes now. I’ve nothing against rim brakes of course, they work and bikes I desire to own run them, but from a performance standpoint there’s no contest.

When road discs arrived on the scene we immediately began to rethink the possibilities. It’s an innovation you have to try to appreciate fully.

When it comes to wheels, there’s more progress to be had now on tyre and rim development. Some of what you’ll see will be pure marketing, but in the mix of things to come there will be genuine technical advances.

Having no brake surface limitations opens up the potential of road tubeless, which can only grow.

On Gerard’s noteworthy designs: I always thought my legacy would be the curved seat-tube, but it might now turn out to be the dropped chainstay.

We had enormous success at Cervélo in triathlon with our designs, but when others moved to catch up there was some misunderstanding of the fundamentals. A big part of the performance came from the geometry and not necessarily the curve benefits. In bike design it’s not enough to create something aesthetically nice, you must understand the process and reasoning.

Where similar designs have emerged it has only legitimised what we are doing and helped the reputation.

This applies to Strada. Why were people so drawn to it? It came to light

amongst a sea of typically samey bikes. What is it to be “stiffer” and “lighter” now? This has come every year. Eddy Merckx performed fine without these innovations.

On how to draw new people into sport cycling: The bike business needs to work out events! It’s noteworthy that the fastest growing outdoor events are obstacle course style events. They’re engaging, not timed and inclusive.

That naturally draws people in and in a sense gravel riding is the same. We need more events that engage groups of friends. Aspirational events draw people in too.

On the future: I have often thought about the transport and leisure bike segment; my ultimate goal is to do something here. Unfortunately, barriers exist and behaviours are incredibly hard to change. The product is the easy part.

When I talk to people about cycle commuting the pushback is almost always logical, especially when it comes to safety. If you asked an alien to look down on earth and identify the dominant life form they’d point to the car. The bike lobby hasn’t the sway of the motor lobby, but certainly a more united voice would benefit the industry at large. We cannot do nothing; sitting is the new smoking, so cycling has to be built into our current lifestyles to bring about meaningful change.

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(( COMPANY PROFILE HOPE TECH ))

BUILT TO LAST

As far as factory visits go in the bike industry, getting the guided tour of Hope Tech is a bucket list trip. With yet more potential expansion on the horizon, CI.N set course for Barnoldswick, the small Lancashire town in part propped up by this one-of-a-kind UK manufacturing success story.

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B

etween Rolls Royce and HopeTech, the rural town of Barnoldswick employs between 2,500 and 3,000 in manufacturing jobs. At a time when others in the industry are pondering European reshoring with increasing regularity, HopeTech has for nearly three decades been a shining example of what's achievable when you employ enthusiasts who consistently turn out reliable products - ones they ride themselves. Mountain bikers the world over are now buying over 50% of the family-owned business’s production, which is almost entirely made up of aftermarket purchases.

“We don’t like to shout about growth at a time when the bike market is generally suffering, but the business did manage an 18% growth in 2016 and we’re in a position where we now have to assess the next stage of expansion to fulfil global demand,” says marketing manager Alan Weatherill, brother to co-founder Ian. “We’ve just recently purchased a six-acre plot of land over the hill. Hope Mill is now mostly full and we’ve still got the velodrome idea to mull over! 50% of our goods remain destined for the UK dealer, but the overseas business is growing nicely at approximately 25% for Europe and 25% rest of world.”

For those that missed this idea, which dates back to 2013, Hope has tossed around and submitted planning permission to build a research and development space surrounded by a velodrome and performance centre.

That now looks to be closer than ever.

It was just two years ago when Hope last expanded its business with a new purpose-built building to cope with an influx of new machinery. In recent years, this has added about £1.5 million in manufacturing assets to the business every 12 months. The owner of the plot on which the original machining business was built in the 1980s, Hope will have been manufacturing bike parts for 30 years on the land, in 2019.

The newly-bought plot, when built,

will prioritise things like the firm’s startlingly large wheel assembly business, which Hope indicates may well now be the largest of its kind in the UK at 25,000 units a year and growing.

With the advent of road discs, the trend toward wider rims and many more sub-segments of road and mountain biking, Hope tells us there’s some 1,000 SKUs needing assembly and storage space to ensure that dealers have consistent stock access. At present, the firm is in theory capable of machining a hub, lacing a wheel, shipping to and equipping a customer's bike within 24 hours.

That’s a big ask, of course, but it’s something to shoot for, explains Weatherill, but with wheels being built from 6am through to 10pm nothing’s beyond the realms of possibility.

Those who have kept a close eye on the manufacturer’s progress will be keen to know more about the ambition for the firm’s growing carbon fibre arm. Having recruited British Cycling’s consultant on carbon for the past three Olympic Games, Hope’s inhouse knowledge has enabled the manufacturer to quickly establish a series of products that have racked up

Garden Envy Hope’s staff have access to their very own pump track

the column inches, most notably the complete bike project. Though only making four per week, the £7,500 bikes are selling as fast as they’re made. What’s surprising for such a high ticket item is just where the 250 bikes estimated to be produced per annum are selling. The Australian distributor has placed such faith in the bike that it has purchased a good stock, while dealers in Italy, Germany, France and select Nordic countries are also invested.

“There’s no downturn in the enthusiast market as far as we can see,” says Weatherill, “so business has held steady and given our position in the market, increased on many fronts. We sell largely to specialist shops and they’re tending to be the businesses holding their ground in the current climate.”

To our surprise, Weatherill actively brought up a recent CyclingIndustry.News discussion piece on the industry’s practice on carbon recycling, pointing to a single cardboard box filled with discarded parts found not to be up to standard. Much like the firm’s metalwork, waste is limited to the bare minimum simply because of precise and complete use of raw materials.

“We’re trying to use the same principles we practice with aluminium production,” says Weatherill. “That’s two years’ worth of production waste in that single box. The offcuts have been sent to local schools for them to learn how to use the material in school projects. Carbon production may well move over the hill once our next stage of expansion is complete.”

As far as the current premises goes, it’s worth painting a picture of the kind of environment and legacy Simon Sharp and Ian Weatherill have created for the Hope family. Eight years ago Weatherill moved to provide the, at the time, 80-strong workforce with bikes to ride on both to and from work. The upside of this, Hope’s product receives extensive testing by the enthusiast workforce. Today that fleet stands at

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(( COMPANY PROFILE HOPE TECH ))

“ENDURO WHEELS ARE OUR BIGGEST SELLERS AT THE MOMENT, BUT THERE IS, OF COURSE, A DECENT ROAD RANGE NOW TOO.” 300 bikes strong, each allocated to a staff member for the year. In some cases more than one bike is offered.

“We’re 100% run by riders, if staff don’t ride when they start, it doesn’t take them long once they’ve arrived,” we’re told. “Our products can realistically take years of testing in the real world and that’s on top of our in-house test rigs, so our staff’s usage of the product teaches us a lot. Our tests place Hope’s goods well beyond the benchmarks required.”

Staff are further treated to an extensive on-site pump track and jumps on which to develop their skills. The working environment is unlike any other we’ve seen in the bike industry and packs immense character. There’s clocks made from disc rotors, door handles fashioned from recycled crank arms, aluminium billets raising desks to eyelines, staff pool tables and a Wattbike studio, as well as a well-worn pair of Guy Martin’s shorts on the wall.

It’s an immersive brand experience even away from the production rooms.

The result of Hope’s investment in its people seems to be a highly engaged workforce who bring a lot to the table in return. To name just one project driven by staff in recent years, Hope’s Women’s Enduro is now said to be the second largest of its kind, drawing 250 entries in its first year and engaging a previously underserved demographic.

“We’re keen to get more women and kids cycling,” continues Weatherill. “I sat in on a recent BA talk and Kevin Mayne of the European Cyclists Federation hit the nail on the head when he said we need to grow the pie. Investments in things like our Academy kids programme are just small ways we can do our bit to engage new people.”

The Academy rental programme is

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an innovation of Hope’s that makes a lot of sense to parents looking for a quality kids’ bike. Working as a membership scheme costing between £5 and £29 a month, the Academy bikes tally around £1,500 in value, a figure near unheard of in the segment.

Built with a mix of Hope’s own goods and lightweight aluminium frames from Early Rider, the bikes are built to last and more importantly, to give kids a genuinely engaging cycling experience during what might be their first time aboard a bike. The bikes are sadly not available to shops, but it is hoped the scheme will create customers as it expands across the country.

So what are the key opportunities for the Hope dealer at present?

“Stock things in black and orange, they’re our best-selling colours,” jokes Weatherill. “I’d say invest in making customers aware of our wheels. The range has great depth and they’re delivered destressed and hand finished, so you can be sure they’ll go the distance. Enduro wheels are our biggest sellers at the moment, but there is, of course, a decent road range now too and with discs getting a thumbs up we expect these to begin to move in bigger numbers. Our rate of return on wheels is negligible, it’s a solid product all round.”

At CoreBike, Hope will introduce new point of sale material, including replacement slatwall to better showcase the range. Hope is at present ramping up production of its carbon handlebar range, something that the firm expects to have stronger stocks of from the start of 2018. As is often the case, there may well be sneak peaks of other experiments too, so keep your eyes peeled for updates.

Hopetech.com

HOPE TECH by numbers 25,000: The number of wheels now rolling off the in-house assembly lines each year.

30,000:

How many brakes produced annually by the business.

250 tonnes: The volume of raw aluminium processed in the factory each year. Every little scrap filing is recycled.

85,000: The number of hubs, excluding those in wheelsets, made per annum.

300: The number of bikes made available to staff to ride as part of the company’s lease programme.

80%:

The percentage of staff employed by hope who live in the Barnoldswick community.

6 to 9 weeks’ worth: The approximate amount of raw material stocked at any one time.

50%:

The volume of produced now exported.

goods

£500,000: The cost to buy just one of the CNC machines, working round the clock. £3 million worth of machinery is run by one staff member alone.

open For business Flat tyres and Flat whites, bidons and bib shorts, bike Fits and custom builds, group rides and coaching time.

Our specialist business insurance for bicycle shops is tailored and flexible. Covering all elements of your business, it allows you to concentrate on the most important thing, running your shop.

Visit business.yellowjersey.co.uk to discover more.

Bicycle Mechanics • Cycle Tour Operators • Cycle Events • Bicycle Shops Wholesalers & Manufacturers Insurance • Professional Athletes • Cycle Teams

STYLES_CJ_Jan18.qxp_Layout 1 14/12/2017 13:45 Page 1

(( FOCUS ON... CATCHING THE NEXT WAVE ))

WHY WIGGLE RULES THE WAVES OF THE WORLD WIDE WEB WORDS: John Styles, director at cycling industry consultancy Cyconomist.com

I

n December 1998 the sky turned black over Brighton as a Force 6 gale rolled in off the sea. So, like many other young men in their 20s, I stuffed my surfboard into the Volvo and headed for Shoreham Harbour. When we got there, the wind was so strong that it took two of us to carry each surfboard the 1/4 mile walk from the car park to the sheltered harbour. The wind was too strong for our usual trick of walking along the harbour arm then dropping into the sea behind the break. So we had to battle it out against an exhausting high tide shore-break,

often being washed right back to the beach. The wind was straight in our faces and raining hard. The water just 4° and stinging cold. Then, just as we got past the shore-break, it hailed.

Not the small stuff either.

I sat on my board with dozens of other surfers waiting for the tide to drop and the right waves to appear.

Hands tucked under our armpits, shivering, many of us looked to each other thinking, “what the hell are we doing here?!”. Then the eye of the storm passed over and a huge patch of sunlight opened up, illuminating the whole harbour. The sea turned

from flat grey to luminous bright green. The rain stopped, the wind dropped. Perfect, clean, 5-6ft set waves started rolling in.

I have never been a good surfer and was out-paddled by most of my buddies to many of these fantastic waves. I caught a few, but soon my arms were tired. I knew the tide would continue to drop and that the punchy short borders would soon start to give up and my Longboard would come into its own in the lower gentler swell.

Out of curiosity (and a desire to keep my arms and body warm and moving) I paddled further out to the mouth of the

This sadly isn't Brighton, nor is that the author catching the best wave of his life, but the point remains; if you're in the right place at the right time your business could be on the next big wave

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STYLES_CJ_Jan18.qxp_Layout 1 14/12/2017 13:46 Page 2

Surf’s up

FACE OF INNOVATION

Schumpeter’s Kondratieff waves accelerate

Water power Textiles Iron

Steam Rail Steel

FIRST WAVE

1785

Electricity Internal-combustion engine Chemicals

SECOND WAVE

1845 60 years

harbour. Just as I got there and turned my board back to face the shore, I felt the water drop rapidly beneath me. My stomach lurched as I sank lower into the trough that precedes the wave. I looked over my shoulder and stared at what was easily the biggest wave of the day peaking as it came around the mouth of the harbour.

I'd never seen a wave that big this far out in the harbour and I’d never ridden a wave much over waist height. So facing something just over head height, right up against the 20 ft of concrete harbour arm was more than a little daunting for me. I made a

THIRD WAVE

1900 55 years

Petrochemicals Electronics Aviation

FOURTH WAVE

1950 50 years

snap decision to paddle and I paddled as hard as I could, as long as I could.

Even then, I only just gained enough speed to catch the wave, shuffling my weight forwards along my 10ft longboard and taking off right from the peak. As the board dropped rapidly to the bottom of the wave I clumsily got up to my feet, executed a turn and worked it back up along the wave. I passed all of my friends on the way to the shore. I was the worst surfer in the water and I had caught the best wave of the day. In my case, it was pure dumb luck. I had been in the right place at the right time.

Digital networks Software New media

FIFTH WAVE

1990 1999 40 years

2020

30 years

About 50 miles along the coast in Portsmouth, and around about the same time, Mitch Dall was actively looking for the next big wave in business.

The wave he saw was part of the fifth Kondratieff Wave – the Internet revolution. These waves are deep seated changes in the Economy, much deeper than the short term boom/bust cycle. They change the fundamental way that we go about our daily lives - living, producing, working and spending. They are paradigm shifts – a change in the nature of how things are done...

... And it wasn’t just luck that he found it. As I heard it from some of Mitch’s staff who worked at the Butlers Cycles store at the time, “Mitch was always looking for the next big thing, I remember him going off to some computer show and coming back with a kind of vision. Everyone is going to have these in their living rooms he said.

They are going to buy stuff on their computers all the time”.

Some established businesses at the time told me, “When I heard he was gradually closing parts of the store to focus on this, I thought he was mad.” But that's the thing, if you're at the back of the pack, beyond the easy set breakers, looking for that next Big Wave you might be mad, but if you catch just a glimpse of it, perhaps you aren’t. There was a time everyone used to talk about "surfing the internet" – like it was cool and novel and fun, like surfing. Not an every-day hum drum fact of life, as it is now. Mitch saw that change coming, early.

Wiggle was formed by Mitch and business partner Harvey in May 1999, and I still have a copy of September 1999 MBUK in my collection. It features one of Wiggle’s first adverts, back when the logo was silver. I thought, “what a stupid name for a website and what an awful logo. That will never work!” How wrong I was. And with the benefit of hindsight and an awful lot of experience, I can now look back and see it in a fresh light...

WWW.CYCLINGINDUSTRY.NEWS // 019

STYLES_CJ_Jan18.qxp_Layout 1 14/12/2017 13:47 Page 3

(( FOCUS ON... CATCHING THE NEXT WAVE ))

This advert was from September 1999 in MBUK...

WHAT DO YOU NOTICE? SIMPLE: It’s very different to every other busy “let’s cram everything we can on the page in 4pt font” mail order listing advert RELATIONSHIP: They are not trying to sell you 1-specific-something, they are trying to start a relationship WEB-ONLY: There’s no phone number or address. They are confident enough to say, just come to the website – it’s all online.

BRANDING: It’s all branding. Their branding. Plain and simple. No-one else’s brand, or products, or prices, or terms.

FORWARD-THINKING: The wiggle logo is set against a sci-fi style space scene. It’s saying, “This is the future, there are limitless possibilities”, and they were right. You can see their mind-set, their forward thinking, right there on the page – Wiggle were one of the original disruptors.

Here’s how things took off from there*: 1995 Mitch Dall, a founder of Wiggle, bought the shop “Butlers Cycles”.

1999 Mitch Dall and Harvey Jones founded Wiggle. Later, Paul Bolwell joins.

2009 Sales were £55 million. Mitch Dall sold his stake to investment firm ISIS. 2011 Sales were £86 million. Wiggle acquired by VC Bridgepoint Capital.

2016 Wiggle and CRC merger – combined turnover of £400 million.

Reading the Wiggle timeline makes it look like plain sailing. But that’s far from the case, many other people were paddling for the same wave. So what made the difference? Some people would say, Paul Bolwell, and just leave it at that.

Wiggle were always scrupulously professional. In their pursuit of customer service, ease of use, free returns, fast delivery, after care. In 15 years of going in and out of bicycle stores on a daily basis and listening to thousands of consumer interactions, *Source: Wikipedia

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I have never, ever, overheard a single consumer complaint about Wiggle’s service. They cleaned up the whole “please allow up to 28 days, take your money, then order it from the supplier” sector. They built Trust and Service in a sector where previously a few sharks had muddied the waters for everyone.

And in cleaning up, they cleaned up.

From the suppliers, I have always heard they pay their bills. On time.

Always. Not forgetting the suppliers, we should recall that the UK benefited from a very robust and professional supply chain and importer/distributor culture. It’s likely that the UK was the best place in the world to start a bicycle dotcom. In addition, the UK had a strong early adopter culture for internet shopping. We got the best waves and Wiggle rode them best, although it was close at the end.

If Wiggle hadn’t bought CRC, perhaps CRC may have bought Wiggle. When you reach a two horse race in a maturing market that favours efficiency through Economies of Scale – mergers are inevitable. So further mergers and acquisitions (abroad) come as no surprise. The Wave that started here washes all around the world.

And let’s not forget the other surfers of the world wide web.

Paddling hard were Top Banana, Wades, Obsession (UK), Cycles Unlimited (UK), Blazing Saddles (South Coast), Dream Cycles, Armstrong Bike Dock, 9 feet.com.

SBR. CyclesportUK, Farnham Cycles,

UKBikeStore, Dotbike. Just the tip of the iceberg, so many have faded away or are no longer trading.

Anecdotally, having worked in the cycle trade for the last 15 years, my gut feeling is that the online only sector has an attrition rate of about 50%. As opposed to the bricks and mortar sector which has an attrition rate of perhaps 5%-10%? (and that may be lower on a Net basis). It's a lot more hazardous paddling out to sea than it is fishing from the shore.

These businesses that came and went were owned and run by people much more resourceful, hard-working, knowledgeable and skilled in business than many of us. I used to build websites in my spare time, but I chose very early on not to “open a web shop and paddle”, as I always knew there were others out there who could do a better job than me.

I remember about 2005-2006 many bricks and mortar stores telling me, “selling online is easy, anyone can do it, just build a website, list some products and it’s job done.” Working inside a wholesaler, I recall receiving dozens of applications from bedroom-based start-ups – no premises, no business bank account, no VAT number. I think many of these folks were looking at the other surfers and thinking, “Hey that looks like fun!” They were not looking at the sea.

In my humble opinion, the attrition rate was high with good reason. If you paddle out against the shore-break, at high tide, with an onshore wind

STYLES_CJ_Jan18.qxp_Layout 1 14/12/2017 13:51 Page 4

turning the waves to mush, you are quickly going to become exhausted and be washed right back to shore.

And even if you do pass the breakers you're going to find things aren't quite as you expected as you reach the break. There are going to be plenty of other people paddling for the same wave and many of them will have been doing it a lot longer than you.

Wiggle rode the waves to success not just by catching the right wave at the right time, but by being fully committed to it and having the vision to see it through. With several management changes (Humphrey Cobbold, Stefan Barden, Will Kernan) and buyouts (ISIS, Bridgepoint) along the journey it appears like someone caught the wave on a short board, switched to kite surfing, to a jet-ski, powerboat, superyacht, super-tanker. As the waves dropped and the sea flattened, Wiggle continued to evolve and adapt.

And they did that better than anyone else at every step of the way. Now the sea is flat and calm, and we see the super-tanker gobbling up other ships (like a scene from a James Bond movie) it comes as no surprise that this is the natural order of things. Despite short-term losses, their on-going success seems assured.

As an independent agent I also have the freedom to dip my toe in the interesting world of Consulting. Where the questions are either obvious, or deeply profound, depending on who is asking the question. Several projects recently have involved large financial organisations who often ask the same type of question. “How would an organisation replicate the success of Wiggle, Rapha or other high-profile cycling success story with a lot of media coverage”.

My answer is most often the same.

You can't. At least, not without a time machine. Their success is a product of time and of its roots and often those roots are much further back than people [from outside the cycle trade sector] expect. Of course, there are some very big players in the internet sector after Wiggle, but notice many of them also have very deep roots, for example, Merlin, Planet X or Sigma. But in the race for the No.1 spot, Wiggle had perhaps already won

back in 1999 when their very first adverts went live. It’s time to look at the next wave, not chase the past.

First off, the fifth wave isn’t done with us yet. As my brother (a CTO with a major website) put it to me, “so far the internet revolution just tidied up a lot of existing offline sectors and activities, it just made things more efficient. Now it’s moving on to things that did not exist or could not be done before the internet was around.”

And, there is another Wave coming and it's going to make this one look like a tea party. The sixth Kondratieff wave is going to feel like we are living in a scifi movie. The most profound change is that Energy will become clean, almost limitless and so cheap it might as well be free. The changes are going to be

deeper, faster and more transformative than anything we have seen in our lifetimes thus far (see Jay Townley’s articles about the fourth Industrial Revolution – which is kind of the same as the 6th Kondratieff - for more).

And if you want to research the subject yourself, I recommend “The Zero Marginal Cost Society” by Jeremy Rifkin.

4th Industrial Revolution

3rd Industrial Revolution

The connected enterprise leads to the 4th industrial revolution.

Connecting production facilities with the internet of things.

Combining IT and electronics allows for further automation of the production process.

2nd Industrial Revolution Mass production fuels the 2nd industrial revolution with the help of electrical power.

We are already just seeing both the latter part of the fifth 1st Industrial combined with the early sixth Wave Revolution impact on the cycle trade: Strava heat maps, bike-share, self-driving cars, automoIntroduction of mechanical production facilities tive giants entering the sector, 3D printing, drone supported by water and steam power. delivery, the Sharing economy.

Now there are other waves too, I’ve mentioned Demographic waves before, for example when discussing the BMX>MTB>Road>e-bike booms all being linked to the same individuals over time. In all there are five major waves that affect us:

Wave

Typical Frequency

Example

1

Macro-Economic Boom/Bust Cycle

7 Years

80s growth into early 90s recession

2

Demographic Waves

Whole Generations

Impact of Baby Boomers

3

Socio-Economic Waves

Variable

China’s transition to a market economy

4

Socio-Political waves

Variable

Impact of globalisation/polarisation of income

5

Kondratieff Cycle of Innovation

30-50 years

Horses replaced by internal combustion engine

These Waves will continue to impact (and interact with) each sector of the cycle trade.

So what’s occupying my evenings and weekends now is research into how each wave will impact (positively and/or negatively) sub sectors such as road, e-bike, MTB etc.

Believe it or not, I may even end up with a concise, one-page summary. One day.

There is nothing we can do about these coming changes, except perhaps, be prepared for them. Water always wins.

WWW.CYCLINGINDUSTRY.NEWS // 021

MARKET_PBMA_CJ_Jan18.qxp 18/12/2017 11:49 Page 1

(( MARKET RESEARCH PBMA STUDY ))

BIG BUSINESS? As part of CyclingIndustry.News’ partnership with the Professional Bicycle Mechanic’s Association we’re able to bring you an exclusive look at a survey with over 540 of its members detailing shop diversity.

Wondering how yours compares to the average (albeit primarily US-based) store? Look no further…

Q1

HOW LARGE IS YOUR BUSINESS PREMISES?

Over half of the 543 responses to the PBMA’s survey said that their store footprint measured shy of 3,000 square feet, with 10.5% retailing from a space under 1,000 square feet. As is to be expected, numbers tail off rapidly for store sizes over 5,000 square feet; just 6.5% had the luxury of a footprint ranging between 5,000 to 6,500 square feet. With franchise growth in the U.S. it’s interesting to note that 7.37% described their business as “mobile”.

Q2

WHAT PORTION OF YOUR STORE DO YOU DEDICATE TO STORAGE?

18.1% of the 539 who answered this question dedicated as much as 20% of their shop space to storage of goods or waste products. This was narrowly the most common response, with 15.7% allowing 15% of shop space to be set aside for storage. Making better use of space, some 14.1% dedicated 5%, or less, of their space to storing goods. Just shy of 10% allowed up to 30% of their space to be dedicated to storage.

Q3

WHAT PERCENTAGE OF YOUR SHOP IS FILLED BY THE SERVICE DEPARTMENT?

By far the general consensus of 537 responses is that bike shops are generally dedicating 20 to 25% of their store footprint to the service department 20.6% and 13.5% of responses, respectively. Tallying with the percentage who outlined that they were mobile only units, 5% indicated that their business revolved solely around workshop trade.

Q4

HOW MANY STAFF WORK IN YOUR SERVICE DEPARTMENT?

The majority of cycling industry workshops employ no more than four staff, with nearly a quarter employing just one dedicated mechanic, according to the 520 responses here. 21.5% employ two dedicated mechanics, 19.2% stretch to three and 14% rely on a team of four dedicated technicians. A further 15% recruit between five and eight, but very few stores recruit more than this number.

022 // WWW.CYCLINGINDUSTRY.NEWS

Q5

HOW MANY PEOPLE DO YOU EMPLOY?

A wide range of shops responded to the PBMA’s survey, with just 4.25% indicating that they were able to employ over 40 staff. For the most part shops were only able to employ a handful of staff; 16.8% employed one extra, 11.5% two additional staff and 9.6% three staff. Around 35% employed between five and 10 staff, with additional numbers dropping off sharply thereafter.

Q6

OF YOUR EMPLOYEE COUNT, HOW MANY ARE FEMALE?

Just shy of 50% of the 352 stores to answer have recruited a female staff member. Interestingly, the majority of shops chose to skip this question, perhaps indicating that the unavailable 0 was unable to be selected, potentially skewing the figures significantly.

Around 20% employed two females, and 12.5% recruited three women to work in the business.

Q7

WAS YOUR ORGANISATION PROFITABLE IN 2016?

Thankfully the vast majority of the 515 that responded to this question – some 80% - were profitable in 2016.

The remaining 20% were not.

Q8

HOW HAS 2017 BEEN FOR YOUR BUSINESS?

Again, most are holding relatively steady in a difficult climate, with 41.56% stating that they have made a better start to 2017, over 2016, and 34.35% have kept the business at similar levels. 24.1% are performing worse than this time last year.

Q9

HOW IS THE SERVICE DEPARTMENT DOING YEAR-ON-YEAR?

In keeping with the general trend in the UK in recent years, trade in the workshop with the 524 respondents has primarily grown year-on-year; 48.3% reported enhanced trade. On the contrary, just 16% reported a decline in business for their technicians.

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SERVICING_Fox_CJ_Jan18.qxp 14/12/2017 13:42 Page 1

(( SERVICING ))

By the time this magazine lands on your doormats, you'll be able to book Fox service work via Silverfish. So what’s changed? CI.N tours the Risca service centre to find out...

SILVER FOX W

hen news broke of Fox and Mojo Suspension parting company in October many in the business were quick to voice concern that things would never quite be the same again. Thankfully, the rumour mill was wide of the mark and in fact very little has changed, bar founder Chris Porter’s moving on to pursue his new venture – Mojo Rising.

In fact, things have very likely improved for trade accounts. With Silverfish coming on board as the firm’s distribution partner – in the process recruiting the rest of the long-standing Mojo team (including the dogs) and taking on the business in much the same form – trade accounts call the very same number and team as before, with the added bonus of being able to place an order with the distributor while on the same call.

“I think that’s the message we’d like to get across, nothing’s changed, it’s the very same friendly voices on the phone and the very same team – some of whom have been doing this for 15 plus years – handling each and every service job,” explains Silverfish’s retail marketing manager, Antonio Fiore.

That team is now headed up by Tim Williams, who starts by saying that staff are still working to a two-three day turnaround, as before.

“Anything more than five and I’m not happy,” says Williams as he gives a guided tour of the warehouse. “Fox is

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such a popular brand in both OEM and aftermarket spec choice that it quite simply has to be backed up by this high level of service. We like to think the brand has unparalled support in the suspension biz. You wouldn’t buy a modern BMW without specialist garages to service the product and Fox is much the same. It’s a tech product, backed up by experts who have a deep history in backing the brand.”

Fox’s position as both a bike and motorsports giant has made the brand a seriously attractive proposition for the bike industry, believes Williams.

“The quality control and engineering know-how gained from the automotive arm has trickled through to the bike business and that’s given Fox a proposition that has become very attractive to bike makers. The 32, 34 and 36 are ubiquitous on bikes, which shows the trust manufacturers place in the brand.”

As bike retailers will know all too well, any product with moving parts needs to be well built to withstand UK conditions. With Mojo’s office overlooking the trails at Cwmcarn, there really is no better place to host the team, hence the lack of change in the day-to-day operations of the business.

“If you think about it, stanchions go up and down literally thousands of times during a ride. The typical muck, dust and grit of the UK trail can make a real mess of bike compo-

nents, so quite simply they must be well sealed and built to endure. In terms of finding problems with bike goods, the UK climate is a market leader on the global stage,” says Williams. “With the views from our office our staff are as excited as the next consumer when a new product lands, so it’ll go straight on our bikes.

We like to know how something handles in some of the toughest conditions right away so we know what to expect when a unit is returned after good usage. With Fox it’s surprising what they’ll take, but obviously we advise regular servicing.”

So, are consumers realistic about their service schedules, we wonder?

“If you notice a difference in performance after your service then you’ve definitely left it too long,” says Williams with a telling smile. “Of course if you invest in a high performance product then it’s sensible to conclude you’ll want it to operate it at its highest level.

Riders who understand that keep a half decent schedule, but of course there’s some education required at dealer level to get that message across to the masses. Many do tend to ride a product until it breaks and then wonder why. The Key is to teach customers to spot changes in ride feel, as well as to carefully clean away dust and grime after each ride.”

The three main expenses within a fork, says Williams, are the damper,

SERVICING_Fox_CJ_Jan18.qxp 14/12/2017 13:42 Page 2

the upper and lower assemblies.

Very rarely is a full replacement needed, we’re told. In fact, what’s quickly evident from a tour of the Newport facility’s checking-in area is that the brand’s products do indeed tend to endure.

“It’s quite common that we get an ancient product in for service and of course we never throw away a working part, so our catalogue of spares is extensive. You should now be able to see that on the website, though there’s a lot to upload! There’s a strong chance we have spares for almost any job involving Fox right here on the shelf, so even if it’s not immediately obvious, dealers only need call to track down a part and find out if the team can handle the job,” adds Williams.

For dealers with a job to be completed Mojo ask that shops bear in mind the delicacy of the product, in particular the stanchions. So how should a fork or shock be packed?

“Preferably with biscuits, we like

those! It’s worth bearing in mind how couriers treat packages at times, so preferably we like a clean product packaged in either bubble wrap or a reinforced box, such as the type these forks come in. We do unfortunately see courier damage too often. Each product is inspected once received to log the condition,” we’re told.

For the newbie mechanic, Williams offers some parting wisdom on fork setup to ensure your customers get the most out of their suspension.

“Always set the air pressure and the sag first, then move on to things like the rebound and compression rates. If you’re unsure, Fox now have stickers on the back of fork legs to help you get the right rider weight to pressure ratios. If the customer still thinks the fork needs fine tuning, talk to them about volume spacers, which are quite easy to fit. Custom tuning only really applies to the very highest level of the sport, but it’s always an option if the customer insists.”

Contact details FOX SERVICE CENTRE 2 RBF Business Centre, Pontymister Industrial Estate, Risca, Newport, NP11 6NP Tel: 01752 843882 Email: sales@silverfish-uk.com Dealers can also book servicing and order spares via Silverfish B2B.

“IN TERMS OF FINDING PROBLEMS WITH BIKE GOODS, THE UK CLIMATE IS A MARKET LEADER ON THE WORLD STAGE.”

WWW.CYCLINGINDUSTRY.NEWS // 025

SELLING_Power_CJ_Jan18.qxp_Layout 1 14/12/2017 13:19 Page 1

(( SELLING POWER METERS ))

POWERING YOUR SALES Once the reserve of paid professionals, more enthusiasts are purchasing power meters than ever before in a bid to research and ramp up their riding.

David Walker of Stages Cycling explains how bike shops can take advantage...

WHO’S THE CUSTOMER? Power meters are usually associated with bike racers, triathletes, and other competitive athletes. At this point, virtually every pro uses a power meter but the market for power measurement is much broader than that. Beyond racers, consider any rider training for a goal event such as a gran fondo, a century or a charity ride. A rider will find a comfortable power output during training, then translate that effort to the event to make sure they’ll finish strong.

Or how about someone who’s taking up cycling to lose weight? A power meter will allow them to measure and track calories burned in a much more accurate manner than using estimates from heart rate. Bottom line, the market for power measurement is much broader than “just racers.”

ASK THE RIGHT QUESTIONS If you wait for people to ask for a Stages or other power meter, you’ll only be getting a small fraction of potential sales. So here’s how to identify potential buyers!

First, find out if they have a goal for their cycling: “Are you planning to just go out and ride for fun, or do you have a fitness goal in mind? You know, training for an event, losing weight, or just monitoring your progress as you improve?”

Note that it’s important not just to ask about fitness, but to give them some examples that they may either have

026 // WWW.CYCLINGINDUSTRY.NEWS

already thought of, or that your question might prompt them to want to do.

If you get a positive response, next, find out how technical they are. “So have you used a bike computer before, do you have a Garmin, or a SmartPhone? Or do you use Strava?” They need to be at least somewhat technically inclined or equipped before they’ll be interested in power monitoring.

With positive answers to these questions, you are ready to talk to them about how a power meter can help them meet their goals. Of course, it helps to also have a sense about their budget. A £380 ($500) hybrid shopper may not bite on the power meter this time, although it never hurts to briefly introduce the concept of measuring power. This is especially true if the rider has an indoor cycling background as they may have been introduced to the concept of power during their indoor classes.

A £3,800 ($5,000) road bike buyer who drove up in a BMW is a more obvious target; someone who’s into the tech and seeking a goal will for sure consider spending 10% of the bike price, no matter what their age or current fitness level. But there are plenty of customers in between those.

Think again about their goals and how power might help them be reached.

Don’t leave MTB riders out either – remember that all top cross-country racers, enduro pros, and most downhill guys also train with power.

SUMMING UP Power is the single best investment in helping your customer reach their fitness and/or competitive goals. The more you measure, the faster you’ll progress. And Stages power meters are quick and simple to install – 10 minutes and you can start down the path toward your goal.

SALES TIPS • Work with brands that protect your pricing. For instance, Stages does sell consumer-direct, but at the MSRP price only. Dealers have the same 48hour delivery, but with the need for installation it means the customer will buy it from you.

• Power meters provide an opportunity to upsell on cycling computers, especially to ones like Stages Dash, which delivers a complete ecosystem.

• Consider working with brands that allow easy, low-investment stocking of multiple options that will work seamlessly with the most common bike specifications.

Workshop_CJ_Jan18.qxp_Layout 1 14/12/2017 14:19 Page 1

Tutorials to help you keep your customers happy...

The importance of Di2 updates and customisation APPLYING Di2 updates is an effective way of getting your customers back into the shop where they will hopefully make additional purchases whilst the update is being applied – a gel and a CO2 cartridge or (depending on the salesperson) a brand new bike… all money in the till that wouldn’t have happened had the customer been on the premises. Keep an eye on Shimano’s e-tube project webpage (e-tubeproject.shimano.com/firmware) for the latest update patches. If you keep a record of your customers’ bikes, including which Di2 groupset they carry, you can check in to see when updates are due and use this information to call the customer in for a service. Pricing for updates varies widely and it’s not for me to tell you how much you should (or shouldn’t) charge – but we’ve had mechanics through on the Cytech Technical courses who have charged from nothing all the way up to £35. I guess knowing your customer will help a lot in understanding how to price this work.

Di2 needs the latest firmware installed in each of the components to effectively ‘talk’ to each other. It’s possible that if the Di2 groupset has been purchased sporadically in dribs and drabs then the firmware in each of the components will be a different version. A quick plug in via SMPCE1 (or a check wirelessly with the e-tube project App) will flash up any components not installed with the latest firmware – (providing of course you keep e-tube project itself up to date) simply installing the components to the bike in the hope that the firmware versions are the same can be a bit of a lottery in this instance. This could manifest itself as a Di2 groupset that fails to respond even though the battery has a full charge.

The App based version of e-tube project really comes into its own when in the field (almost literally when it comes to ‘cross and mountain bikes!) allowing quick adjustments when it would be impractical to have a laptop or PC connected to the bike. It’s great to now have it available on Android as well as iOS, but be aware that the version of Bluetooth Shimano have used to communicate is the ‘LE’ type which not all types of tablets or phones have. If you are not sure if the device you have will work or not, check the website's 'application' tab for a list of currently supported devices.

We’ve had issues where more than one mechanic tries to pair (wirelessly) with the bike, in this case of course only one will be successful. The App allows you to password protect the Di2 groupset, but the problem with this is that you have to document the password somewhere to enter it later (customers details would be a good place to do this) and the device can sometimes hold old passwords in its memory, which will flag up that the passkey you enter is incorrect. If this happens then go into your Bluetooth settings on your device, tap the ‘I’ symbol next to the device and then tap ‘forget this device’ you will

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By Julian Thrasher, ATG Training

need to complete the pairing process again to re-pair the device to the Di2.

For customers with the older 9070 or 6870 Di2 groupsets a good upgrade (and potential sales opportunity) is the battery (either to a BT-DN110 internal or BMDN100 external cradle) and install a D-fly wireless communicator to allow the use of the Bluetooth wireless feature, but also to allow the groupset to communicate wirelessly via the Ant+ protocol with a Garmin or the increasingly popular Wahoo head units. This is a cool feature that gains a whole load of features including battery percentage remaining, which gear you are in and (leading us neatly into the next piece) you can configure the shifter buttons of the Di2 (on the Garmin Edge units at least) to the customers’ individual requirements.

Customising Di2 for the customer is a great way to offer your advice and expertise to effectively ‘tailor fit’ the bike to the customer, much like you would with brake lever set up (lever reach) and we can use e-tube project to create personalised customer presets based around the way that the customer rides. These presets can be saved to either your desktop or mobile device and then used in the future so in the case of a ‘cross bike where the rider may be lucky enough to have two (or more) spare bikes, we can use these preset files to ensure that each bike shifts exactly the same, or we could look at the conditions and have a set up that would be used later in the race - if the course dried or got muddier, we could have an individualised setup that reflects what the rider wanted from the shifting.

Note that if you get carried away and cannot remember how the Di2 was configured to begin with and you have not saved a preset file, then clicking the ‘restore default values’ button will not be of much help, as this will restore it to Shimano’s default settings, not the customer’s.

Bear in mind that this is open source material (meaning that you don’t have to be a dealer equipped with a password to access the e-tube project site) so it’s feasible – especially so with the App based e-tube project – that the customer can download the updates and customise the Di2 themselves, but we usually know how this ends up…

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(( WORKSHOP MUST-HAVES ))

Stuff your workshop should have but probably doesn’t.

WORDS: Ellis Blackman, Fibrax THERE are a decent number of items on the market that every mechanic should have in their workshop, but that for one reason or another tend to fly under the radar.

I’m a bit of an aficionado for a tool that makes the job a dream, whether it increases quality, efficiency, or is just plain rad.

First on my list to introduce you to is the Quaxar Cable Crimping tool, it’s certainly one of my favourites and so commonly used.

This tool has a 4-point mechanical system in the centre that will give a perfect repeatable crimp every time.

Now I, as most readers do, previously crimped cables with a set of side cutters or with the proper Park Tool CN-10 – These tools clearly do the job, but I’ve always wanted more.

To me crushing a bit of metal on a wire just wasn’t and isn’t, right. Sure, you can change the colour of the bit of metal, or you can even crimp on your special little pattern, so you know if it was you that last touched the bike, but you’re still damaging a component so the wire doesn’t fray.

Enter this nifty little thing: the four equal depressions in the wire end cap do not deform the cover outward, they

give a nicer look, a stronger feel and, it just looks like it’s the proper way of doing things.

I’ve built Halfords’ bikes, I’ve built ten grand bikes and everything in-between.

This crimp tool gives all bikes an edge, you might not notice it at first, but when you do it makes a hell of a difference.

Show your most awkward customer his/her bike after a service and point this out. The added attention to detail really makes a difference, something that separates a “proper” bike shop from the rest.

Citrus-Lime Cloud POS Same focus on driving your success in cycle retail.

New, simple-to-use and more powerful cloud software.

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Visit us at these shows The Bike Place: 14th - 16th Jan COREbike: 21 st - 23rd of Jan

Only a few months into her first bike shop venture, Jenny at Ride Bikes in Ulverston serves another happy customer. Photo by Citrus-Lime Account Management Team member, Lizzie.

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TOWNLEY_CJ_Jan18.qxp_Layout 1 14/12/2017 14:05 Page 1

(( BIKE SHOP STRATEGY ))

A BIKE SHOP THAT DOESN’T STOCK BIKES?

There are plenty of ideas tossed around on just what the future of bike retail looks like. Here Jay Townley advocates that stores will be shaped primarily by consumer shopping habits and that, if they choose to showroom, then let them...

I

often get asked: “What will the bike shop of the future look like?” First of all, I think there will certainly be bike shops in the future – they just won’t be like the bike shop I worked in from 1957 until 1966, or the bike shops that we know today.

Second, there will be many types of bike shops in the future, and some definitely will not stock new or used bicycles.

In a recent tomdemerly.com article titled: 10 Things Retailers Should Learn From the TriSports.com Meltdown, which I recommend every bike shop owner read, the author Tom Demerly offered number 4, Do Have Lots of Capital, with the conclusion:

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“In its current iteration, the bicycle retail business model is a rotten investment. But, a new, emerging business model long on service and profit margin and short on inventory and overhead is promising and will be the bike shop of tomorrow.”

Essentially this means smaller retail footprints with some service only bike shops, some showrooms only and some showrooms with service. Mobile service will be a component for some, but not all. Also, a bike shop retail brand could have a full service new wave bike shop with a larger footprint of perhaps 3,000 to 5,000 square feet in those neighbourhoods that have the demographics to support this version of the bike shop model of the future.

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Bianchi's new Italian showroom, as found on the world’s largest agricultural farm. Shoppers have access to a Bianchi cargo hauling fleet as part of their experience.

The same owner could very well operate one or more showrooms of 300 to 500 square feet in adjacent neighbourhoods with different demographics and also may have a mobile service component in all, or only some of the neighbourhoods served.

According to some retail analysts, including those that I work with, showrooms may be the logical next evolutionary step for retailing, in part because many consumers are already using stores as showrooms – something that many U.S. bike shops have reacted negatively to, and some still do.

However, there is no question that retail, including bike shop retailing, is going through a monumental transition period that has and will create and drive waves of disruption and change.

Showrooming in the bike shop channel of trade has been viewed and defined, incorrectly, as consumers coming into a bike shop and using a smart phone or other hand held technology to compare products with those offered by online retailers. The loudest voices in the bike shop channel of trade have advocated confronting ‘showroomers’ and asking them to leave.

In reality, showrooming and showroom retailing is using retail space to create a hands on consumer experience that allows touching and trying products and working with a retail consultant to create an individual bicycling solution. Orders are then placed for that solution, or individually customised product with the retailer online, for pick-up at the showroom location or delivery to the consumer’s home or workplace.

The showroom business model also changes and greatly diminishes the impact on individual retailers of two of the most financially burdensome factors making the current bike shop business model “a rotten investment”. According to Tom Demerly these are occupancy cost and inventory.

At the same time showrooms enhance the consumers’ retail shopping experience. Here is what Lara Ewen has to say about the showroom business model in writing for retaildrive.com in an April, 2017 article titled Why retailers are trying on showrooms as she quotes a partner in a retail consulting firm: “Showrooms are another step to better cater to consumer needs,” says Andres Mendoza-Pena, a partner at A.T. Kearney, told Retail Dive. He describes an apparel retail showroom as a place designed to allow customers to try and test products in their journey to transaction, and allow them to get to know the product better, with the understanding that the final purchase will take place online. “Consumers prefer to engage with brands online for research and transactions,” he said.

“But even when they transact online, two-thirds of the time they have used a store prior to or after the purchase.”

Ewen goes on to quote Lee Peterson, Executive VP of Brand, Strategy and Design at WD Partners, a customer experience company specialising in global food and retail brands based in Columbus, OH, as saying: "Where you used to have one 5,000 square foot store, you could maybe have three 500 square foot stores."

Also, as we found in our research, the concept of showrooming, according to the Retail Dive article, is likely to appeal more to some customers more than others. In referring to a recent consumer survey Lee Peterson’s company conducted, he found that younger customers were much more amenable to the experience than older ones.

“With 2,500 consumers in the U.S., we described a showroom store,” he says. “We consider a score of 40% something that’s worth testing. Overall, showroom scores were about 45% at ‘intent to purchase,’ and ‘appeal’ was a little lower. But when we separated out

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(( BIKE SHOP STRATEGY ))

“SHOPPING TODAY MAY NOT ALWAYS MEAN GOING TO A STORE AND LOOKING AT A VAST AMOUNT OF INVENTORY. IT CAN MEAN TRUSTING AN EXPERT TO PICK OUT A SELECTION OF ITEMS.”

Millennials, showrooms scored 55%, versus only 28% with Baby Boomers. Young people would want showroom stores, and would drive purchase.”

If bike shop retailers can make a showroom small enough, they might be able to open more doors and thereby reach new customers in underserved markets.

According to Peterson, as quoted in the Retail Dive article said “If a space has a low minimum efficient scale (MES), you could build lots of them,” he said. “So where you used to have one 5,000 square foot store, you could maybe have three 500 square foot stores. I don’t know what those economics look like. But when it’s all about inventory a big part of that is scale. In theory, you might end up with five 500 square foot stores, then you’re on every corner.”

For stores that can make the concept work, the article points out that there is a lot of money to be saved — and made. Ewen points particularly to the profitability of Bonobos, an e-commerce-driven apparel company headquartered in New York City that designs and sells men's clothing, which, according to the article, does an average of $3,000 per square foot in their showroom stores.

For contrast, according to the National Bicycle Dealers Association (NBDA) 2017 U.S. Specialty Retail Channel Study and Report – the average American bike shop generates $154.55 per square foot.

The kind of profit margin generated by Bonobos’ showroom stores is precisely what has been compelling some retailers to consider making the change to showrooms, or at least incorporating some showrooms in their retail store mix with their commerce enabled websites (also referred to as omni-channel).

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One of the retailers to not only consider, but actually try the showroom business model is Nordstrom’s.

On September 11, 2017 national public radio published an article on its website titled Nordstrom's New Concept: A Store That Doesn't Stock Clothes by Merrit Kennedy.

According to CNBC, Nordstrom is seen as a bright spot among American retailers. The company reported in August 2017 that second-quarter net sales were 3.5 percent higher than they were a year ago, and online sales also grew by 20 per cent.

With these impressive results, why would Nordstrom’s - a large, successful clothing retailer - want to try a showroom retail model that doesn’t even have any clothing in stock?

According to the article, Nordstrom thinks the streamlined experience, which they are calling Nordstrom Local, reflects the way many people want to shop today.

In the article, Nordstrom says customers will enter the store and find personal stylists or consultants in a central meeting space. Here they can talk, the stylists can ask questions and give fashion advice and shoppers can have a glass of beer or wine, juice or a cup of hot espresso.

The article goes on to describe the central meeting area as being surrounded by eight dressing rooms where shoppers can try on merchandise. The store will have on-site tailoring and alterations and provide for sameday pickup from online orders or same-day delivery.

Nordstrom says in the article that the new concept store is 3,000 square feet, or just 2 percent of the average size of its shopping-centre-anchored retail stores, and is designed to be a ‘neighbourhood hub.’

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Nordstrom’s concept store that opened for business 3 October

customer's time and we wanted to offer our best services in a convenient location to meet their shopping needs," Jensen said. "Finding new ways to engage with customers on their terms is more important to us now than ever."

Showroom retail hasn’t fully shown up as a trend in the bike shop channel of trade – yet, but there are some examples of this business model migrating into the bicycle business.

Public Bikes is a San Francisco based online brand that has some bike shop “partners” and some “showrooms” that are described as locations around the country where consumers can test ride and perhaps purchase and order a Public Bike.

Significantly, on 8 September 2017 Mike’s Bikes, a 12 location bike shop retail brand located in Northern California, announced that it had acquired Public Bikes. We will have to watch and observe this new business model that may or may not include some form of showroom, or bike shops without bikes.

Nordstrom Local is being presented and marketed as a time-saving option, at a time when shopping online is often seen as more convenient than entering bricksand-mortar stores.

"Shopping today may not always mean going to a store and looking at a vast amount of inventory," Shea Jensen, Nordstrom's senior vice president of customer experience, said in a recent article in The Wall Street Journal. "It can mean trusting an expert to pick out a selection of items."

"We know there are more and more demands on a

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New Dealers can register online.

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(( MANAGING FINANCE ))

FINANCE WORKSHOP #3: Promotion WITH over 850 cycle shops now part of the ACT’s Ride it away scheme, dealers are recognising in numbers the benefits of having a retail finance option available to help customers spread the cost.

However, simply being part of the scheme is not enough. Many retailers may still be failing to make the most of finance, using it solely as a tool to clinch a sale, or offering it only to customers who ask.

So, how do you effectively promote finance?

The retailers who have the most success with finance are, unsurprisingly, those who promote it. That doesn’t mean introducing it at the point of sale when it’s already too late for customers to go up a price point or add on other products, but instead making it clear that it’s available at every stage of the sale.

The ‘Ride it away’ brand was created by the ACT to give retail finance an instantly recognisable identity nationwide. With more consumers now finding their local retailer via the Ride it away website, it’s important that they are able to recognise the brand in your shop too.

All Ride it away retailers automatically benefit from a free listing on the Ride it away website. Visit www.rideitaway.co.uk to search for your shop and see how your listing looks. Most site visitors search not just by location but by brand too, so ensure your listing tells customers exactly which brands and products you stock. Need to update your listing? Simply log in to your ‘My ActSmart’ account and update your consumer promotion listing.

Being able to find your shop via the Ride it away website is key to driving customers in-store, but they also need to be made aware that finance is an option as soon as they walk through your door or visit your website.

An easy way to do this is through the ACT’s range of Ride it away point of sale (POS) marketing materials, designed to help deliver a consistent message to your customers whilst being visually attractive.

In-store POS The full range of in-store POS includes various sizes and shapes of window sticker to let customers know that they can get products on finance before they even walk in to the shop and in-store hanging banners to reinforce the message once they’re inside.

To make it obvious which of your products are on finance, Ride it away swing tags are available to attach to the bikes and have space to write exactly how much the bike would cost on finance. A tag showing that a bike is available for only £40 per month is much more appealing than one simply showing a purchase price of £600.

Online POS Whether you have an online shop or just a website, use this space to let your customers know that finance is available.

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If you sell online then treat finance the same way you would in-store and don’t wait for the customer to get to the checkout to introduce it as a payment option.

Download the range of online POS for free and let customers know they can spread the cost as soon as they land on your site.

If you don’t offer online sales, but you do have a website or social media pages, the simple message of “Finance Available” could be enough to gain customers' interest and send them instore to find out more.

Help customers calculate their monthly budget As well as a range of various sized banners to suit your website, there is also a Ride it away finance calculator that lets customers calculate their monthly budget. If you include the finance calculator on your website, it is more likely that the customer will end up spending more, as they can easily compare the monthly repayments on different priced products. The difference between a £900 product and a £1,100 product is just £15 per month!

What next?

• To download free web banners and the finance calculator visit myactsmart.biz/downloads • To view the full range of instore POS and to place an order visit actsmart.biz/pos • To update your Ride it away web listing with the brands you stock visit www.actsmart.biz/online-promotion ACT has undertaken rigorous examination to ensure that all Ride it away marketing initiatives conform to FCA regulations, so retailers can avoid the risk of prosecution.

For further information contact the ACT on 01273 427 700 or visit www.rideitaway.biz

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(( OPINION GENERATIONAL DIVIDE ))

BOMMERANGST: CYCLING ACROSS THE GENERATIONAL DIVIDE

I

t’s been easier for Boomers than for their children and grandchildren, in realms of employment, affordable housing, home mortgages and university tuition.

Whether you see the disparity as poor economic policies, a radical redefinition of the employment market or intergenerational theft, the secure social and economic infrastructure for Boomers stands in marked contrast with the declining security of subsequent generations.1 I have developed a strategy for helping my sons and daughters, and their offspring to bridge the gap, and it’s based on the bicycle. The philosophy involves spending more money on what really contributes to a high quality of life and less, or nothing, on what has a neutral effect or diminishes the value of being.

As it now stands, younger generations seem more likely to buy a bicycle used, online. I suggested to my son that the online bicycle lottery might end up costing him more, and he bought his bike from a local shop.

This strategy is applicable far beyond one’s own family.

ECONOMICS In advocating commuting by bicycle rather than using a car, consider a non-partisan source, Forbes Magazine: Duran Valdez, “The Costs and Savings of Bicycle Commuting” (June, 2011): …figuring in the cost of the bike, average maintenance, and equipment, I’ve had to spend about £829 to get through the year. If I’d gone cheap on the bike, this figure could be cut almost in half.

According to the AAA, the national average [car] cost per mile is 43p. So after putting a little fourth-grade maths to work, I figure my driving costs for the year would have been £1,570. This means I saved roughly £741, even with such high starting costs. Next year, my savings should be a little more than £1,491. Not bad!

The £1,491 figure for savings is the accurate one in the long run, and that only involves commuting.

If he used his bicycle as vacation transportation, the savings would grow. And if he chose not to have a car and rely on cycl0ing, walking and public transportation, it would add financial leverage. Amounts vary according to individual testimony. Writing on U.S. News Money, Chris Balish claims to have saved £89,500 in a 10-year carless period2, with the bicycle playing a major role in his transportation transformation.

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To tie in with CyclingIndustry.News’ push on industry advocacy, let us introduce you to Mark Cramer, our new correspondent on how the industry can engage the older generation. Here Cramer talks about a societal debt owed to tomorrow’s cyclists, as well as outlining some of the economics on why bike shops should be using net cost calculations to sell cycling for transport…

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HEALTH

Should the bike industry be doing more campaign work to give younger generations better facilities to cycle in early life?

1

https://cyclingindustry.news/follow-the-money-how-the-babyboomer-spend-could-make-or-break-your-sales/ https://money.usnews.com/money/personal-finance/savingbudget/articles/2017-02-14/how-to-save-money-by-ditching-your-car 3 https://www.cdc.gov/healthyschools/obesity/facts.htm 4 https://www.nrshealthcare.co.uk/articles/news/general/studyshows-baby-boomers-feel-healthier-millennials 5 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2937005/ 2

“Boomer angst” prompts me to try to make amends across the generation gap, but not just in the financial realm.

I have a grandson who lives in a sprawling car-dominated city where schools are generally beyond walking distance and car congestion is rampant around schools at drop-off and pick-up times. We Boomers walked or cycled to school and it hurts some of us to see today’s children deprived of such purposeful exercise.

According to the Centers for Disease Control, “the percentage of children with obesity in the United States has more than tripled since the 1970s. Today, about one in five school-aged children (ages 6–19) is classed obese”3.

“As recently as the 1970s, a majority of school kids walked or biked to school. Today, almost entirely because of sprawl, fewer than 15 percent do,” according to Kaid Benfield, “How Sprawl Makes Fighting Childhood Obesity So Much Harder” (CityLab, July 2013).

My grandson’s city boasts a comprehensive network of bike lanes, but they remain mostly empty. So I’ve begun communicating with the municipal officials, urging for a bike-to-school program, including an army of crossing guards to make it safe to cross some obscenely wide roads.

In the interest of public health, we should act on bridging the exercise gap. Millennials and Generation X are less exercise conscious than Boomers. Consider the research.

When asked how they would define their overall fitness, Baby Boomers came out top: 86% of this group described themselves as “average or above” in fitness, whereas 72% of Generation X and only 69% of Millennials gave the same answer.

Baby Boomers also spend more time exercising, with 43% stating that they exercise most days and 29% of these committing 6-10 hours on exercise weekly. This compares to 24% of people from Generation X saying they exercise most days and only 21% of Millennials; in fact, 45% of Millennials say that they spend only 0-1 hours exercising on a weekly basis!4 In my own case, a blood test following a three-month summer vacation of cycling an average of 150 kilometres per week (and eating French pastries and cheeses along the way) resulted in a drop in cholesterol from 200 to 171, with improvements in all related cholesterol indicators.

For reasons of public health, cities around the world are encouraging cycling in order to reduce air pollution, a result that would serve to enhance the transfer of health security across the generational divide.

The massive study, “Walking and Cycling to Health: a Comparative Analysis of City, State and International Data” showed “statistically significant relationships—in the expected direction—between walking, cycling, and health at the country, state, and city levels,” though authors Pucher, Buehler, Bassett and Dannenberg acknowledge their powerful correlations do not yet prove causality5.

In categories of both personal finance and pro-active health, Boomers can give back some of their advantages to newer generations by promoting cycling, beginning with their own families and extending into their communities.

This is why I shout “Help!”, asking the cycling industry to publicise cross-generational cycling: Boomers with their kids and grandchildren, as well as bike-to-school programs. I’m doing my part.

Contact Mark Cramer cramerjazz@gmail.com

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UPGRADE_CJ_Jan18.qxp_Layout 1 14/12/2017 14:11 Page 1

(( COMPANY PROFILE UPGRADE BIKES ))

UPGRADING UPGRADE

As we begin 2018, bike retail takes on an unfamiliar shape and one that quite simply must be compatible with the digital age. Noting dealer mutterings of needing consistently strong supply partners, Upgrade Bikes has been quietly investing in bolstering its team, building brands and shoring up connection to its customers…

Catch Upgrade at CoreBike from 21-23 January 2018 to see Lauf, Challenge, Pivot and many more, as well as meet the team in person.

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UPGRADE_CJ_Jan18.qxp_Layout 1 14/12/2017 14:12 Page 2

Contact UPGRADE BIKES Tel: 01403 711 611 www.upgradebikes.co.uk

D

epending on who you speak to and on what day, the dealer supplier relationship is at times fraught. At a time when retail is rapidly evolving, how businesses integrate and communicate with one another has been under the spotlight in recent times. At Upgrade Bikes that’s been noted and responded to with a number of under-the-radar investments designed to make this shop/supplier interaction a consistently more positive experience.

“The bike industry can be guilty of being slower than many others in meeting both retail and consumer expectation, we want to make sure everything’s up to speed,” said new-to-Upgrade recruit Mark Chan, a name many may recognise from his time at I-ride. “We’ve gone big on orders, or at least we thought we did on our newer brands. Dealer reaction says that they’re pleased they can be guaranteed stock despite excellent sell-through of our labels.”

It’s brand identity upon which Upgrade has built a platform, becoming a specialist of sorts in the booming gravel and cyclocross arena, among other segments.

“We have brands that sell through incredibly well and consistently,” says Chan. “There are many out there that lure on the promise of margin alone, but when you’ve a brand like Leyzne, for example, you’re almost guaranteed the sell-through to match.”

Chan is one of several new investments in staff that have quietly bolstered the team in the past year, bringing to the table his knowledge on a quite crucial aspect of the business, purchasing.

“We’ve had to hit the ground running with a handful of brand additions, most notably Challenge,” explains Upgrade’s marketing manager Rory Hitchens. “We’ve backed these brands heavily on stock, all while upgrading our IT in house in a move to go fully paperless shortly.

Everything’s now fully barcoded, meaning the warehouse staff are happier, more efficient and accurate. There’s also better communication via our couriers enabling dealers to better plan their deliveries.”

Reinforcing the infrastructure is all part of ensuring

Upgrade remains a firm favourite with stockists, explains Hitchens. “In a seismically shifting market one thing we have here is stability. I think at the present time a lot of dealers are asking whether their best interests are at heart and can I rely on my suppliers to help. In Upgrade’s case, we’re not going anywhere, the business is more stable than ever with a portfolio of growing brands – every single one is doing more business despite the industry’s problems.”

Having enjoyed several years around of 30% growth yearon-year, Upgrade wasn’t immune from the trade’s recent downturn, yet still turned a 7% increase in sales in 2016.

“Our common sense will ensure we can continue,” says Hitchens. “The combined experience of our now 33 staff, plus agents on the road, has helped us add strength and depth to enable improved knowledge at every level of the chain.”

Heading into CoreBike, Upgrade will introduce accounts to Lauf’s frame and fork development, first spotted at Eurobike. Adding a string to Upgrade’s already warrior like bow on the gravel front, the Icelandic brand gives shops an incredibly well thought out carbon option to compliment the Kinesis brand’s best-sellers.

“We’re in e-Bikes too now,” says Hitchens, referencing Pivot’s Shuttle. “Adam Dawson, a competitive Pivot rider who knows the product inside out, is the shop’s point of contact. He’s worked retail too, so understands what shop’s require from a brand. With the Mach 5.5 we’ve a best seller in the making. It’s much more capable than it looks and sits right in that sweet spot that will let riders make the jump to more aggressive riding.”

“WE’VE HAD TO HIT THE GROUND RUNNING WITH A HANDFUL OF BRAND ADDITIONS, MOST NOTABLY CHALLENGE.”

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(( SKILLS TRAINING ))

MONETISE SOCIAL MEDIA

THE NITTY-GRITTY STUFF WORDS: Jonathon Nunan, cycling industry consultant and director of Better Bike Business

I

n the last Trade Journal Better Bike Business director Jonathon Nunan introduced us to the basics of getting your business set and firing on social media. But how do you monetise your time and effort? Read on for a checklist of how to convert clicks to cash…

1. Spend most of your money and time on Facebook No other social media site is structured to, or as capable at generating sales, than Facebook. These days you can set up a Facebook shop. You can and should, use Facebook ads. Be sure to use the “Customer Audiences” and “Lookalike Audiences” tools, to help you target the most relevant followers. Periodically pay to ‘boost’ your Facebook posts as well for much bigger reach.

Offer special ‘follower’ only promos, discounts or money can’t buy invites – and then track the take up This is a great way to make followers feel special, but also the best way to get them to convert their following into actual cash. Using specific codes for each promotion and channel (site), will help you to see who reacted to what and where. This will in turn help you better plan your next promotion and grow sales.

Use video content: as long as it’s entertaining or informative.

Social media is a dark art and the algorithms that sit behind them are opaque and mystical. But one thing we do know for sure is that engaging content is king (and vice versa). No content is more engaging than good video content. Videos help to drive up

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your ranking, reach and response (as well as your SEO). Create how-to videos. Unveil new products on live stream. Film entertaining and endearing staff profiles. Record shop rides.

Just make sure it’s entertaining or informative, and ideally both.

Consider ‘Affiliate’ Marketing Affiliate marketing is basically paying other people or businesses, who have either a large or niche

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following, to promote your business or products; whether it be through direct reference, or by advertising space or links on their sites and feeds. Have you got a well-followed influencer in your area or circles who you would be willing to accept a commission or regular fee to promote your business? Worth considering.

Use #Hashtags - Especially on Twitter and Instagram Using hashtags (#) in your posts helps to either bind or signify your content to your pages, or to help attach other people, followers or organisations to your posts.

There is simply no better method or tool to help you do this than the humble hashtag.

Use 3-5 per post; primarily with your Twitter and Instagram posts. It will draw more eyeballs into your sphere and hopefully further down the funnel towards your products and services.

If you’re using Instagram (and you should) – Be fussy with your photos and your taglines As with store fit outs or merchandising, consumers are pretty well trained, if not spoilt with regard to their expectations on such things. The bar has raised, whether you like it or not. If you want to attract and retain a following, you have to hit the mark every time. The same goes for the images you post on Instagram. It is a visual medium at the end of the day.

Instagram followers are there for the pretty pictures and the emotional response that brings. If you don’t bring your A-game with regard to the quality and appeal of the pictures you post, you’re wasting your time. The same goes for the taglines you put

with your posts. If you can’t think of anything cool or witty to say with your post; ask someone who can.

Watermark your images Assuming firstly the images are yours, watermark them with your logo or business name. This will not only make your images look more professional, but it will help reinforce the brand connection with the content, which in turn helps to improve the engagement, retention and conversion. It also stops competitors ‘borrowing’ your images. Unless, of course, they want to help promote your business.

Sign up to LinkedIn ‘Sales Navigator’ for big game fishing LinkedIn is often described as ‘Facebook for business people’. It is primarily a B2B engagement, recruitment and communication tool. For most bike shops, LinkedIn is probably more useful for your relationships and engagement and for keeping track of suppliers, industry data, technology & trend developments, peers and competitors. But if you’re a store with aspirations of chasing business from other businesses, institutions or organisations, then LinkedIn is certainly the tool for you. Sign up to Sales Navigator so you can drill down and create very specific targets to gain access to, track and develop direct lines of communication with leads and opportunities.

Social media is part science, part numbers game and part ‘dark arts’.

While it shouldn’t be relied upon to replace the functions of your dedicated website or ecommerce platforms, it can be used very effectively as a sales funnel. But only if you take the time to understand the game, invest appropriately and use the right channels in the right way. We all want to be liked. But we like to pay the bills and grow our businesses even more.

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(( STORE PROFILE CYCLE REPUBLIC ))

JOURNEY PLANNERS There’s a lot of scepticism in the trade on the operations of “big business”. Indeed, you might think of Cycle Republic as a rival, but there’s something intriguing about MD Peter Kimberley’s claim to have built the business around the independent model. Is this just Halfords rebadged? We don’t think so, and here’s why (if you’re willing to read on) there might just be something to be learned…

T

hey say it pays to look outside of your own bubble once in a while to see how others do things.

There is the much wider picture; think industries beyond our own. Then there’s those often dismissed by independents: the retail chains within our bubble. But why would you take inspiration from retail chains outside of our industry and not from within?

In the case of this article, Cycle Republic has been operational since December 2014, opening first in Euston, London. As with Tredz, it is operated as a separate entity to parent Halfords and the chain has been quick to differentiate its offering to reflect a unique character under the stewardship of managing director Peter Kimberley. At this point we’ll confess to having, like many others, underestimated just how flexible and personal a now 18 store chain can be in thinking outside the box.

There’s no more eye-opening

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scenario than just how Cycle Republic has flipped on its head the concept of catering for the urban commuter, and not just its own customers.

“We’ve a promotion we run in our urban stores that gets people out of trouble in a big way. Whether they’re on a hire bike or their own bike, regardless of where they bought it, we’ll fix a puncture for free, charging only the tube cost. Customers are at their most vulnerable when they’re down and out with a puncture and few

will want to get their hands dirty on the way to work. This offer I think sticks with the customer and creates a bond,” explains Kimberley.

More impressive is just how much deeper the business has looked at customer needs, almost to the point where product sales seem an afterthought.

“There’s a quite severe lack of cycle parking in London,” says Kimberley, quite correctly. “For that reason we’re assessing whether there’s the need for a service here. Ensuring the commuter’s journey runs smoothly is as much our duty as selling them the gear to complete it. Showers in stores has been tossed around too for those cyclists without facilities at their workplaces. Our store managers are constantly exchanging ideas in the company’s WhatsApp group.”

Most impressive of all, when Cycle Republic do sell a bike, those customers who have shown concern

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(( STORE PROFILE CYCLE REPUBLIC ))

about their journey to and from work can benefit from another very personalised service.

“By appointment we offer customers an accompanied first ride of their route with one of our staff members showing the customer turnby-turn directions, prioritising the most efficient and safest routes.

Research shows that safety is a primary reason for people choosing not to cycle to work and that doesn’t stop once they’ve made the jump to buy a bike. That bike can either end up in the shed after one close pass, or we can invest our time into that customer to build their confidence for the longterm. Sure, that costs us man hours, but it’s an investment in creating new customers for the industry as a whole and that’s essential.”

When asked where the industry has the greatest scope for creating new business, Kimberley points to three segments that have traditionally been overlooked until very recently: women’s cycling, commuter cycling and electric bike custom.

While the trade has made steady progress on each segment, it has taken some flag waving.

“Getting the tube and bus user onto the bicycle; helping people understand that you can have fun going uphill on e-Bikes and doing

“WE’RE DOING A LOT MORE IN STORE IN TERMS OF DIVERSIFYING OUR SOCIAL OFFERING.”

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more in store to accommodate half of our market has been crucial for developing our urban customer base,” explains Kimberley. “We’re doing a lot more in store in terms of diversifying our social offering. We had a yoga session on the shop floor at Lime Street recently and we’re working with the Breeze Champions to deliver more women’s-specific content. You’ll also notice us at events like Velo Birmingham in force.

We were the mechanical partner this year, with 20 staff and eight cars out.

We saved one chap’s ride who had a top tube crack, handing him a spare bike. He was able to complete the event as a result and again, helping people when they’re most vulnerable really sticks in their mind when it comes to customer service.”

Maybe it’s the roadside rescue, or perhaps it’s a heavily invested in store experience, but Cycle Republic has now found itself commanding what it says are the UK’s best Google reviews.

That claim’s hard to gauge without a deep study, but the worst we found was a 4.3 rating out of 5 of all branches. What’s more, when a bad review lands, the manager responds, every time, we’re told.

Stores are designed in such a way that customer interaction and convenience is prioritised. In the Lime

Street branch, for example, the ground floor acts simply as a repairs drop off point, enabling morning commuters to quickly hand over their steed without having to navigate shop floor stock. With a demographic of busy office-based commuters to cater for, mobile mechanics too is an outreach of Halfords.

“We’re assessing a cargo-bike model to take the workshop to business’doorsteps,” says Kimberley. “This is an entirely customer-driven development, but one that has the backing of a lot of city firms who are actively looking to up cycle to work numbers. We’re actually in discussions to open dedicated workshops in some of the city’s larger employer’s buildings.”

Advocating the active travel lifestyle, Kimberley speaks of local authorities that have approached the business for ideas on developing cycling levels. Surprisingly, he actively recommends developing city bike hire schemes.

“More bums on seats is our philosophy,” he concludes. “For those customers who haven’t considered cycling for transport, it’s crucial the trade gets bums on seats by any means. We have been and remain active in raising cycling’s place in ever-congested spaces. It’s the industry’s responsibility to push the case.”

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PROFILE_Velosport_CJ_Jan18.qxp 18/12/2017 11:54 Page 1

(( STORE PROFILE VELOSPORT ))

TRY BEFORE YOU BUY...

T

here are certain strengths the independent bricks and mortar bicycle retailer will always have.

No matter what’s deemed to be the next big threat to the traditional model, there is, for a still substantial chunk of customers, nothing quite like expert advice, squeezing brake levers and putting yourself in the saddle that may soon accompany you for hundreds of miles every month.

So, what happens when a business plays to these strengths to extreme levels? There’s perhaps few examples quite like Steve James’ Velosport, the only bike shop we know that has a ‘free sock drawer’ for those customers giving serious thought to getting on board with X-Socks.

Of course few bike shops survive on customer generosity, so what’s the secret to the formula?

“It’s all about engaging the highquality customer like no other,” explains David Hemming, the country manager for X-Bionic. “The store here is quite unique in that it’s a brand shop

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for a lot of high-tech performance labels – a proper destination store for the brands that are represented where you are actively encouraged to try before you buy.”

The store of today is in part down to an investor, as well as X-bionic’s input, with a full refit carried out just a few years ago. As part of the revamp, the store now boasts an immensely clean and inviting aesthetic, changing rooms and a new storefront that better allowed people to look in.

Typically X-Bionic’s brand stores, found dotted in eight European locations, carry nothing but the Italian manufacturer’s product. So, why is the UK different and why was Velosport chosen over one of London’s A-list shopping streets, as seen elsewhere?

“I wanted to create a full on test environment and that more than likely wouldn’t work as well on Oxford Street, our demographic wants better access to great cycling, so being that much closer to the Surrey Hills made more sense,” explains Hemming. “This is a

place where you can have £600 worth of X-Bionic gear to try out as a complimentary extra to the bike demo. The same applies with Bollé, Limar, Reynolds and many more brands in store. When a customer can demo the complete package and is contemplating spending anywhere in the region of £10,000 then you need to sell them the entire journey and on their own turf.”

It’s a formula that Hemming says is yet to draw in a broad demographic, but those it does capture prove particularly effective in conversion. At a recent demo event eight customers spent £3,900 simply on the back of short trials, we’re told. Despite the south-westerly base, a lot of Velosport’s marketing is targeted at the Square Mile and in 2018 the store is to run an event alongside a charity to further build its brand with that affluent potential customer base.

“Sport cycling is the only sport that rivals golf for retail opportunity,” says Hemming. “You may not need it, but if you can afford it, you want it. For those

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(( STORE PROFILE VELOSPORT ))

with aspirations to get fit, we can write training plans and refer people to the Putney Sports Clinic to enable customers to get the most out of both their training and their bike fit. For that customer, we take a very scientific approach and leave no stone unturned.”

Soon to be a destination store for Ritchie in London, VeloSport will add another string to its bow. Claiming to sell more TT bikes that any other store in London, as well as acting as a shop window for Trerè Innovation’s brand portfolio – for which Hemming is the global marketing and sales head – it’s unsurprising to see that Velosport’s Google presence places equal weight on the shop’s bike fitting business.

“When you’ve a brand like Titici, which delivers an eight-week turnaround of custom-made and painted carbon fibre bikes, then bike fitting is important. With relatively little marketing we fit anywhere up to 18 people a week in summer and a dozen in winter,” says Hemming, himself a qualified Retul fitter and coach. At £200 a pop for the top-tier fit, that’s not bad business.

Broadening a company’s reach, says Hemming, is crucial in a fast evolving web era. For this reason the store is soon to embrace Bike Exchange sales, will invest in more targeted database marketing and continue to keep its online presence in tip-top shape.

“Being a destination online is important too,” advocates Hemming with both his retail and brand caps on. “With X-Bionic I’m occasionally tasked with justifying the brand’s presence on Amazon. Quite simply, it extends the brand’s reach and benefits everyone committed. 50% may buy there-andthen, but the other 50% will look to try an investment like X-Bionic gear in person in stores like ours that specialise in delivering the complete package. I tend to offer stockists a 90-

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“A SUSTAINABLE RATE OF GROWTH IS INFLATION +1% AND WE’VE STUCK AS CLOSELY TO THAT AS POSSIBLE.”

day return policy whereby if there’s no increase in sales I’ll take the product back. Niche products like X-Bionic will always sell if you are attractive to the right customer. It’s like the NikeTown concept, you need to have a very big window to drive a brand’s full potential in today’s market.”

With that in mind, Hemming reinforces the message that a wellpresented website will be critical to the bike retailer going forwards.

“There’s a lot of UK dealers shipping to Europe all of a sudden.” And why not, he asks? “X-Bionic is built for the long term. Our stockists saw a small increase in intake margins recently, but in my view it’s justified as the product’s not everywhere. We’ve managed the growth, kept things tight and sustainable, while other brands have blown up overnight, then fallen by the wayside. A sustainable rate of growth is inflation +1% and we’ve stuck as closely to that as possible. That guarantees we have a reliable offering for partners for the long-run.”

When it comes to running the retail business, VeloSport’s method is to finetune its sales methods in order that it can wisely predict an appropriate stock holding and maintain good cash flow.

“We only stock what we can sell,” adds Hemming, “never stuff we’ll have to get rid of. That helps the customer journey as they’ll never leave with something they don’t need and that has seen people place good faith in our service. We’re careful to educate the consumer and upsell only when it’s sensible. £15 a month on Yellow Jersey insurance on a £10k bike purchase, for example. We see a lot of frame replacements on online bought builds, so that’s often worth talking about. It’s all too easy to get sucked into a false economy with sub-standard goods in the cycling world, so stores must take time to bring the customer round.”

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PROFILE_Fully_CJ_Jan18.qxp 14/12/2017 13:07 Page 1

(( STORE PROFILE FULLY CHARGED ))

BETTER TOGETHER A theme running throughout this Journal is how to grow the industry’s overall ridership, something perhaps best exemplified by Fully Charged owner Ben Jaconelli’s approach to business. Read on to find out about demos on the river, as well as partnership opportunities with your store

I

t was presentation alone that drew us to Fully Charged’s dual floor 2,400 square foot store. Having seen some incredible photos of the Bermondsey Street branch, our initial plan was to visit the business simply to scope out some visual merchandising inspiration. The underlying message to this somewhat personal start to an article; don’t underestimate the value of high resolution, bright and inviting photography when advertising your business. It may be expensive, but the science is there supporting the notion that shoppers very quickly make a decision on

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Fully Charged founder Ben Jaconelli

whether to engage a business based on the very first visual impressions.

For us at CI.N, (and we’ve visited a few hundred bike shops in our time) Fully Charged was irresistible.

“IT’S ALL OVER THE MINTEL REPORTS, E-BIKE GROWTH IS COMING, BUT WE’RE STILL SO FAR BEHIND MAINLAND EUROPE.”

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Owner Ben Jaconelli knows this too.

Never before have we seen a workforce mobilised in such force to get a bustling bike shop ready for our admittedly unskilled photographer.

This, it turns out, was just part and parcel of ensuring everyone who comes through the door leaves having received a very personalised service.

Jaconelli is, like all good managers, careful with his team’s time investment.

“We only service bikes bought here,” he says. “Unfortunately, one of the downsides of being an electric bike specialist is the hangover that exists to this day of poor quality imports stemming back a decade or so. For that reason we’ve only ever carried brands that speak for themselves in quality, never anything dubious in origin.”

For this reason, Fully Charged has become a destination for a number of

brands that you’ll not find elsewhere in London, namely Moustache and Coboc, brands that were primarily handpicked on engineering and functionality merits.

A former automotive industry man, Jaconelli says that he left in order to join a business that is “of benefit to people’s lives”, citing an incoming “new age of transport” as a driver for his switch from four to two-wheeled trade.

Like so many others, it was slinging a leg over an e-Bike for the first time that sold the concept and determined the direction of the business.

“It’s all over the Mintel reports, eBike growth is coming, but we’re still so far behind mainland Europe at the moment in terms of sales and getting bums on saddles for tryouts,” he explains. “It’s the same with cars, hotels, most design-led industries, the

UK is playing catch up. The signs are ubiquitous, though. Moustache had to push their 2018 production forward as 2017 demand was so much greater than expected.”

It’s an acknowledgement that the UK has a severe lack of year-round demos at which electric bikes can be trialled that has sparked a rather unique idea to draw entirely new customers.

“Our business has just received fresh investment, which will go toward some ideas we’ve been developing. One of which is the purchase of the Fully Charged Barge – a floating demo that’ll cover the canals spanning Little Venice to Regents Park. Naturally, it’ll be electric. It should prove a high-engagement project and we’ll have a live webcam focused on what we anticipate should be between 50 to 100 demos per day.”

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(( STORE PROFILE FULLY CHARGED ))

From barges back to bricks, Fully Charged is assessing using its new investment to add two new physical branches, taking aim at South West London and somewhere in the vicinity of the Olympic Park. It is anticipated that, as a result, the present team will grow from eight to 20 during 2018, with digital specialists a key ingredient to growing the firm’s average of five online e-Bike sales a week into something larger.

“Crucial to our online presence will be a booking system. If you’re dropping a grand or more then a tryout is normally important. You might have spotted our photo and film studio downstairs too, which will assist us in developing our own content to keep our rankings high and customers engaged.”

With an average sale price of £2,500 and a trend among city workers toward folding bikes averaging £1,100, Fully Charged is enjoying the fruits of a long-standing commitment to the sector. Averaging between five and ten test rides a day during the week and

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as many as 20 on weekends, Jaconelli’s early commitment to the sector is paying off to the point where he’s now looking to help the rest of the industry develop the bigger picture.

“We’ve a joint venture running with Peaslake’s Pedal & Spoke whereby four of our e-Bikes will be present there at all times for demos and our customers can even click and collect via Howard’s business, if they’re local. That’s something I’d like to extend to other bike dealers. If you’ve not got the funds in place to get a decent fleet of e-Bikes in, but want to make sure customers have the opportunity to try some out, Fully Charged can help,” offers Jaconelli.

One of the other benefits of having been an early adopter of the e-exclusive model is knowing first-hand what sells and what’s dead weight in your area. In recent times Fully Charged has been brutal in moving its dogs along, consolidating its range by more than half to a streamlined portfolio of 75 of the best-selling models. With that analysis undertaken, Jaconelli has

pledged to have stock of these bikes at all times with no exceptions. With space made at the firm’s two locations for strong stock holding, Fully Charged is now offering same day delivery or collection inside London and next day delivery outside of the capital.

“We’re not really targeting the cyclist, more the tube user. The constant strikes are excellent marketing for bicycles. It’s part of our mission statement to educate people on cycling as a transport form. In fact, I consider electric bikes to be a gateway to pedal powered cycling in some cases, but introducing bikes as transport is crucial.

Business can be erratic at times, but then again some days we can sell up to ten bikes, as our customers aren’t necessarily cyclists to begin with. It’s hard to pinpoint a peak time, but January’s always popular, which I guess the rest of the industry doesn’t see. New Year’s resolutions and easing into cycling go hand-in-hand,” concludes Jaconelli.

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(( PROFILE SIGMA SPORT ))

CLICKS & MORTAR Sigma’s backstory is a familiar one in the bike trade; frustrated with poor service two riders go it alone. Now a goliath in the business, co-founder Ian Whittingham gives us the scoop on the firm’s present day ambitions…

F

ormerly an office block, Sigma’s near purpose-built Hampton Wick branch is undoubtedly one of the UK’s most sought after floor spaces for suppliers and certainly one that is looked upon with admiration. At 9,000 square feet and covering three floors, the old building literally had its face removed to make way for the glass frontage that blesses the shop with incredible natural light.

It’s a recipe that makes for a visually stimulating journey through the store and one which co-founder Ian Whittingham says his team are unlikely to replicate in further store openings in the future.

“We’re actually undergoing a deep refit in 2018,” he told CI.N. “But we won’t be taking this recipe elsewhere in the near future, this is the flagship branch and it’s done incredibly well at becoming a destination for road cyclists, not just from around the local lanes, but from around the globe. Having the train station opposite, we’ve very often had customers fly in from abroad, pick up a bike, some kit and fly back home.”

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Such is the lure of brand Sigma that customers will travel for the experience. Given the shop’s immense size, Whittingham says the business can buck trends. One thing that’s notable given the general reduction across many retail businesses in clothing stocks is the depth carried for men, women and triathletes on sale. This is an entirely deliberate ploy to soak up the shrinking segment’s trade, with Sigma becoming a destination for stock both in store and online.

It’s online where Sigma sees its growth, with over two thirds of the firm’s trade already handled digitally.

Whittingham explains: “When we originally obtained investment to develop our bricks and mortar presence around eight years back we begun laying the foundations of the store, but found that, even in a short window of time, online was seeing a rapid gain in momentum and importance. At the time we didn’t even have a functional transactional website, so from the moment our doors opened in Hampton Wick we shifted our energy

to quickly establishing an online presence. At the time Wiggle really surprised everyone with the rate of their growth and we quickly realised we had to move with the market. That said, we’ve no ambitions to become Wiggle, I think for us that would be an unsustainable approach and I much prefer working with a curated platform of brands with which we can deliver strong value for everyone. The race to the bottom is certainly not for us.”

The investment in digital is comprehensive and future proofs against shopping trends that are fast emerging. A data-rich business, Sigma is investing in everything from live and social chat online, right through to segmenting its email communications so customers only receive messages relevant to their interests.

When it comes to things like clothing sales, a surprising chunk is soaked up online where fast and generous customer service pay dividends. Free returns are a given, keeping the firm’s growing dispatch team on its toes and aligning Sigma with the service deliv-

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ered from much larger businesses.

Meanwhile, bike sales remain a bricks and mortar purchase for the most part. With two bike fitting stations in store and potentially a third soon, Sigma has become a destination for road cyclists looking not only to purchase the bike, but the complete experience. It’s for this reason that the refit will build in a bigger events and social space, vying to keep customers engaged with the store for longer.

“This potentially means we’ll host more events to bring our customers in store. The coffee area may become more than just a help yourself machine. Customer needs are changing and we need to surprise, delight and entice people on every visit. Why else will they come?” asks Whittingham. “We have built a bit of a reputation here already, hosting meet, greet and rides with the likes of Frank Shleck, as well as the Zwift Tour. I’d say once a month we have a significant in store event, while we host regular shop rides, evening gravel rides, women’s sessions and

over 50s rides, among other events.”

Outside of the store, the business has been a long-term partner of cycling events company Hotchillee, a business dedicated to “bucket list rides”, as well as mass participation organiser Human Race, an organiser of over 55 events annually.

“It’s 50/50 whether a customer will know our brand when we pitch up with a small presence at these events,” says Whittingham, “so we also branch further afield. The Dragon Ride in Wales, for example, is another we like to be visible at in order to grow brand Sigma.”

While on the tour of the shop we run into a top floor customer training session in a private workshop.

Increasing in to the winter months, Sigma offers customers the chance to hone their skills in store for a small fee, padding out the shop’s bottom line during the darker months. The firm’s 80 full-time staff too are rotated through fresh training through the colder months ensuring the business stays on top of its game.

“Though some common sense

appears to be returning to the market and indeed brands are once again recognising that they have to be an investible proposition for the dealer, the last few years have been, nonetheless, tough for the bike retail world.

We’re very often competing directly with great brands like Rapha and Canyon for sales, so you must shine to secure the customer’s attention and innovate in the way you have them engage with your business. Experience is key and that applies online too, so there’s been a lot of investment in personalisation and artificial intelligence. Selling a bike online can be equally as rewarding, in my opinion,” says Whittingham.

When it comes to sales trends, Sigma has noted a significant uptick in territories outside of the traditional sale, most notably in the gravel segment. Outside of bikes, Whittingham says that his admittedly committed and often affluent clientele are buying into the gear they’re increasingly aware of their pro counterparts using. As such, investment in smart turbo trainers and powermeters has increased significantly. But there are other demographics emerging as an offshoot to the typical roadie, we’re told. “e-Road I think will show its legs in time and I actually anticipate we’ll have a period where stock may be hard to come by in the early days. Electric bikes are a big leveller for the club rider that can’t keep pace in the hills, but still wants to enjoy the social aspect. We actually had two electric bike stores close nearby to us. I consider that they were a touch ahead of their time. We actually have an office electric bike for staff to use for quick lunch errands ourselves,” admits Whittingham.

Then there’s Sigma’s triathlon offering for which the store remains a destination for many athletes in the south. Though a flat market at the present time, no less effort is placed into merchandising a corner of the store to enable customers to get fitted with the right wetsuits and gear. Much like Sigma’s clothing trade, Whittingham recognises the importance of a bricks and mortar commitment here.

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ask the boss

PETER NISBET, MANAGING DIRECTOR, WINDWAVE UK

At the front of every magazine we’ve retail opinion, but what about the distributor’s take on the market? This month we place Windwave’s boss in the hot seat to talk current affairs…

Peter Nisbet third from the left Recently we’ve seen new money coming into the industry from known and unfamiliar sources. Is this necessarily a bad thing and do you foresee pricing stability or more turbulence ahead?

It is very interesting to see VC type companies buying bike shops and distributors. They must see some potential, although market conditions are difficult at present. I imagine they must see scalability as a way of growing their investment, but I wouldn’t see this as quick or easy profit.

In relation to pricing I do not see this as an issue because currently margin has to be maximised.

With cities around the globe adjusting the priority given to transport modes, to what extent should the industry be enhancing its voice to put cycling higher on the political agenda?

It is really important for the Industry to add its support to lobbying government. We lag behind other European countries when it comes to safer cycling for transport and leisure.

There is no doubt that more people commute these days, but there’s just not enough safe segregated cycling infrastructure. Travelling regularly around the UK I notice that new road schemes are built and the vast majority without any concession to cycling.

We are a long way from where we

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would need to be to see real growth in commuting, safety is crucial.

With your perspective and given Windwave’s diverse portfolio, what segments of the market present an opportunity and how can dealers maximise the potential?

Strategically it’s important for us to cover both road and mountain biking.

We are looking very seriously at commuting and e-Bikes too. Colnago has shown over the past couple of years a distinct increase in sales of our high-end models, especially the C-60.

My view is that many of the new cyclists have enjoyed the sport and are now trading up. Many of these new cyclists are buying the disc and electronic versions of these frames showing they embrace new technology.

We’ve seen fantastic growth with Transition too, with riders progressing from mainstream brands to something more niche. We have also seen road riders increasingly moving into MTB. Modern shops have to entice customers across the threshold. Free bike fitting, if a bike is bought in store, is a definite attraction. Fast efficient repairs and service also brings customers. Once they’re in store there is a good chance they will buy something. It is an old cliché, but it is really important to project the right image and shops must be kept clean, tidy and welcoming. Window displays must be

changed regularly and reflect seasonality. Shop rides create a club atmosphere and bring loyalty.

The UK is on course to see one of its sharpest declines in bike imports in well over a decade. Is this cause for alarm, or simply the market adjusting to appropriate levels?

It is a concern that bike imports and sales have reduced. There has definitely been an oversupply, especially of large mainstream brands. In this environment I am very happy our exposure is minimal and we are able to change direction quickly.

As a founding member of the Core Group, what are your thoughts on what the trade show of the future will need to deliver?

Core has always promoted itself as a ‘house show’ rather than the traditional trade show. The aim is to provide a comfortable environment to mix business and pleasure. Interestingly, following input from overseas visitors to Core there are now a couple of other shows run on the same lines. Honestly, I don’t think there will ever be a central trade show again as many companies prefer to have house shows, or attend smaller events. This, I accept, may not be ideal for the shops as it means more time away. We have also seen at Eurobike that many of the big players no longer attend, preferring to run their own events.

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