CIN issue 002 2018

ISSUE 002 // 2018

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from the editor

Mark Sutton @CyclingIndustry @MarkSuttonBike

TIME IS LITERALLY MONEY ONE of the joys of what is, let’s be honest, an increasingly difficult to manage winter trade show calendar, is the social element with others in the bike business. Against a tide of depressing news, one silver lining is seeing those in the cycling trade become a little more extroverted as we bang heads together in an attempt to work out the path forwards.

In this issue we’ll continue to present ideas and alternate ways of thinking, but I wanted to begin with one idea that has particularly interested me while chatting with shop owners over the winter. It’s the notion that perhaps we’re doing it all wrong: the thought that perhaps shop owners should be charging brands to be present in their destination store.

Sure, that’s going to be a while before taking off, but it’s an interesting discussion all the same. If you, the retailer, have spent countless years building a shop that attracts high footfall in a destination that’s perfect for demo rides and in-store socials – then why not?

In fact, I’m reliably informed it may already be happening in certain iconic destinations.

Brands in the grocery sector understand the odds of their product being picked ahead of competitors if merchandised in a preferential way. Next time you’re at the supermarket, have a look at what jumps out and consider why. What’s on the end of the isle? What’s at eye level?

In his CI.N Seminar at The Bike Place Show, HighStreetMentor’s Mark O’Dolan presented an interesting floorplan of what he deemed to be a bike shop that sells product whether the staff are firing on all cylinders or not. Central to the idea was to ensure as much visibility is given to focal points from the moment a customer walks in. Standing on your doormat, does anything obscure the presentations you are trying to draw attention to? Does the store’s merchandising begin with ground-level presentations and build to eye line merchandising toward the rear and sides?

As discussed later in this issue, there is a new generation of ideas emerging for generating sales and in many cases, making your proposition a much more relevant one than can be found online. The catch? You can’t be afraid to charge for your time and expertise. Should a customer wish to come in and try a top-end road shoe, are you willing to charge for a fitting session if they choose to walk away with the measurement in hand?

Of course fitting services can be included in the sale, should you secure it. This value added impression upon the customer gives you good reason to stick to your guns when charging full retail price. Taking all of the stock risk without monetising your time is no longer an option for the independent.

So looping back on the original point, why shouldn’t quality, trained, well merchandised and high footfall destination stores be charging rent for preferential space in store or within demo fleets? As rents continue to soar, profit per square foot of your store is crucial, so you’ve every right to do the unthinkable and stop selling bikes in favour of more high-net return lines and service. Am I advocating that? No. Personally, I suspect the demographic that prefers to demo a bike and talk to a human before purchase still exists. However, purely from a business point of view, selling bikes takes significant time, resources, space and investment. Proven destinations committed to that should be cherished and rewarded by brands.

mark@cyclingindustry.news www.cyclingindustry.news

ISSUE 002 // 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

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the professionals BREXIT: IS IT BEING FELT AT RETAIL? Brexit’s effects are steadily filtering through the cycling industry, despite the UK not formally exiting until 29 March 2019. With negotiations seemingly not going quite to plan and the term ‘uncertainty’ appearing in every other headline, we ask retailers’ feelings on the story so far…

Steve Baskerville Bike Spanner

1. By what percentage on average have you seen price fluctuation from suppliers to date since the referendum?

Steve Baskerville, Bike Spanner It’s substantial. Increases of 20% to 30% are not unusual and it’s continuing. Prices are still slowly ticking upwards, with no obvious reason, other than sweating what business they have for more profit.

Paul Thrupp, Cycling 2000 It’s difficult to put a figure on, but it’s fair to say that many products have gone up in price since the referendum, both bikes and accessories. In each case most suppliers are blaming the exchange rate and Brexit. What is difficult to understand is that if you look at exchange rates between Sterling and the Euro/Dollar over the past 10 years there is not that much difference.

We do have three bike and tyre suppliers whose prices have gone

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Paul Thrupp Cycling 2000

Richard Sault Salt Dog Cycling

down by as much as 10% in the last few weeks. I don’t believe any price increases will harm business too much as long as all retail sectors at treated fairly by suppliers, whether it’s the IBD, internet or larger retailers.

The most important thing is that the IBD continues to be competitive in a changing market.

Richard Sault, Salt Dog Cycling Since the referendum in 2016 we’ve seen prices increase by around 20% both at trade and retail price.

Ruth Hargreaves, JD Tandems My suppliers have increased their prices by around 10%. Most of our purchases come in from the Far East and these have been affected by the fluctuations in exchange rates.

2. In the longer term, what impact do you anticipate new trading conditions with the UK to have on independent retail businesses?

Ruth Hargreaves JD Tandems

Steve Baskerville, Bike Spanner The biggest impact I think will be suppliers looking to the small business for profit. The big players are now at the point where they are far more powerful than the suppliers, and the suppliers know it. Suppliers have to keep them onside for turnover, but will squeeze the small business for the profit. Essentially small business will be subsidising big business, and so, perversely, financing their own executions.

It’s perhaps all about perception.

Things are still on a downward trend I’d say, but as a workshop business we’re better acclimatised to it, and in some cases prepared for it. So, while it will get worse, it’ll feel much the same, or even a bit better. As a business we saw 20% and above growth as we entered our second year last year. We are planning for that to continue and even improve some more this year. While the growth came naturally last year, this year we’re going to have to work harder and smarter to realise it.

Paul Thrupp, Cycling 2000 It’s too early to say what the long-term impact will be as I don’t think anyone truly understands what the new trading rules will be yet. The unknown is perhaps doing more damage than the actual changes. My biggest concern is the loss of EU workers who make a huge contribution to our local economy, regularly use a bicycle to commute to work in our local area and to whom their bike is a valuable mode of transport.

Richard Sault, Salt Dog Cycling Profit margins will tighten even further and costs will rise making it tougher, but at the same time it should slow down the heavy discounters. It’s just not sustainable for anyone; even finance companies. I think there will be a move towards keeping less and less stock and relying more on suppliers.

Stand out service and serving niche markets may be the only way to survive.

I think with this tougher market it will drive the evolution of the bike shop and what people class as a bike shop. All over the UK I expect we’ll see variation of online, man in a van, showroom, coffee shop and other models.

Ruth Hargreaves, JD Tandems The average retail business trades on the high street so there would be no reason why different trading conditions would affect them. We, however,

well priced, high quality and with good ranges.

retail both in the UK and Europe, so I foresee our exit from the EU to have a negative impact on our sales in Europe. Our customers are individuals and the prospect for them of having to deal with a business outside the EU is daunting.

Ruth Hargreaves, JD Tandems No, the vast majority of products we sell are sourced from the Far East and that has not changed.

3. Has the referendum influenced your sourcing of goods, perhaps toward the introduction of more UK made goods?

4. Have you seen, or do you anticipate a change in consumer spending habits as a result of any of the factors associated with Brexit?

Steve Baskerville, Bike Spanner Swap to UK made goods… do they exist in good numbers? Our sourcing of non-core goods has changed, though we buy more from other retailers. You pay a little bit more, (sometimes less) but the goods arrive quicker, with no minimum order value and it’s all payment upfront, so less accounting work.

Steve Baskerville, Bike Spanner Are people spending less? I’m not sure. Are they being more careful when they spend? Hell yes. We noticed a big shift in spending habits during the last quarter of 2017. Previously it was a case of pricing a job and getting an almost instant approval, even on the tasks we’d listed as advisable but not essential. Now we are asked more and more ‘do I really need XYZ done?’

Ultimately people are still spending, but every penny now needs to be justified.

Our Christmas pop up Muc-Off shop was a great example of this. During Christmas of 2016 there was little to no thinking involved in a purchase.

People were buying two, maybe three gift packs at a time, without hesitation.

Christmas 2017 was different. We had to work hard for every sale we got. We still saw good sales growth year-onyear, but it was much harder come by.

Paul Thrupp, Cycling 2000 Not at this stage, but long-term our pricing and trading agreements with suppliers, as well as availability, may change where we source product.

Richard Sault, Salt Dog Cycling As more of a bike accessories shop, not really. Looking around the trade shows and talking within the industry I think, bike-wise at least, UK designed brands like Forme and Orro have really upped their game. Each is really

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the professionals BREXIT: IS IT BEING FELT AT RETAIL? Paul Thrupp, Cycling 2000 No, I don’t see any change to consumer spending habits, but do believe that long-term Brexit may prove overall to be a good decision for the UK. Richard Sault, Salt Dog Cycling The uncertainty and worry running up to and around Brexit slowed sales, but as soon as a decision was made and people felt a bit more stable sales have grown. It has still been a bit bumpy. I think people’s concerns and worries about spending have been hugely driven by the media as soon as it stopped getting mentioned quite as much in the news people started spending. Going forward the main concern is stability of the pound and the market.

Ruth Hargreaves, JD Tandems The uncertainty surrounding Brexit and the UK economy is creating a more cautious approach to spending. A lot of our customers are of an age whereby they are financially secure and spending a couple of grand is not significant. Despite this, I am detecting a more conservative approach to spending. Pre referendum we were experiencing higher growth than post referendum. Sales on interest free credit have increased, indicating that my customers are more inclined to keep hold of their cash.

WHAT IS THE IMPORTER’S TAKE ON ANY PROS AND CONS? Colin Williams, MD at FLi Distribution paying the VAT, duty and handling I think it’s safe to say we’re all now fees up front before the goods are importers in some form. Whether released. Added to this, there may you’re a bike shop, a distributor, or be associated delays, as things have even an end consumer, chances are to pass through customs at the you’re buying products from else- new border. where within the EU. We had a quick Worst case, this could mean that think in the office and the number of the current agency business model used by a lot of brands cycle brands supplied ceases to be viable and direct to UK shops from the EU is a lot longer “WORST CASE, they have to move back to having UK-based than even we’d realised, THIS COULD so most readers of this distributors with the title will now be associated impact costs MEAN THE importers. for everyone in the chain.

Our primary role at AGENCY MODEL supply As a business owner FLi is currently working I’ve spent a lot of time as KTM’s UK CEASES TO BE agency. The bikes and looking at the potential VIABLE.” all P&A are shipped impacts of all the differfrom the factory in ent shades of Brexit being discussed and Austria direct to retailers in the UK. If we assume that there do appear to be a lot of potential Brexit means Brexit, means hard challenges to a UK cycle industry that Brexit, and we’re going to leave the is so heavily dependent on EU-based Customs Union and Single Market (by brands and assembly lines. However, the time this gets read things could the list of pros and cons is very hard have changed) then this means that to pin down to anything meaningful all our dealers could potentially have while we currently have no idea what to handle the import, which means Brexit will look like.

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

Contact mark@ @cyclingindustry.n news to register your thoughts.

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(( MARKET RESEARCH ))

HERE COME THE iBRAINS… Gathering robust data on the bike market has been a challenge for everyone involved in the industry for many years.

Paul Mitchell, GfK’s Client Insight Director for cycling, talks to CI.N about ongoing work to change the picture…

U

nderstanding what’s happening in the UK cycling market has long been a goal of industry organisations, trade bodies and magazine editors alike, but it’s generally accepted that we sail fairly blindly on what, at the present time, are choppy waters.

Many have tried to bang heads together in an effort to pool anonymous data from the market’s main players, but prior to the digitalisation of much of the industry, little meaningful fruit has been borne.

That now stands to change as the bike trade gets tech savvy and begins to digitally talk to each other through clever point of sale systems and stock tracking. Gathering point of sale data from any willing UK bike retailers, including some of the market’s giants, GfK is one source getting to grips with sales and shopping trends, presenting data-driven insight to back the endless stream of anecdotal evidence on offer.

Detailing progress since GfK began to track sales of bikes in 2013, Paul Mitchell, Client Insight Director, recently presented at The Bike Place Show as part of CI.N’s seminar series, many of which are now available to view online. Within that talk we learned from GfK’s multimarket data that mainland Europe too is seeing an unprecedented decline in the volume of technical consumer goods outlets, with Euro-wide data pointing to a 20% shrinkage between 2007 and 2014. This is evidence of the impact of the Internet and omni-channel shopping within a more data-intensive industry and may be a herald for future trends within cycling retailing. GfK is tracking bike-specific data at present, something that it anticipates being able to present to clients in the near future.

The industry is aware that import data from August of 2017 forecast 1 million fewer bikes shipped into the UK over 2014 levels. Mitchell’s presentation assessed the fortunes of individual segments within the currently available data from Mass Merchants and IBDs,

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concluding that the value of road bike sales continues to shrink, dipping 8% in 2017. Electric bikes, which now represent 11% of the market’s sales value from just 4% of turnover, continue to look the most promising opportunity for growth. Mountain bike’s steady resurgence too posted a 15% growth in value in 2017. According to GfK, the number of brands benefitting from as much as 80% of sales is accounted for by a pool of just 4.5% of the available labels in the market.

So, what’s the secret to getting within that slimline and exclusive club of labels shifting the market’s volume?

“Right now it’s about a world that’s fully connected 24/7.

That’s a major difference across all of GfK’s analysed markets. What we are seeing is online retailers driving click and collect, basket conversions and making effective use of social media. Those trends may be driven both by the retailer and the consumer alike. As put by Mark Lewis, the online director at John Lewis, ‘customers increasingly want their online experience to fit around their lifestyle, rather than having to fit their lifestyle around their shopping’. Globally 41% of people are saying their mobile devices are their most important shopping tool.”

If one thing’s evident from import data in recent years, it’s that price point rather than volume growth has seen those investing in the higher-end of the market score wins. That notion is backed up by GfK’s analysis of the available data, which shows that bike sales over £1,500 are in growth and accounted for 38% of market’s value in 2017, compared to 28% in 2016.

While electric bikes have played a strong part in driving up average sale prices, research undertaken by CI.N late in 2016 indicated that pedal-powered price points are rallying strongly too. Of 80 retailers surveyed, 36% placed their non-electric sales value between £400 and £700 and 32% between £700 to £999.

We'd wage that each of these customers has bought their bikes by entirely different means.

How is your biz targeting differing demographics?

“All of this means there is in fact a lot of opportunity for shops. As much as 40% of customers now actually like being tracked by a retailer and contacted with tailored offers,” said Mitchell on an evolving demographic more open to technology. “The omni-channel concept is liked by young people. They say it’s more likely they’ll visit a retailer who offers a genuinely different experience.”

For those retailers keeping good data and regularly marketing, lessons are to be taken from watching the way different generations are interacting with retail.

Mitchell’s talk went on to analyse social media interaction. The findings on social media usage are particularly interesting to those retailers creating a digital community around their shop. Data shows that ‘iBrains’ (Gen Z) typically spend 20 hours a month on Whatsapp, double that of the previous generation – Millennials. YouTube use tallies to ten hours per month versus two hours per month for Millennials. Snapchat again is higher, yet Facebook is actually less important to the emerging generation of shoppers. Instagram clocks around 6 hours per month versus Millennials at 52 minutes.

“We’re tracking the iBrains, who by 2020 will make up 40% of consumers across Europe, the U.S and BRIC markets,” outlines Mitchell. “This generation is the first that has grown up in a fully digitalised world. The way they use smart phones is different. While they have little disposable income now, 93% already have an impact on where the family spends their money, according to Goldman Sachs’ research. You may only ever get their partial attention, so strong visuals and feedback is crucial.

They’re impulsive. Mobile is always first, they share and co-create content. They are less loyal, so you can’t fool them with pricing and promotion. They won’t go on a price comparison website, instead they’ll get their information from social media. Virtual and augmented reality

looks set to be interesting in terms of engaging the iBrain, so for the bike retailer, get your house content sharpened.”

All things considered, it is expected that consumers will in future be increasingly seeking a brand experience.

In short, this means there really is no time like the present to put yourself in the customer’s shoes to see if your online and physical store journeys flow naturally.

In store, friendly and fast interaction both at the point of entry and departure, paired with a structured approach to sales is crucial. Where viable, the ability to demonstrate a product and subsequently deliver an experience-based recommendation is deemed of high importance.

Online, it is worth considering that in Britain 36% of shoppers deem the mobile their most important purchasing tool, compared to the previously mentioned global average of 41%, while Chinese and Indian consumers are leading the trend at 72% and 77%, respectively.

Is change a bad thing? That seemingly depends on whether you, the bike business, are willing to change with the times. There are positive snippets from existing research on iBrain consumers. Notably, iBrains care less about the ubiquitous bargain; something that has to date caused much damage. The catch? They want to purchase and walk away with goods now, this instant. With that in mind, this generation is more prone to shop in store and impulse buy than Millennials, potentially reversing a trend away from the high street. Experience is paramount, with the incoming generation of shoppers welcoming new ideas and tending to enjoy experimental retail services.

Want to help and gain from GfK’s cycle market data?

You can contact Paul Mitchell at paul.mitchell@gfk.com

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(( TRADE OPINION ))

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SMART WAYS TO INCREASE YOUR BIKE SALES IN 2018

WORDS: Melissa Balmer, Director at Pedal Love

T

he challenge that countries which have mostly promoted the sport of cycling from a business perspective, over the act of everyday bike riding as transportation, is that they’ve served their focus market really well but it’s not really a growth market right now.

Oh, you absolutely can and do get new sport riders, but to do so you’re often stealing from your competitors rather than actually creating new customers. While this can be fun it doesn’t create growth for cycling overall.

For 2018 I invite you to flip the script on this traditional approach.

Rather than fighting over smaller and smaller slices of pie, why not throw your net wider to catch more sales?

Because, frankly, the real growth market for cycling is the very market that is most often ignored by the industry - the casual occasional rider, the person not yet riding, or those who haven’t ridden in years.

There are millions of us. I personally hadn’t ridden a bike in over 30 years before I took it up again in 2009 and I’ve been happily riding ever since.

If we want the bike industry worldwide to flourish we need to serve this growth market and move them into active riding. We need this not only to have a financially flourishing bike industry, but also to successfully address traffic congestion, pollution and so many health issues that challenge us right now.

In the 2015 report “A Global High Shift Cycling Scenario” by the Institute of Transportation Studies at the University of California Davis (which also happens to be the U.S. City with the highest percentage of bicycling for transportation) the researchers note that “A dramatic global shift to increased cycling and electric biking, or e-Biking, could cut energy use and carbon dioxide emissions from urban transport by up to 10 percent by 2050 compared to current estimates, while saving society nearly $25 trillion (£17.8tr).”

That’s a lot of bikes that need to be sold. Intrigued?

Here are 5 ways you can best connect with these growth customers and make us happy:

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CELEBRATE CYCLING AS TRANSPORTATION Embrace and celebrate the concept of bike riding as transportation and not just for the various sports it serves so well. Chances are you make and/or sell bikes that function well for commuting. Chances are at least some of your staff are experts in this.

There are all kinds of clever low-cost ways you can help your customers learn not only how to successfully commute to work by bike, and (here’s the even bigger growth market) also help people with the gateway drug to more active bicycling - replacing short car trips by bike.

The 2009 US Household Travel Survey found 60% of trips a mile or less are done by private motorised vehicles like cars, SUVs and pickup trucks (a new survey was done in 2016 but it takes a long time for them to release the data). A mile on a bike is something almost anyone can do quite easily, even someone like myself who deals with chronic fatigue and pain issues.

The key is to demonstrate to your customers, and prospective customers, that you and your team not only know what you’re doing along these lines, but that you will happily assist them on this new adventure without blaming or shaming them into something they’re not yet ready for.

Obviously, tough motivational sports language about “no pain no gain” isn’t the way to motivate the casual not yet riding, or hasn’t-ridden-in-a-long-time, rider.

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So, what can you do?

• Think about creating online blogs and social media tips to reach out to your fan base about “how to” replace short car trips.

• Think about creating a window display and/or section of your website dedicated to transportation bicycling. You make most of your profit on your accessories right? This is where you not only display accessories, but also show how shopping and errands by bike are achievable.

Furthermore, show how cycling can be a fun way to get

to know your community, save money on fuel, and improve health and well-being. I’ll dig a little deeper into this later in this piece.

• Think about hosting classes and rides that will show your customers in person exactly how you do this. For rides, consider hosting very short family friendly trips of 4 miles and under that demonstrate things like biking with your kids to school, biking to frozen yoghurt, your favourite coffee house, pub and more.

• Show pictures of your staff and customers successfully and happily shopping by bike. At Pedal Love we’re starting to use two other hashtags on Twitter to talk about this: #replaceshortcartrips and #replacingshortcartrips.

• Take up the #quaxing hashtag for your social media outreach. The term, coined in 2015, means “to shop, in the western world, by means of walking, cycling or public transit” and came together because an Auckland based New Zealand councillor and former Olympian Dick Quax sent out a series of tweets scoffing at the idea that anyone would shop by any other means than by car:

“@lukechristensen @BenRoss_AKL @Brycepearce no one in the entire western world uses the train for their shopping trips” “@Brycepearce @lukechristensen @BenRoss_AKL the very idea that people lug home their weekly supermarket shopping on the train is fanciful.”

CREDIT: Allan Crawford

YOU NEED TO THINK BEYOND THE SUPER FIT, SUPER YOUNG, SUPER MALE AND SUPER WHITE IMAGERY. YOU NEED TO THINK ABOUT GETTING YOUR OWN UNIQUE IMAGERY.

CREATE VISUALLY AND EMOTIONALLY ALLURING STORYTELLING Yes it’s fun to share images on your website and social media about your sponsored team’s wins. It is. I won’t argue. But, in order to capture the attention and money of the growth market the casual, not-yet- riding and the hasn’t-ridden-in-a-long-time customers you need to mix it up. You need to think beyond the super fit, super young, super male and super white imagery. You need to think about getting your own unique imagery.

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What does this look like for your promotional imagery?

I’ll suggest: • Parents and grandparents of all ages, shapes and races riding their children to school and having fun by bike.

• Young, middle aged and retirees who live “car-light” or “car free” by bike.

• People of all ages and races who get together for fun casual bike rides for fitness, food and cultural adventures.

Photo sessions to capture the above types of imagery can be organised as events you sponsor with customers and your network. Just be very clear why you’re doing it (and it would be wise to get a standard photo release, especially for any children) and what the compensation is – which, depending on your budget could be lunch, discounts on equipment, perhaps a new bike, or even a modelling fee. From there on, your customers and network can develop into strong brand ambassadors.

I know professional photography can be quite expensive. You don’t have to go that route. If you don’t have someone on your team who’s already doing a great job on your behalf with their cell phone on Instagram you might just have a budding artist within your team that’s dying to give it a try. Who’s doing a great job showing off their fun online?

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(( TRADE OPINION )) If you decide to go the professional photographer route consider mixing it up. Rather than hiring a known, or up and coming sport photographer (unless they’re passionate about lifestyle photography too), consider hiring an up and coming wedding photographer who’s great at capturing movement. That’s right. I said wedding photographer. Wedding photography has blossomed in the past decade or so into something fun, hip and authentically fresh. Wedding photographers are great at making all kinds of people look their best - which is what you want. Not perfect fake models, real people enjoying themselves and exuding joy that bicycling brings.

What can visually alluring storytelling look like for your store?

• Creating window displays that change with the season sharing fun ways to replace short car trips by bike rather than simply promoting the latest bikes and jerseys.

• Creating a section of your story (even just a corner - to start) that’s dedicated to women and a section that’s dedicated to bicycling as transportation beyond the standard racks displaying baskets and saddlebags.

• For women: don’t think pink. I personally love pink, but not all women do. Many actively hate it.

Chances are that creating captivating displays aren’t your strength. That’s ok. Consider creating collaborative, reciprocal relationships to make this happen: • Why not see if an artist or designer might help you with your displays in exchange for product?

• Why not see if a local casual fashion boutique that does a great job with its own displays is interested in helping you with yours in exchange for cross-promotional opportunities? Or locally produced hats, bags or other types of active apparel?

EMBRACE STORYTELLING MORE THAN PROMOTING ON SOCIAL MEDIA People are tired of being promoted to. We want to be engaged. Yes, of course you need to promote your sales and products, but if you want to be truly effective on social media you need to be seen as a brand that offers valuable information and inspiration.

Actually it’s very wise to embrace a storytelling marketing strategy overall, but for now let’s focus on social media.

Why? In Inc. Magazine’s “4 Ways to Use the Power of Story to Build Your Business”, Ilya Pozin notes “Authenticity is attractive. While most people are inherently suspicious of brands, 80 percent of consumers say that authentic content can compel them to engage with a company. In a world increasingly filled with ‘fake news,’ ‘alternative facts,’ and a deluge of marketing messages, people yearn for what’s real. As a brand, you have the opportunity to cut through the noise and reach audiences by telling an authentic story.”

Remember that group of people you gathered to get more diverse images of riding bikes? Here’s where you share their story too.

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OFFICIALLY BECOME A CYCLING ADVOCATE Back in the 1990’s my partner Charlie Gandy was one of the key bike advocates in the US who helped convince US bike retailers that understanding and supporting bike advocacy was good for their bottom line - basically “more trails equals more sales.” The updated version of that is “more bike-friendly streets equal more sales.”

The only way to make that happen is political will. It’s a choice. Amsterdam and Copenhagen chose to move towards bike-friendliness in the 1970s and the UK, Australia, the US and Canada (except Montreal) more or less didn’t.

I know, I know, advocacy is an earnest word. It makes some people feel uncomfortable, and others think we stopped using it in the 70s. But your city, region, state, country, and frankly our world, aren’t going to magically become far more bike-friendly (which for you means massively more sales) unless the bike industry helps at all levels. All levels. We need to massively garner the political will.

We also need to flip the script on who cyclists are. We are normal everyday people, not some strange different species just because some of us frequently wear lycra.

In a great piece in The Guardian this past December, former London Cycling Commissioner Andrew Gilligan made a point in his opinion piece, “Britain wants cycling friendly cities. Here’s how we get them” a point that we all need to be making again and again and again: “every new cyclist is freeing space on the roads or on public transport for others who do not cycle. Everyone who cycles improves not just their own health, but everybody else’s, by reducing pollution, traffic danger and noise.”

Recently published, Outside Magazine’s new piece “The Bike Industry’s Sharpest Minds on How to Make Roads Safer for Cyclists” opens front and centre with Bicycling Magazine’s Editor in Chief Leah Flickinger saying “Become an Advocate - And Put Your Money Where Your Mouth Is.”

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(( TRADE OPINION )) How to start? Invite someone from your local bike advocacy group to come for a visit and a chat. No, you might not have much in your budget to support them financially, however, there are still cost effective ways you can be supportive of: • Could you host one of their meetings?

• Can you share issues they’re working on with your email newsletter list and social media outreach?

• If there isn’t a local bike-advocacy group in your area consider joining forces with your local bike-friendly friends and colleagues (yes, even other brands!) and starting one.

MAKE FRIENDS WITH THE MEDIA We need to continue the trend of local, regional, statewide, national and worldwide media taking a fresh and more open minded approach to bicycling as transportation. The media is still one of the biggest platforms we have for building new audiences and allies. But the media isn’t interested in your latest sale, and chances are they’re not that interested in your latest ride to help raise money to prevent cancer either. It’s not that it isn’t a great event, but there are just too many of them now.

Instead, what they are interested in is the personal story of someone transforming their life by bike. Remember the picture I shared of my friend Kellie who became a certified cycling instructor in her sixties? The media loves Kellie because we’re good at pitching the various different angles of her story depending on the media, and what that media is interested in. Creating a new career for oneself in midlife; check. A fresh diverse female voice for cycling; check. Someone who’s transformed her health (and no longer needs to take blood pressure medication because of it) by riding a bike; check.

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Kellie’s fun bike-friendly personality has meant successful placements in not only bicycling-focused media, but also a local paper here in Long Beach California, much bigger regional papers and radio stations too. My goal? For her to go on a bike ride with Oprah.

Who on your team (including you) and your network might be great to connect the media with? Who has an inspiring story?

Invite a reporter, who has been shown to be friendly to health and well-being topics, out for a very short sweet bike ride to meet this person. Make sure to offer them a sweet ride to test out.

Think about creating a relationship with that reporter.

Reporters are people. Super busy people, but people who like to be treated well. Understand what that reporter’s needs are for stories and you’ll not just place one story you’ll place many, and then you’ll become a known resource and media spokesperson. That’s a very powerful place to be and yes, you’ll absolutely sell more bikes while you’re at it.

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(( ELECTRIC BIKES ))

Speed Pedelecs: By the book It won’t have escaped the attention of those working in the electric bike space that some law bending has been occurring among customers keen to go faster. This is risky business for anyone turning a blind eye, or worse, enabling the practice. With the public asking more questions, CI.N asks Riese & Müller how can UK retailers legally sell speed pedelecs?

T

he easy thing to do would have been to sit on the fence when covering the speed pedelec segment, currently considered a niche of an albeit now exploding former niche. In the context of European turnover, public awareness of electric bikes is only just shifting beyond its youth in the UK and a fraction of those in the know will have genuine knowledge that these bikes can (not necessarily should) go faster.

The topic has become difficult to ignore as whispers of illegal use and, worse still, retailers offering illegal derestriction have become too loud to ignore.

In short, the risk has become significant to the electric bike business, which perhaps finds itself one poorly researched headline away from public outcry. That may put street legal electric bike use under undue scrutiny, something the currently profitable segment can ill afford. The risk to retailers enhancing bikes beyond a 15.5mph capability without declaring the change of use and filling out the appropriate paperwork is much akin to selling mopeds without any of the appropriate registration. In short, it’s not just risky

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business; it’s risking your business.

With rules and regulations varying between continents, OEMs may for some time be reluctant to hit the off switch on tuning motors, though it is understood the larger manufacturers are making progress here. So, what’s to be done if a retailer encounters a ‘dongle’ and how can those interested in the segment go about tapping into the demand in a perfectly legal way?

Electric Bikes Sussex, which announced in January that it will now take care of the paperwork on behalf of customers, is a pioneer in the segment.

Managing director Graham Rowe said: “We offer a personalised ‘registration service’, whereby we can clear all the regulatory DVLA Registration challenges on your behalf, leaving you to arrange insurance and ride away.”

Of course there’s a bit more to it than that. Customers will require a motorbike standard helmet, the bike will also have to adhere to different standards on braking, lighting and general build quality. Like mopeds, these builds must be ridden on the roads and not on cycle or shared use paths, unless otherwise stated.

As such they’re not touted to see quite the trajectory of less powerful bikes, explains KTM importer Col Williams.

“Speed pedelecs are a totally different prospect, I’m not sure they’ll ever be a big seller. They have to be registered as a moped and can only be used on road and certain paths while wearing a certified helmet. There will be a market that wants this type of product, but without significant changes in legislation I think it will remain small, as will the e-Cargo genre. These markets will only grow as the infrastructure in cities allows cyclists to feel safe.”

Daniel Jones, Riese & Müller’s UK sales agent has been working closely with the DVLA and DfT to ensure that his retailers can be on the right side of the law, should they choose to carry the highticket bikes that, on mainland Europe, are gathering momentum among those undertaking long distance commutes and touring, among other uses.

It’s not been easy, explains Jones.

Simply gaining acknowledgement that his test bike needed registering took persistence.

“Insurance is extremely difficult to obtain, most insurance companies just

don’t recognise the vehicle, so are unable to offer insurance,” says Jones.

Difficult, but not impossible: Jones has found a number of insurers confident enough to offer coverage.

On to the licence required and it appears speed pedelecs carry certain requirements.

“Due to my age and the fact that I passed by license before the 1st of January, 1997, I have ‘Grandfather Rights’. I am able to ride it without an additional test or licence. My son, who just passed his driving test at 17, despite being able to propel his push bike to over 40mph on the road or cycle path and having cycled for the last 5 years every day, can’t ride one without taking a CBT (one day moped test, this expires after 2 years) or a full motorcycle test.”

Like a moped, such builds would require some form of MOT. This, says Jones, is an area where bike shops, like car garages, could stand to become significant service winners in the near future.

“I strongly feel that the best people to assess the road safety of this vehicle is a cycle shop (they are also skilled and insured to carry out any work on them)

so it would be better if it had a service book needing a stamp every year rather than an MOT, which will be carried out in a location that doesn’t understand the bike or its operation. Mobility vehicles are registered with the DVLA but don’t require an MOT or a registration plate so the argument ‘all vehicles registered with the DVLA require an MOT’ is not fact.

“Having looked into the MOT requirements in more detail I feel it could do with a refresh. I’m amazed that a 50cc bike can have the same brakes as a 1,000cc bike. The same applies for the lights, horn, etc. Cars are continuing to get safer, bikes, it seems, are not.”

Is there still some way to go before everyone is singing from the same hymn sheet on the subject? Undoubtedly, yes.

Yet with the news that Eurobike will dedicate an entire hall to ‘e-Mobility’ this year, the bike and indeed auto trade’s involvement in the sector is likely to develop quickly. This will be further driven by cities phasing out car use, as is currently being seen across much of Europe. If your store is exploring urban mobility solutions outside of both pedal powered and standard electric bikes (like many are

in order to thicken revenue streams), then be advised there is no grey area between e-Bikes and speed pedelecs.

With service an ever-crucial aspect of the cycle trade’s profitability, speed pedelecs could, in time, become a good friend to the open-minded bike shop.

Yet, only if done by the book.

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(( ELECTRIC BIKES ))

Speed bikes: registration process 1

Order the bike. (Riese & Müller’s HS bikes come with a Certificate of conformity.

Dealers will have this shipped with the bike. For bikes manufactured this year they need to meet the new regulation - 168/2013/EU, as HS bikes do).

2

Order the forms at forms.dft.gov.uk/order-dvla-forms/. You need a “New vehicle import pack – Application to register a new imported vehicle for use in the United Kingdom” and “V55/4 -Application for a licence for a new motor vehicle and declaration for registration”. This takes five to 10 days.

3

Bike arrives.

4

Complete the V267 & V55/4 (information taken from certificate of conformity). If done as a company you will need to include a bank statement and/or utility bill and copy of corporation document. If completed as an individual you’ll need to include a bank statement and/or utility bill and a copy of driving licence/passport.

5

Send completed forms, ID (as detailed in 4), a cheque for £55 made payable to DVLA & the original certificate of conformity to DVLA, Swansea, SA99 1BE.

6

Await the return of the V5C (approximately 2 weeks).

7

Check vehicle tax at vehicleenquiry.service.gov.uk/ (it is exempt, so free).

8

Order a number plate. Jones used demonplates.com. They require a copy of your driver’s licence & V5C registration document.

9

Purchase insurance. Bikesure quoted Jones £135 for third party only, while Quoterack quoted £200 for fully comprehensive.

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Email: sales@hotlines-uk.com

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Tel: 0131 319 1444

(( TRADE OPINION ))

HOW DATA COULD RESTORE

PROFITABILITY TO THE

CYCLE TRADE WORDS: Jonathon Nunan, BetterBikeBusiness.com

I

love the bicycle industry. I’ve loved it since my first days working on the floor at Harry Hall Cycles in Manchester. It’s loved by most in much the same way we love our football team or our favourite Classics rider. Regularly let down, disappointed and in despair, but elated by those fleeting days of reflected glory. Annoyingly reminiscing about its ‘glory days’, which are apparently behind us now, yet every year exclaiming that, “this will be our year.” We proudly wear the jersey, while moaning about it endlessly with fellow supporters. We’ll immediately leap into action to defend it against outsiders, naysayers and interlopers.

We hate it too. But we love it.

Just like our beloved club or cycling team, we’re sure that if we could just get a few things right, make a few smart changes, modernise, invest in cool new technologies, recruit the right people, bring in a new system then we could turn it around. Take on the shifting paradigms of the game and the emerging challenges to our competitiveness and success. To stay profitable and to love what we do.

I’m like the pundit, who gets paid to proselytise, theorise and analyse from the sidelines, but also gets asked to occasionally join the back room staff or jump in the team car and help guide a team to improvement, opportunity or success. Every now and again, I get asked; “Jonathon, if you had the money and

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the resources, what would you do in the bike industry? What’s the big opportunity you’d go for?”

When I get asked that question, the answer isn’t probably what you’d expect. Not e-Bikes, IoT systems, predictive selling technologies, vertical integration, AI social media programmes, drone deliveries, robotised warehouses, nor automated customer service; all of which are cool, worthy and coming or happening already. It’s data.

WHAT KIND OF ‘DATA’?

Your data. Our data. The whole supply chain’s data. Shared.

Anonymised. Unified. Categorised.

Live and alive, readily available*, stock, purchasing, sales, product and returns data. Data which could in almost real time: report, guide and advise us on what’s really happening in the market and help us to make smarter, more real time, informed purchasing, pricing, investment, staffing and other business decisions. Key business decisions that could better respond to the market, improve customer experience, reduce wasteful spending, focus investment in the right areas of your business, increase sales, optimise supply, improve profitability and viability all along the industry food chain. * In theory at least. I’ll cover the realities and challenges of data accessibility a little later.

KEY DATA SETS AND WHAT WOULD HAPPEN IF WE SHARED THEM? Retail Sales Data This could help identify trends, consumer demand, sales opportunity, competitiveness and efficiency gains, all in real time.

From being able to see real-time uptick or downturn in particular categories, colours and sizes to optimised production, purchasing, design, pricing or promotional decisions; to being able to contextualise sales trends as a localised outlier, or as marketwide; to being able to identify your store’s or brand’s sales ranking in comparison to your competitors, territory or like businesses; or seeing what category business you might be missing out on – the potential benefits of shared sales data extend from improved efficiency in the direction of resources and cash flow; to the ability for bike businesses to be more proactive and less reactive.

EXPORT/IMPORT DATA Imagine accurate, real-time assessment of market size, performance and output.

Yes, there are already lots of ‘global’ reports produced, which can be purchased online for a few thousand dollars a pop. And, yes, they’re produced by respected professional researchers, analysts and publishers.

But so extrapolated and formulated is the data published that I typically find it at best a guide and at worst

“SO MANY ASPECTS OF OUR INDUSTRY WOULD BENEFIT FROM COLLECTIVELY KNOWING WHAT WAS ON FORWARD ORDER.”

completely pointless, perilous or misleading. It’s not the publishers’ fault, or indeed their intention. But a simple reflection of the fact that the published data is either limited, insufficient, out of date or ineffectively broken down.

Regularly updated export and import data, compiled within the industry’s import/export networks, would offer a great snapshot of the industry’s health overall. More importantly, these numbers help to guide significant investment decisions all along the food chain. From raw material sourcing to production, purchasing, marketing, personnel, sponsorship, retail acquisition or planning and much more. Instead, as an industry, we largely have to make educated guesses, based on the least worst data or unhelpful or misleading numbers.

Which if combined with…

imports into Europe and the effects on Taiwanese exports. Accessible inventory indicators would have helped manufacturers, brands, distributors and retailers identify overstock issues before they became a major problem; and reacted accordingly through adjustments in purchasing, production and shipping schedules.

For retailers, it could help them to focus their sales and marketing activities, when to hold margins and when to ‘special’ out stock, before it gets to the point of having to ‘burn’ it.

The ability for the supply chain to avoid gluts and troughs would substantially help stabilise pricing and avoid constant clearance drives through discount channels, which only serve to drive down consumer pricing expectations, margin capture,

held stock value and industry or territory wide sales totals. For example, if a £100 product’s retail sales value lifecycle could average £90, instead of £60.

BACKORDERS Meeting my market’s unfulfilled demand while holding or improving margin.

I have a bike shop in Melbourne and I can see that consumers have collectively backordered 500 track-pumps in my territory. I happen to have 100 track pumps sitting in my storage shed right now, which I bought on special last year. I’m also hearing from the sales reps that for some reason, there’s an immediate shortage of track-pumps available at the major suppliers. What am I going to focus my digital advertising and

INVENTORY DATA Could identify stock shortfalls or over-supply before they become a much bigger problem or conversely, a missed opportunity.

A recent European example neatly sums up the potential benefits for sharing inventory levels throughout the industry. Two years ago, the talk from European bike markets was of a major glut of bike stock throughout the distribution and retail networks.

A year later and all the reports are about the dramatic downturn of bike

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(( TRADE OPINION ))

in-store marketing on this week, do you wonder? At the same time, holding or extending my margin on my stock, when in fact I was just about to sell them off cheap because I was worried about the overstock.

FORWARD ORDERS What’s as good as knowing what’s happening in your market in real time: knowing what’s happening ahead of time.

So many aspects of our industry would benefit from collectively knowing what was on forward order; from production to purchasing, pricing, marketing planning, market capacity assessment, market opportunity, retail strategy and more.

First of all, I would know if my market/category was going to be capably supplied next year. Secondly, that the market for a particular category is expected to grow or contract.

Next, as a distributor, I could assess my market strength for that category in the coming season; which would affect my marketing decisions, planned dealer activities, or test fleets. Lastly, as a retailer, I could better assess my commitments to ranging or stock investment.

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SOCIAL MEDIA, COMPETITIVE ANALYTICS AND CUSTOMER INTELLIGENCE This is a whole other article. But if live industry data could be overlaid with social media tracking, competitive analytics and customer intelligence software: well, let’s just say we’re moving into the realm of the ‘dark arts’ here, folks.

Imagine if consumers could effectively be telling designers and factories what to make without realising it.

Imagine if productions could be adjusted from real time consumer feedback. What if retailers knew what colours, brands and categories consumers wanted in their area in real time. The potentialities will make your head hurt. I know it hurts mine.

It’s almost evil in its scope and potential. Very ‘Big Brother’. Very cool.

SO, WHERE WOULD THIS DATA COME FROM THEN? That box on your counter, your mobile retail devices or that server in your back office: anything you do business with that connects to the Internet.

Most retailers, nearly all distributors and certainly every supplier/manufacturer use some version of RMS or

business operating software. The fact that most of you don’t use your management systems fully or properly, or perhaps have the most suitable or capable software, is another discussion. For the most part, your systems will record, store and produce most, if not all of the vital core data that would be needed for a worthwhile industry data collection exercise.

Not only are you already producing valuable stock, sales and purchasing data every day you operate and not only are you capable of easily downloading and forwarding that data en mass with a few key strokes or automated reports, but you’re quite possibly already communicating that data back to your RMS operator and don’t even realise it.

BUT I DON’T WANT MY COMPETITORS KNOWING MY SENSITIVE COMMERCIAL DATA No one would. And they wouldn’t or couldn’t.

Who would give up their data if they thought for a moment it could be used against them, or would give competitors an advantage, or suppliers a negotiation edge? No one.

So all the data would have to be

(( TRADE OPINION ))

anonymised and converted to generic categorisation unable to be connected to your specific business. For example using tags against category, descriptions 1, 2 and 3, brand, size, colour, SRP Range, territory and country. It may look like: Bike BMX Freestyle GT Med Black $0-$499 NY USA. WHY HAVEN’T WE BEEN DOING THIS ALREADY? For some genuine practical, technical and commercial concerns. Also because we’re the bike industry, complete with its quirks, anxieties, politics, passions and shortfalls.

• Practical Unification of data categorisation and format and/or EDI interchange structures.

I admit. This is a ‘biggy’. For industrywide data sharing to be possible, even in concept, there would likely need to be some sort of industry symposium on the agreed definition of all categories and data sets and formats.

Potentially using some form of EDI system as the central aggregator. This could be manageably developed and updated category by category, territory by territory. Otherwise the task would be considered almost certainly too big to start, as well as prone to unmanageable obsolescence and expanding requirements.

• Who runs it and who pays for it?

Most major bicycle markets have a stand alone, or dominant bicycle industry body. As it would be most likely that industry data sharing would have to be managed and produced, territory by territory; at least at a retail and domestic distribution level anyway; the national industry organisations would be the obvious bodies to run, manage and publish each territory’s data collection programme. They in turn would need to be funded by an annual subscription by all participating businesses. They may generate additional income by either selling bespoke or industry overview reports; or even by licensing out the production of such reports to data firms.

• Technological issues This is where I have to admit a lack of depth with regards technology

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capability and technical capacities.

But I don’t think I would need to work for IBM, Microsoft, Salesforce or GfK to point out the fact that with the myriad of software packages, operating systems, formats, data update frequencies, information security protocols and so on, there would be numerous technical and technological issues that would need to be broached and addressed.

• Technology affordability Modern hardware, the software that runs it and the support to install and maintain it, costs money. Quite a bit, depending on the size and ambition of your bike business, as well as copious amounts of both heartache and time.

CONCERNS OVER ‘THE CLOUD’ & DATA SECURITY Cloud storage might have been the single biggest development to happen to business capacity and capability growth since the launch of the Internet.

But the idea of it still freaks out a lot of people, including business owners.

They worry that all their vital information will either be lost in the ether, or stolen. Whilst the realties might be quite different, the concerns are still real. Tackling these concerns is important.

COMMERCIAL CONCERNS It’s not just bike trade folk who don’t like to share information.

I already mentioned the understandable anxieties and concerns by bike retailers and distributors with regards to the sharing of their

sensitive data. Which is why all the data would need to be converted to an anonymous format.

It may surprise you to hear that it’s not the concerns of bike retailers that I fear might be the major handbrake on such a venture. It would in fact be the major RMS and operating systems companies who I suggest would be the most belligerent roadblock, at least in the initial phase, and not unreasonably so, to a degree. As I hinted before, many of the major retail software companies are already collecting your data, which they would consider to be hugely valuable and commercially sensitive. It’s also important for their business model, to keep clients and their data within their own ring fence as much as possible. If they lose control of your data, they lose control of you and your business and their leverage for customer retention, growth and up-sell.

THE BIKE INDUSTRY Our Passionate ‘Cottage’ Industry.

Firstly, depending on the territory, there are still a significant number of bike retailers not operating with some sort of Retail Management System; either server or cloud based.

Many are still relying on their accounting package and that’s if they have a computer in the first place. So there is certainly a capacity and capability shortfall in every territory.

Whether it’s sufficient to affect statistical integrity would depend on the country or region.

Secondly and connected directly to this first issue, is the simple fact that

a large proportion of business owners and operators in our industry either possess a ‘basic’ understanding of their RMS or OS, or are indeed practically computer illiterate. Add to that the large level of cynicism, suspicion or concern over global digital companies, their intentions and integrities, whether justified or not.

For the data to be truly representative and informative, it would ideally also include online retail (and perhaps even online ‘wholesale’) sales: as well as sales made by supermarkets, department stores, sporting chains and other large format retailers. While most industries wouldn’t blink at this, and indeed would see the need and value of such data, this is the bike industry. There’s still many amongst our ranks that are still not happy with the fact that a substantial portion of bicycle and bicycle product sales have been absorbed by online or large format, multi-category retailers. They may well choose not to be a part of a data sharing exercise if the likes of Wiggle, Walmart, Decathlon or Amazon are also involved.

WHY COULD INDUSTRY DATA SHARING ACTUALLY HAPPEN NOW? WHAT’S DIFFERENT? It’s (sort of) already happening.

You only need to look at the likes of the BPSA or NBDA in the US bike trade, CONEBI in the European market or the developing efforts of global industry data leader GfK in both the UK and Australian bicycle retail industries, to see that not only is data sharing in the bike industry possible and valuable, it’s already happening to some degree in a number of key territories.

They might fall short of the admittedly ambitious suggestions I am making; with relation to live or high frequency update data streams, semi or even fully automated collection, conversion, collation and communication and the multi-channel data sets, but they certainly show that it’s a relatively short leap to a substantial industry participation on shared data.

SOFTWARE TECHNOLOGY AND BIG DATA Data collection and sharing is already a reality in numerous industries far bigger than the bike industry.

This is very much aided by the capacity, capability and improving affordability of ‘big data’, AI and business intelligence software. In short, the technology required is available and it’s already proving its value to other industries.

MARKET MATURATION AND EVOLUTION I might have made a friendly jab or two at our beloved industry in this article, but in fairness it impresses me with the reality of just how much this industry, its retailers, distributors, brands and manufacturers have matured and evolved over the past ten years.

Rather than howling at the moon, the majority of the bicycle industry’s contemporary businesses are reaching for the moon. They’re accepting of the shifting paradigms in distribution, consumer pathway and the function of retail. They’re observant of the learning and insight offered by today’s global leaders in brand, distribution, omni-channel retail and customer capture. The bike trade has had its ‘come to Jesus’ moment. To be honest it’s had a few and now it knows it needs to break free of its cultural shackles and move forward on multiple fronts.

GENUINE NEED Critically, our beloved bike industry also needs some serious help.

It was never massively profitable, but it wasn’t bad. Over the past 15 years or so, the profitability and viability has been consistently eroded all along the supply chain. Thanks to multiple well-covered reasons I won’t venture

into here, we sense we are witnessing an industry almost inevitably marching towards a vertically integrated and homogenised, B2C paradigm. Partially due to the need to control the consumer pathway, experience and product relationship, but largely due to the reality that the cake slices are simply getting too thin.

While I think that B2C channels are a growing and inevitable reality in the bike industry, I also don’t think it needs to become the whole industry.

The expertise, immediacy and tangible advantages of the IBD; the online professionals who want to continue offering convenience, range and value; the value-add of the specialist local distributor and the attraction of a brand who just wants to focus on producing the best products it can; are all aspects of the industry I not only think we value, but will continue to do so in one form or another.

The truth is, we need to improve our business efficiencies, purchasing systems, investment decisions, product fulfilment, cash flow, sales and pricing strategies and above all, our profitability; as retailers, distributors, brands or manufacturers. I firmly believe the key to achieving this is shared live industry data and this is an achievable reality.

Jonathon Nunan Australia’s Bicycle Industry Consultant & Commentator jonathon@betterbikebusiness.com www.betterbikebusiness.com

WWW.CYCLINGINDUSTRY.NEWS // 025

(( TRAINING ))

PROTECTING

YOUR MARGINS WORDS: Dickon Hepworth, Jungle Products

ALL FOR ONE Unlike a lot of P&A out there, the good thing with helmets is that every rider needs one. Well the vast majority, anyhow. Protection, in the form of knee and elbow pads, is no longer the sole preserve of the downhill rider or the more extreme side of the sport. And, thanks to clever design and intelligent materials is also now increasingly common for most mountain bikers without inhibiting range of movement or adding unnecessary bulk. Helmet technology too has moved on apace, with more complex moulding techniques offering lighter weight, higher strength and improved ventilation. More recent advances now incorporate proven additional safety features such as MIPS that can drastically reduce the chance of brain damage in the event of a crash.

As well as providing a purchase opportunity in its own right, protection also offers a relatively straightforward add-on to new bike sales and a conversation can be more easily had at this point with regard to the customer’s existing protection and what their requirements may be.

UP TO SCRATCH Has your customer replaced their helmet in the last 5 years? UV rays can degrade both the adhesives and polymers used in the majority of cycle helmet construction over time. The current recommendation from both industry and outside industry experts advises helmets are replaced every 3 to 5 years.

Has your customer fallen or knocked their helmet in a crash? Even without visible external damage to the helmet, the EPS foam becomes denser after an impact, thereby reducing its ability to absorb further forces.

Is your customer aware of the improved safety features now available

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in more modern helmet design? With bike technology allowing riders to ride faster than ever, it makes sense for user protection to keep pace with this change too.

Are they interested in a lighter weight form of knee or elbow protection?

Current designs can be as unobtrusive as a knee warmer while still offering a much-improved level of impact protection.

SLIPPING STANDARDS The number of bike riders spending serious money on a bike, only to then choose the cheapest helmet is quite widespread. Some of the blame here lies with the current level of safety standards that all helmets are designed to pass. However, as bike technology and materials have advanced, helmet safety standards have remained static, meaning that in most cases the laboratory tests to certify each helmet are not realistic simulations of most enthusiast’s riding styles.

Much the same as the layman’s view that, ‘all carbon frames are the same’, helmets and protection can also be thought of by the customer in the same way. The reality is far from true and there is an opportunity to inform and educate your customer at the point of sale.

NEW TECH By varying the outer shell thickness on some helmet designs, multiple piece shells are now allowing increased protection in certain more vital areas such as the temples and back of the head, whilst at the same time reducing the thickness and lowering the weight in other less critical areas. Think of it as straight gauge vs triple butting. Yes, it’s more expensive, but once explained the benefits are clear to see.

Aerodynamic benefits are seen as a

key driver in the road market, with helmet designs moving away from the classic teardrop style to more modern blunt back profiles. Aero covers can improve things further whilst also offering bad weather protection.

MIPS (Multi-directional Impact Protection System) – more common in other high-speed sports, such as motorcycling and skiing – is now gaining more attention. By offering a second moveable layer inside the helmet, rotational forces on the brain during impact are much reduced and have proven results. Would you gamble on protecting the most important organ in your body to save a few pounds? Again, once the advantages are explained the decision is pretty straightforward.

THE SWEET SPOT Upsell your customers on their protection by educating them on the differences between low and high-end helmets and protection. Sweet Protection Bushwhackers incorporate MIPS technology into a five-piece moulded outer shell. The four-piece shell Falconer uses magnetic aero covers to improve aerodynamics and cold weather protection.

Choose brands that aren’t reduced online by the big retailers. Offer your customers something different that offers high quality and performance, as well as protecting your margins.

Work with suppliers who hold stock throughout the year and don’t top load your stores with pre orders, ultimately diminishing cash flow and encouraging discounting.

ABOUT SWEET PROTECTION Sweet Protection is based in Norway and blends industry-leading innovation with the finest craftsmanship available to create the safest and most advanced helmets, protective gear and apparel.

(( SKILLS TRAINING ))

CUSTOMER SERVICE, OR SERVICING CUSTOMERS? We won’t dwell too long on the now well-established adaptation challenges facing bike retail, but the question remains is the term IBD now outdated? Jon Iriberri, CEO at Custom4.Us writes on how the retailer can lead on service led money-spinners…

C

ycling retail faces ongoing difficulty in fine-tuning its place in the market. With many seemingly conflicting sources of advice and expertise on the best route forward to meet the age of internet shopping head on one thing is for certain, we must web proof our businesses.

There are suggestions that many shops have responded to this trend by refocusing and becoming retailers of service; think pro fitting, mechanics and other skills-driven offshoots.

This has come at the expense of the sale of product, with retailers deeming themselves unable to compete against the internet giants around the globe, many of which are gobbling others up to become yet larger animals.

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Viewed from this perspective, bike fitting could be a good opportunity to increase a shop’s invoicing by offering a new (or maybe reinventing the classic systems) service that provides the expertise customers cannot buy online.

Any parts or upgrades provided as part of that service are an added bonus and opportunity for profit.

THE BUSINESS Let’s imagine that I want to buy a helmet. With an RRP of, say, £200 including VAT, we can hypothesize the cost to the retailer will be around £100 + VAT. So, if we assume I pay 20% taxes (please forgive variations between countries), my retailer margin is £60. From this ‘profit’ I still have to cover storage, the possibility of not selling at all, shelf-life (new season products coming soon), potential discounts for frequent customers, friends or sponsored individuals. It’s not a lot of money in real terms.

Meanwhile, the computer-literate public (and let’s be honest most are now) see this helmet on the Internet for €120. That’s a 40% discount on my price. The internet retailer may pay less taxes and receive a further 5-10% off trade price as they’re such a big customer. The profit margin on the Internet is narrower (as you’d expect with 40% off RRP!), but the cost of business overheads is much lower due to economies of scale and, I’m choosing my words carefully here, their tax structures are less clear

(I often wonder why I don’t pay taxes when I receive something from China).

In conclusion, few products can be sold competitively in store, particularly when the internet can still offer same stock, availability, delivery, sizing and warranties at a reduced price.

SO, WHAT TO DO? Following on from the analysis above, it makes sense for bricks and mortar shops to focus their sales efforts on providing things that cannot be offered or provided by the Internet.

This could be a combination of sizing, assessing, fitting demonstrations, trials and testing. These services should be charged for, with any product involved also offering additional opportunities for profit. One of the toughest experiences as a retailer is to have customers asking to test shoe sizes, finding their correct size, then leaving the shop (and in some particularly rude cases, use their smartphone in store) to buy online. The solution here is not just to charge for the sizing, or opportunity to test sizes (happening today in some shops) but to change the selling paradigm to become a service shop.

Every service adding value or benefit to the customer should be charged. From shoe fitting, all the way up to full bike fit and custom bike or frame building. This leap for our retail model is difficult for many retailers, I know, but realistically it is the only way to provide long-term survival in a digitalised era.

Analysis ahead of fitting

Pressure points mapped live Most of the shops I have been visiting over the last 15 years are now more progressively based on retailing the mechanics’ time rather than selling bikes. Many even lose money on bike sales, which they recoup (with varying levels of success, it’s true) by selling services and upgrades. This is another reason why it’s so important to make sure your accounts highlight the different streams of income you are receiving.

WHAT CAN BE FITTED? (aka - what can I charge for) SADDLES Pressure mapping technology and a simple stationary bicycle, or set of rollers, gives your store the possibility of pairing customers to their perfect saddle in-store. Test and demo saddles are a nice tool for work, but this service is not free. You charge based on the product’s retail price, or you charge as a standalone service if the customer decides not to buy with you.

Professional shoe fitting can add an extra revenue stream SHOES/INSOLES Thermo mouldable insoles give a great opportunity of customising the shoe for foot pressures. This process is harder to do at home with your oven, but easy in the shop with expert guidance. If an insole cannot be customised, (for example if there is only one model/size available on the market) the customer will find it in the e-shop very easily, and probably cheaper.

Find a good cycling shoe supplier who can sell you what you need as you need it, because buying in bulk and trying to guess which of the many hundred SKUs will sell is bad business practice. Unsold pairs will eat the hard-earned profit of the sold ones. So an optimum delivery policy of the shoe brand is the first main decision of your shoe supplier. Have a good model, with access to every size from UK5 to 14, and then simply reorder to restock.

CLOTHES Though an area of increasing decline in many bike shops, in square footage terms, clothing obviously presents a further opportunity to size up a customer in store and explore chargeable methods on the experience.

Perhaps you’ll allow customers to try garments in store on a turbo trainer in order that they feel the garments in action, not just stationary.

BICYCLES Or more specifically, fitting and servicing.

SOME ADVICE ABOUT INCLUDING BIKE FITTING IN THE SHOP The invested money must be related to the expected income of this service.

If I charge £150 for a fit and I expect to do 50 in the first year, my investment in fitting tech/products should be around 33% of this total amount. (£150 x 50 = £7,500. My 33% investment tallies to £2,475).

In future years I can add some new materials or technologies to my fitting practice, which in turn adds extra value and allows me to charge more.

The tendency to expend huge amounts of money at the outset of a fitting business (which should be a longer-term economic operation and organic growth) reveals a deep ignorance of the fitting business and also how to build customer confidence. This is an attitude based on the expectation that tech wizardry is going to induce the public to flock to your practice.

Obviously hi-tech claims are going to help encourage them a little, but they are never the foundation of any successful long-term fitting business. High tech equipment, like the Internet, doesnot help you build a rapport withyour customers or provide the sortof warm individual service worthy of their money. That must come from your staff, so train them well and ensure that you’re all well versedon the objectives of the business’ service departments.

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(( MARKET RESEARCH ))

HEALTH CHECK: THE CARGO BIKE MARKET There’s a change taking place on London’s streets: the capital’s couriers are turning away from fixed gear bikes in favour of cargo haulers, writes Duncan Moore.

So what’s life like as a city specialist of these often unique builds?

Riese & Müller are one of many now integrating electrics into cargo haulers.

C

ouriers are embracing the greater load carrying capability of cargo bikes, as they have to ferry a more diverse range of packages after the documents they used to carry became transferred electronically.

It is not just cycle couriers that have discovered the advantages of cargo bikes for delivering parcels in cities, major commercial operates like DHL and UPS are now investing in fleets of cargo bikes. The low initial cost, compared to a van, low running costs and ease of movement through congested streets are all major incentives.

When CI.N spoke to Rob Bushill (cofounder of the Bristol-based producer of hand-built transport bikes) and Sylvia Gauthereau of London-based cargo bike specialist London Green

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Cycles to get their opinions on what is stopping wider acceptance of cargo bikes, three main factors were suggested; a lack of knowledge about them, poor infrastructure and the perceived hard work of riding them.

A LACK OF KNOWLEDGE One of the key factors in getting people interested in the concept of cargo bikes and the practicalities they offer is exposing them to the bikes. “Once people try a cargo bike they understand what the point of having one is,” suggests Gauthereau. “We offer demo rides from the shop and we have a trial at home service. We will bring up to three different models to your home for you to try out. We hire bikes out so people can take one out and use it as if it were their own and

follow their regular routes on one of our machines.”

A similar view is taken by Bushill who suggests that people will only accept cargo bikes as a viable option if they get exposure to them. “People need to see them and let the idea soak in. The UK is very conservative and new ideas are not always readily accepted.

Cargo bikes are cool and practical though and that combination will help the cargo bike idea gain some traction.”

There is also the problem of people simply not appreciating how versatile a cargo bike can be. There are many options on the market that are designed not just to carry bulky goods, but small children too. London Green Cycles has tapped into this market with the range of machines it offers including a wide selection

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(( MARKET RESEARCH )) but that situation is improving. In London, especially, you can see more and more cargo bikes out there,” says Gauthereau. “It started out as a family thing, a way to carry children and now it is moving more towards businesses.”

Show people how cargo bikes can fit around their lives, urges Bushill

of bikes specifically set up for child carrying duty.

Gauthereau says of the rise in numbers of parents using cargo bikes for child transport, such as doing the school run: “Family buyers tend to have small children. The birth of a second child is what usually triggers the purchase of a cargo bike. They are usually people with a certain level of income because the bikes are not cheap.” She then goes on to suggest that in situations such as these, the cost of a cargo bike is not an obstacle as a second car would be far more expensive to do the same tasks.

However, he does believe buyers are out there who are open to new ideas.

“Bright, forward-thinking, educated, artistic, family people. These are the people that make up the majority of cargo bike buyers. Most are just pleased to find an alternative mode of transport, one that can make life easier for them.”

It is not just domestic users reaping those benefits according to Bushill: “Businesses in our cities are also finding that cargo bikes are a great way to move goods cheaply and efficiently.”

POOR INFRASTRUCTURE Once people overcome their ignorance of the adaptability and practicality of cargo bikes, the problem that then

needs addressing is one that is common to all forms of cycling – poor infrastructure. “As a nation, we have a long way to go before the bicycle retakes its position as an appreciated transport solution,” says Bushill.

“Without nationwide connected cycle routes and provision, the growth of the UK cargo bike market is always going to be a patchy affair.”

This is one area where London is leading the way with the introduction of Tern has a smash hit on its hands with the GSD

cycle superhighways and more planned by the capital’s Mayor, Sadiq Khan.

These dedicated cycle routes are wide enough to be ridden on cargo bikes, even those that are three-wheelers.

“Infrastructure has traditionally not always been suitable for cargo bikes

THEY’RE HARD WORK By their very design cargo bikes are heavier than regular bicycles and this is enough of a reason to deter many potential buyers who fear that once loaded with children or goods, the cargo will be too heavy to pedal. Fortunately, the rise in popularity of e-bikes is spreading to the cargo bike market.

“Electric cargo bikes hold the key for market expansion (for those who can afford it) enabling folk who are less fit/able, with more kids and or bigger hills/longer routes to school to benefit from the raft of advantages that access to a cargo bike can give,” is the view put forward by Bushill.

He continued: “The developments in the last few years and the fact that major bicycle and car manufacturers are producing motors (and making them available to smaller producers) is changing what's possible.” Bushill adds: “E-cargo bikes make a lot of sense if you're replacing a second car (which is a product motivator for us) – adding electric assistance changes the game, ups the ante makes a lot more possible.”

The fact that the type of customer that buys a cargo bike for domestic use is not necessarily a regular cyclist is helping to push the interest in electric cargo bikes in Gauthereau’s opinion. “Electric bikes are proving very popular and there’s a lot less animosity towards e-Bikes among cargo bike people, they appreciate the extra help an electric motor can provide with a fully laden bike. It makes riding a more pleasant proposition.

“E-cargo bikes are also proving popular among customers who are older or who have some disabilities.

The trike designs of many mean there is no need to balance and that can be a big advantage for some customers.

Again it is offering a cheaper option to car ownership,” adds Gauthereau.

CONTACTS FOR UK DEALERS LOOKING TO STOCK CARGO BIKES:

Bullitt Graham Pearce bullitt@uwclub.net

Omnium Cargo Jimmi Bargisen jumbo@omniumcargo.dk

Bicicapace Valentina Di Fede valentina@bicicapace.com

Christiania Bike Andrea Casalotti info@christianiabikesuk.com

Rodford Built Transport Cycles Rob Bushill rob@reallyusefulbikes.co.uk

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(( SELLING: INSURANCE ))

THE UPSELLING ADVANTAGES OF

BIKE INSURANCE R

egardless of price, a new bike is likely to be a substantial purchase for any customer. Of course, you’ll get those who arrive with the exact model they’d like to buy and the price they’d like to pay. Then there are those who have come into your shop because they’re unsure. Perhaps it’s a commuter bike, or they’ve just signed up to RideLondon and haven’t ridden in years. With any customer you’ve got the perfect opportunity to build a relationship.

Whoever enters your shop, the very fact they are there is an opportunity to provide them with a service that the Internet cannot provide; the human touch. They’ve come to you as the expert and they want to be guided in the right direction. This is where you have the opportunity to upsell your services and expertise, allowing your customer to leave not only in the knowledge that they’ve bought their dream bike, but that they and the bike have, and will be looked after.

An easy way to add value to a customer’s purchase is to include insurance. Don’t get us wrong, as much as we would love every cyclist in the country to head home with a fully insured bike we’re aware that it’s not for everyone. All the same, empowering them with information to make an informed choice should leave them feeling good about the service they received from your staff.

Many people prefer to do a transaction like this at home online using an insurance aggregator, or they may feel comfortable keeping their bikes insured on their home cover. These options may be perfectly adequate, but they often fall short in the event of a claim.

Did you know that many home insurance policies exclude cover if the bike is stolen outside or while in use? And, some insurers will increase premiums the following year if your customer puts in a claim for a stolen bike.

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HOW TO BUNDLE INSURANCE INTO A BICYCLE SALE Ride away policy: Work with an insurer that is willing to put together a 30, 60 or 90 day blanket ‘free insurance’ policy for your customers. It’s a great upsell and gives them a little ‘hug’ while riding away, without the fear of falling off and damaging it.

Insurance discount: After a simple conversation discussing the benefits of a specialist bicycle insurance policy, you could send your customers home with a ‘one off’ discount code to use at their convenience. Even better, if you follow up with an after-sales email about caring for their bike, you then have another opportunity to remind them about coverage. What’s better is if you partner with Yellow Jersey, the company will pay a commission on each sale directed to us.

Membership: We’re working with a number of shops who have created a membership scheme for their customers to drive loyalty and increase return visits. A shop membership might include servicing and a cycling jersey, but you could tier it, offering a few levels of cover.

We’ve generated a simple blanket insurance cover that you can sell onto your customers as part of a membership package. For example, you could sell a monthly membership where customers receive free servicing, coaching, club rides, store discounts and insurance for a rolling monthly fee. It’s incredibly easy to set up and a great way to build loyalty.

At Yellow Jersey we now have a range of short-term and annual bicycle insurance policies to suit all types of cyclists, from the enthusiasts who own a fleet of bikes and race them worldwide, to club riders, through to newer riders and commuters who might be looking for something more basic.

BUSINESS INSURANCE SERVICES If you are looking for a low-cost policy that covers your basic legal requirements and little else, you can find those without a problem on any online aggregator. But often such policies are playing at the edges of minimum premiums providing little else other than covering your obligations. Why not take the time to explore what other options are available to you, what additional coverage could be included come your next shop renewal?

• If you allow test rides of high value bikes, are they insured away from the shop?

• Is your liability as a mechanic covered both in the shop and at events you may attend?

• Are your bike fits and coaching liabilities covered?

• Does your race team need costeffective insurance?

• What about the sportive you arrange?

• Are your fleet of rental bikes insured?

• And that week’s training camp in spring: does your liability extend overseas, as a tour operator?

These may be questions you’ve asked yourself, or indeed your current insurer. They may already be included.

If not, we’ll be happy to help.

CONTACT YELLOW JERSEY Yellow Jersey has been in the commercial insurance industry for 25 years. t 0333 003 0046 e business@yellowjersey.co.uk w www.yellowjersey.co.uk

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(( WORKSHOP MUST-HAVES ))

Stuff your workshop should have but probably doesn’t.

DER HAMMER SUGGESTION BY: Ellis Blackman As we know from my previous article, I like a cool tool, but when you think hammers, you may say hammers are ten a penny, aren’t they? Well, not when Alex at PortusCycles in Pforzheim (near Stuttgart) decides to make his own to go alongside his custom frames.

HIROBEL’S FRAME CLAMP SUGGESTION BY: Chris Keller-Jackson Shop Mechanics frequently use workshop stands to help manage bike-fixing duties, helping with gear setup, bar tape wrapping and almost every repair and setup activity. Many home mechanics have one too. What happens if you have an exotic frame material like carbon, or bamboo, or perhaps a tandem or any other unusual frame shape? Sometimes a traditional set of jaws is not the right tool for the job, it might crush the frame or have nowhere suitable to clamp to.

The Hirobel frame clamp serves to alter your perception about wrenching unusual shapes and delicate materials.

Instead of clamping tubes, it cradles them securely with two rubber V-shaped wheels that are quickly adjustable to the frame shape, with gentle tie downs for security. The clamp fits into your existing workstand jaws and does not twist, due to the shape of the Hirobel’s bar. One wheel is fixed, the second is on a quick release so can be adjusted to move up and down the bar to fit that specific frame shape. It’s all very simple and effective in its operation.

Until you have tried to build up a carbon frame bike, clamping the seat post to prevent compressing the tubes, (just ponder the sideways stresses on the seat tube) or have tried to clamp a large aero cross section tube in jaws that don’t open quite wide enough, you might not see the need.

Believe me, the Hirobel offers a better solution. Its method places no clamping stress on butted and thin tubes, or bending on seat posts. Conventional workshop stands are great and this does not replace one, yet if you have a jawtype stand, this enhances the capability and flexibility when building and maintaining all bike types. It works just as well with conventional shaped frames and materials too. It just stays in the jaws of the workstand.

Do you need one? They are quite expensive but that shouldn’t be prohibitive. A customer seeing their frame cradled by a Hirobel will know that you care and want to protect and support the frame the best you can. Home mechanics might consider this too niche (or too expensive), again it really depends what bike(s) they have, how much they value the bikes and how much work they do on them.

The Hirobel does appear to be designed to last a lifetime, as there is not a lot to wear out, so it may be a worthwhile investment for some.

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These mega hammers combining British Steel & German manufacturing techniques put even Mjölnir to shame. DER Hammer is manufactured from Reynolds 631 and the shaft is sized to take a standard bike grip, allowing you to customise to suit.

The head is even filled with sand so won’t recoil like a normal hammer and has interchangeable heads. Have a HT2 crank seized in the BB that needs some kinetic love?

Use a brass end.

Local big legged rider known as #legsbenedict using an aluminium freehub body and the cassette won’t come off? Try the polyamide.

Available with a clear powder coat only and weighing around 400 grams, DER Hammer will retail for around 89 Euros and production will start early March.

It’s not for everyone. I’m sure there’ll be some that will STILL say ‘A Hammer is just a Hammer’ but with welds like that and steel that is most definitely real, I’ll be getting one.

HAVE A SUGGESTION? Send us your workshop must-haves to mark@cyclingindustry.news

(( PROFILE BIKE SPANNER ))

LIKE CLOCKWORK Ever on the lookout for mavericks in the bike business, CI.N thought it worth a catch up with the owner of a bike shop turned shopping centre-based workshop exclusive business. Steve Baskerville talks us through the Bike Spanner business model…

TELL US A BIT ABOUT YOUR DECISION TO CLOSE YOUR RETAIL STORE SOME YEARS AGO – WHAT FACTORS DROVE THIS? Partly personal, partly financial, partly circumstantial. A huge roundabout right outside our former shop was planned, meaning the shop would be very hard to get to for six months. I knew the business couldn’t survive that.

I also had a health scare, which meant I had to slow down dramatically for a period of time. I’d gotten tired running a shop too and I felt the need for a big change.

I’m not going to do the modern thing of pretending these were the only reasons though, which seems the norm with current shop closures: obviously financials played a big part.

I just couldn’t see a future for the bike shop model anymore and knew in my heart that the business had run its course.

Looking back, after nearly two years out of it, I can now see that the over-riding fact was that I just wasn’t very good at it. There were some aspects I was good at, really

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good at, but a lot I was just rubbish at. In retrospect, if I’d brought in the right people and stepped back from certain aspects the shop might still be going, but given how things have panned out I’ve absolutely no regrets.

WAS THE DECISION TO MOVE TO A WORKSHOP ONLY MODEL BASED PURELY ON THE PROFITABILITY YOU’D SEEN IN YOUR PRIOR WORKSHOP? Mainly it was the belief that standalone workshops have a great future. There are a lot of other factors in the mix, but the old saying “the Internet can’t fix your bike” rings true, louder than ever.

IT’S PERHAPS UNUSUAL FOR A BIKE RETAILER TO SET UP IN A SHOPPING CENTRE. WHY DOES THE FORMULA WORK FOR A WORKSHOP OPERATION? One word: footfall. We get 40,000 people past our door weekly. Do I need to say more?

DO YOU RETAIL ANY GOODS FROM BIKE SPANNER? We carry a bit, but not much. Space is at a premium so we have to pick our ranges very carefully. Mostly it’s the sort of things you sell at the time of a service: mudguards, lights, etc. that we also pick-up the odd retail sale for too.

We carry some maintenance products, cleaners and the like. These do well at certain times of year, but it’s all to complement our core business, which is repairs.

TO WHAT EXTENT HAS PASSING FOOTFALL HELPED GET THE WORD OUT ABOUT THE BUSINESS? Massively. It’s why we pay the rents we do for space. All our online marketing activity and website is handled by our agency, Caffeine Injection, and they do a lot for us and it’s very effective, but our workshop is open plan with glass walls. Nothing beats having thousands of people a week see you repairing bikes day in, day out.

YOU ONCE TOLD US THE LAYOUT OF YOUR WORKSHOP IS AKIN TO THE WAY MCDONALDS SERVES BURGERS – SET UP IN THE MOST EFFICIENT WAY POSSIBLE. WHAT’S THE FORMULA? There is no one formula. It’s all about working with the space you have, minimising the time spent moving from one area to another and ensuring as far as possible that everything is to hand. We use an entirely automated workshop management system, which used to be controlled from a single computer. This meant the mechanics all needed access to the computer when carrying out service work. Everything is now done on iPads, so the mechanics can move around more and don’t have to wait for access to the computer.

HOW MANY STAFF ARE WORKING DAY-TO-DAY? In winter one or two, depending on the day and workload.

Over summer we’ve three to four. We have an off-site workshop for any over-flow. It’s mothballed in winter, but will be readied for operation from about April/May. It costs us peanuts in rent, so it’s very cost-effective, even if it sits dormant seven months of the year.

WHY DID YOU OPT FOR A PHYSICAL INSTEAD OF MOBILE SERVICE PRESENCE? The plan was always to expand into mobile, but I just couldn’t make the numbers stack up, even now. If you’re the owner/mechanic then it can work. If you have to

employ people, I personally can’t see how it works. Not saying it can’t work, just I can’t figure it out!

WHAT ADVICE WOULD YOU GIVE OTHERS CONSIDERING TIPPING THEIR SHOP FLOOR BALANCE IN FAVOUR OF SERVICE? There are so many variables it’s impossible to give any blanket advice. For instance, turning the old shop unit into a service-focused business would have failed because the location was rubbish. From what I see, the workshop is still a massively under exploited part of a lot of bike shops, but then, for Bike Spanner, that’s no bad thing!

There is also a lot to be said for people trusting standalone workshops more than they trust bike shops. We hear it a lot in the workshop; they’ve taken their bike to a shop that has advised them to scrap and replace it. At the back of the customer's head is a voice saying, “Well you would say that, you just want to sell me a bike.” Is there any truth in that? From what we’ve seen, no. In most cases we’ve advised the same, but the fact is the doubt was there, so it’s a tough one for most shops.

WORKSHOP ASIDE, WHAT OTHER SERVICE LED WORK DO YOU UNDERTAKE TO MONETISE THE BUSINESS? Not much in truth. We have an extremely active events schedule, most weekends we’re doing something, but it’s almost all to market the business as opposed to directly put money in the till. We do pop-up shops at certain times of the year, for instance a Muc-Off gift shop at Christmas, and these are all about the sales on the sale, but most actively is to promote the workshop, not take money.

HOW DO YOU CALCULATE YOUR PRICING AND WHAT EXTRAS ARE CHARGEABLE? Pricing is dead simple. Overheads divided by estimated job time plus required profit. It’s not rocket science. We charge for everything. If we can allocate a cost to anything we do, or use, then it gets added to the bill. We have a set fee applied to every job to cover all those things you can’t really cost, like hand cleaner, blue roll, tea bags, etc. At the moment it’s a standard £1.50 per job and it’s explained on the job sheet and at time of costing the repair. No one has ever questioned it. Essentially it’s free money, and when you add it up over the year, it’s a substantial amount.

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(( TRADE OPINION ))

EQUAL OPPORTUNITY? A lot has been written on what has been described as “inherent sexism” in the bike industry, yet often it can seem we are little closer to eradicating the problem. Keen to hear first hand experiences CI.N is seeking your stories. We begin with Vicky Balfour of Biketart’s journey thus far…

T

here’s a general assumption that the cycling industry is institutionally sexist but is that really the case? Early last year I approached my local bike shop, Biketart, looking for a way back into work.

As a woman in her early forties, who had not worked for over a decade due to the demands of being a special needs mum, I was possibly not the most alluring candidate. I had a background in marketing and PR, but it was a growing passion for all things bike, especially the mechanical side, that I approached them with. Armed with a confidence and bravado that belied the truth I wrote to Biketart and asked for work experience in return for singing their praises at the Southern Enduro Series. Remarkably, they took a punt on me and went one step further by bringing a bike of my choice into the deal. Fast forward to now and I’m nearly-qualified as a Level 3 bike mechanic and working up to three days a week in a role I love. So, where’s the sexism? What has been my experience and that of other women in the industry that I’ve spoken to?

What’s it like to start a new career from the very bottom at a time when most people are approaching the peak of their careers?

HOW DOES MY BACKGROUND AFFECT THIS? Like many women who are involved in mountain biking (the branch of cycling that I love most) I have a background in male dominated environments: I grew up racing sailing dinghies and playing in boatyards and dockyards, but was funnelled into a more ‘arts’ based education and a job in PR. However, engineering and mechanics runs in my family and from a young age, I found machinery and engines fascinating. Maybe the true sexism I encountered was in a classic 1980s comprehensive school education, which funnelled me down a line of academia and away from practical, hands on work. There is something innately appealing in mechanics – the way that pieces of metal or plastic fit together to create a greater whole and that if they’re not fitting together it’s most likely because

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you’ve done it wrong. Just as they don’t care what kind of a day you’re having, pieces of a bike don’t care if it’s a man or a woman working on them. There’s no inherent reason why a woman should not be as good a mechanic as a man and vice versa. So why are there not more female mechanics? I’m afraid that I still put this down to the education system and society’s perceptions in general rather than down to the industry not welcoming them.

WHAT HAVE I NOTICED? I am not claiming that explicit sexism doesn’t exist, sadly, I’m sure it does but I have only experienced it once while I was training. Undeniably it left me feeling humiliated and angry. I do not like to be beaten and refuse to be ruled by fear, so when faced with that situation I resolved simply to work harder, do better, and prove my worth. It was no different when I was a young freshfaced PR and felt the searing frustration of a male colleague promoted ahead of me simply because he went in with more self-belief and ‘balls’. While there’s no difference between the abilities of men and women there seems to be a difference in attitude which leads to some men believing they deserve something, taking more of a risk and then working like mad to deliver it.

Put simply they seem to ‘blag it’ better than most women! This is not down to sexism in any particular industry, and it may not even be down to gender, it may simply be personality.

WHAT’S IT LIKE FOR OTHER WOMEN? A quick request for experiences on the MTB Chix & Trails Facebook group came back with a surprisingly similar response. Those who responded were either guides, coaches or mechanics. When I asked the question,

I anticipated hearing horror stories, but apart from one sad story where a coach ended up retiring early because she was fed up with the online abuse she received, the overwhelming majority commented that any perceived attitudes based on their sex, were often overcome by proving their ability at the job in hand. Strangely some male clients who doubted a guide’s fitness or ability found that when it came down to it, it was their ability that was lacking and not the guide’s – of course, that could merely be coincidence, I couldn’t possibly comment! Furthermore, the women all seemed to attribute part of their success to the challenge of disproving the myths and stereotypes. Something that I didn’t expect to hear was the overwhelming sense that women could be equally sexist against men and also were judgemental of other women working in the industry. Sexism can go both ways, a fact that some don’t like to accept.

Biketart has been overwhelmingly supportive of me as a working parent and as a trainee, but it’s not because I’m a woman and therefore a minority group that needs special dispensation. I expect to be treated and judged fairly and on merit, just as any male member of staff would. In my opinion if we weight the scales in favour of a particular group we will create further problems. What we need is to focus on skills and work in order to create true equality regardless of gender.

BACK TO THE QUESTION IN HAND How do we encourage more women to work in the industry and promote those who already do? We can host the debate about career choices, spread the word about the benefits of working in the industry and the characteristics of people who enjoy that work – male or female. We can continue to encourage women in all areas of the sport too.

If I hadn’t got into riding I wouldn’t have found the confidence to follow a career as a mechanic. The media can further play a part by normalising the role of women in the sector. One woman commented that she felt sad that I was writing an article like this rather than writing on something bike specific, but in my opinion anything that raises our profile is valuable. Ultimately, we need more presence.

Rather than simply focusing on the issue of sexism, maybe we should look at what value society places on manual skills and knowledge and how we can encourage girls and boys to follow careers in those roles. For me, this is the more interesting debate.

Have a story to tell or suggestion to make on this topic? Please contact the CyclingIndustry.News editor at mark@cyclingindustry.news to discuss.

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(( RETAIL OPINION ))

FINAL THOUGHTS…

By the time you’re reading this Cottingham Cycle Centre will have closed its doors, having traded since 1984. Keen to better understand the present challenges forcing a record number of cycle stores to close, CI.N spoke to Manager Chris Jacques about the challenges facing stores and what, in hindsight, the business might have done differently…

To what extent has a shift in consumer buying habits affected your business?

It’s massively affected our trade.

We sold online ourselves via our eBay store and in the past five years it’s gone from in store sales being 80% and online store purchases being 20%, to completely the other way round.

Has the advance of direct to consumer or omni-channel sales affected your trade at all?

Direct to consumer sales are definitely impacting independents on price alone, cutting the middleman and giving the consumer a cheaper price. I think there’s definitely a place for it and I’m sure someone is making a lot of money.

For experienced cyclists who know what size they need and have been cycling for years it’s amazing what value for money products you can purchase.

The flipside is that it then squeezes the price out of everything, therefore demeaning the product infrastructure within the entire industry.

What about other online factors such as discounting of current model year stock?

This isn’t a particularly new thing, but it’s definitely a lot more common having tons of places having “loss leaders” to gain repeat custom.

Which segments saw the most significant decline in net profitability in recent years?

Parts were definitely the main segment where we noticed a decline in profitability, just because you’re competing with every other online company racing to the bottom.

There’s a huge problem with people

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sourcing certain brands OE and selling it to the general public for basically what we can buy it for trade. Any independent will tell you this.

Customers can bring you a full groupset for a re-build and pay less than we do to obtain the goods.

In the last few years of the business, where did you find it easiest to retain net profits?

We feel the workshop is the only place independents can really thrive. Luckily we’ve had a long time – 30 years’ worth of experience – to solidify our reputation as mechanics. Service work certainly came to represent a bigger part of profits before we closed.

What changes did you make to the business that made the most positive additions in recent years and which do you wish you had explored sooner?

It depends on which part of the bike market you’re trying to tackle, in my opinion, but social media is a massive part if you’re an independent. For us, BMX was a huge part of our shop and we’ve helped at least four riders gain magazine covers and contracts riding for huge companies worldwide, which we’re extremely proud of. This was achieved just by helping people out with parts and putting a few spokes in here and there, giving helpful customer service, talking to people with an understanding and a passion for the discipline. If you’re passionate about what you do people understand and know you’re not there just to extract cash.

If you were to have reshuffled your floorspace to prioritise profit drivers, what would take up more and less room?

From a purely business perspective, bikes like to gather dust unless you’ve got exactly the right size, model, colour and price for the customer ready to go. It’s almost impossible to do that while giving the customer a massive choice of bikes, many of which eventually get reduced online in under a six month period by online retailers. Certain niche P&A has always been strong for us, so that would tend to dominate our floorspace, rather than lots of bikes.

What advice have you for others facing a tough year ahead?

Shops that have a cafe’ or a social community hub focal point, as well as a repair centre seem to thrive as people will be more willing to pop in have a nosey. Products and bikes are available everywhere now and sold cheap, so it isn’t enough to have just products unless you’re creating a scene and making your own. We’ve been doing our own merchandise for a long time in order that we have something no-one can compete with.

If you don’t have any sort of social media presence you’re almost shooting yourself in the foot, but be selective with it. Don’t just create a Facebook, create a Snapchat/ Instagram and give it a brand identity.

What will you and your staff move on to now your time in the shop is up?

We’re exploring our options right now. I think one of us is going to work in health sector. I’m thinking about revisiting education and my grandfather has served his time in the bike trade, so he’s probably going to be cycling in the Vercors, or trundling happily in the South East of France.

He’s earned it.

MARGINAL PAINS FORCED OUR HAND, SAYS ANOTHER Opinion from an anonymous independent closure We have only been in business for six years, so I think we started in the ‘spike’. Since that time there has been an obvious increase in online sales, customers coming in to the shop telling us the prices online of the same product, customers actually buying online then calling into the shop to ‘see it in the flesh’. These methods seem, for many, to be the first choice.

Customer attitudes are changing to the point that some actually think they are doing you a favour by frequenting your shop. The money made in the shop has been from the servicing side only.

However, with the increase in minimum wage, even this has been difficult. We completely believe that people should earn more than they can claim in benefit, but the reality is that if businesses can’t pay an increasing minimum wage there will be no jobs.

The town that we are in is not unusual and sees retail outlets closing everywhere. I don’t think that the ‘shopping experience’, as such, is really there anymore.

Cycle to work vouchers have seen the shop losing between 10 and 15% on the retail price of the bike, which cuts massively in an already squeezed profit margin.

We’re witnessing the start of a click and collect world for an increasing number of bike brands.

I suspect shops will struggle to pay staff, rates and utilities if they are making pennies on commission in this way.

Many online retailers often don’t have half of the stock that they say they have, (reps advise us of this) but they lure customers in and seduce them with offers – which they can do with the bulk buying they are capable of doing.

In September 2017, I emailed an area rep about a bike that we were buying in the spring of 2018, which has already shown on an online website (not reduced) but marketed as ‘clearance’. His answer was that there was nothing they could do about it. I don’t believe that this is true, the powers that be will sell to whomever they chose.

There is a bigger retailer we have an eye on for research purposes and since they opened 18 months ago all they have had on their social media is sales, freebies and more sales.

I think the one man band type shops may manage to stay open and eventually, by being the last man standing, will make a decent living. Maybe down south it may be a better situation, but in this town and maybe other small towns like it, I would say that retail is for the very brave. Our view is that we have learned more than we could ever have been told about retail, so we are thankful for the experience all the same.

Team Cottingham Cycle Centre (left) had many successes over the years, including helping local talent score magazine covers via sponsorship.

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(( TRADE OPINION ))

The problem with trade shows is not trade shows Not immune from a changing global bicycle business, trade shows have found themselves facing the need to adapt. Industry commentator Rick Vosper, assesses visitor trends and big brand evacuation… as bike brands continue to leave.

Even after Trek announced its exodus in 2012, Eurobike attendance continued climbing to a high of almost 46,000 in 2015. It then declined to about 42,700 in 2016 and then 42,600 in 2017. Since 2012, the numbers show a loss of just under 3%. Relative to peak attendance, the drop is slightly over 9%.

Y

ou know the story. The bike industry’s biggest brands — and a lot of not-so-big brands, too — have taken their marbles and gone home, exiting trade shows on both sides of the Atlantic. First a trickle, then a hemorrhage.

Now some industry pundits are running around like headless chickens predicting imminent industry apocalypse.

Trade shows have become irrelevant, they shout, and smaller brands and retailers will be crushed in the process.

As far as I know no one has yet mentioned human sacrifice, or dogs and cats living together, but I’m sure that’s only a matter of time.

As is often the case, the demise of cycling trade shows is a much more complex and nuanced reality than the sound bites convey. So, let’s start by taking our hands off the panic button and skipping straight on to facts, focusing on the western hemisphere’s two largest events, Eurobike and Interbike.

The exodus of top-tier brands began in 2005 when Trek announced it would no longer be exhibiting at Interbike in favour of its house show, Trek World in Wisconsin. It did the same regarding Eurobike in 2012.

Specialized has enjoyed an on-again/off-again presence at Interbike since it created its first in-house dealer event in 1999 for the 2000 model year. The company formally announced in January 2014 that, aside from providing bikes for Interbike’s Demo and a small space for its water bottle business, it was leaving both Eurobike and Interbike.

The list of major bike brands no longer exhibiting at Eurobike now includes Pinarello, Cube, KTM/ZEG, Hebie and the entire Derby Cycles portfolio in addition to Trek and Specialized and others.

In terms of the top-tier bike brands no longer exhibiting at Interbike since 2000, it might be easier just to list the ones who haven’t. Except, practically speaking, there aren’t any.

THE ATTENDANCE NUMBERS MAY SURPRISE YOU When we look at Eurobike’s published results, we see only modest change in the number of industry attendees, even

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HARDLY A FALLING SKY SCENARIO Interbike is another story, and a harder one to tell. The show and its various owners (currently Emerald Expositions) has historically played a fast-paced game of threecard monte with attendance numbers. One year Interbike reports an increase in the number of retailers attending (almost always as a percentage); another year it’s floor space; still another, and it’s the number of retailer buyers.

When actual industry attendance is mentioned, it’s often in terms of increase over previous year. All too often no previous year’s numbers are available.

Regarding 2017, Interbike flat-out stated it would not report attendance numbers for either retailers or consumers that year, because parent company Emerald Expositions became publicly traded last spring. Consider the impact of this statement. It’s like publicly traded Apple suddenly refusing to report the number of iPhone it sells.

Or Facebook hiding behind its publicly traded status to announce that henceforth it would no longer disclose user figures.

“If that’s Emerald’s new policy, let’s call it what it is: a bunch of hooey.” That’s Bicycle Retailer and Industry News co-founder Marc Sani talking, in his Grapevine column from the December issue of BR&IN. (Disclaimer: The section begins by quoting me from a Facebook post, using much the same text as the previous paragraph).

Kudos to Mr. Sani for getting out his research shovel and digging his way through the hooey-pile. “So what about Interbike’s final gig in Vegas?” he asks. “Emerald sells data about Interbike attendees through Global Expo, a services company. And Global pimps out that list via email all the time. For a few bucks you can buy the company’s name, URL, contact, title, phone, email, address, industry type, SIC code and social media from at least 11,652 Interbike attendees.”

Plug that 11,652 number into what we’ve been able to learn about Interbike attendance over time and (assuming it’s correct) an interesting picture begins to emerge. From its stated high of 25,536 in 2012, Interbike attendance has plummeted by more than half in the past five years.

No wonder that show manager Pat Hus would only say of the 2017 Interbike, “We feared that it could have been much worse”.

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(( MANAGING FINANCE ))

FINANCE WORKSHOP #4: Offering customers more flexible payment terms IN the fourth workshop of the series, ACT takes a look at how getting FCA authorised can help reduce the retailers subsidy cost and offer customers more flexible payment terms.

Giving customers the option to spread the cost of a bike and accessories is a proven way to grow sales, but being able to offer more flexible payment terms could be key to realising the true potential of finance in your business.

Hundreds of bike shops are already offering unregulated finance, without the need for FCA authorisation (previously known as a Consumer Credit Licence, or CCL). Whilst this is a really simple way for businesses to try their hand at finance, they are restricted to offering 0% finance up to 12 months. By applying for FCA authorisation businesses will be able to offer more flexible payment terms – with loan lengths up to 48 months and APRs ranging from 0% to 15.9%.

THE BENEFITS OF FCA AUTHORISATION OFFER MORE THAN JUST 0% FINANCE Getting FCA authorisation allows you to offer more than just 0% finance. 4.9%, 9.9% and 15.9% APR can all be used alongside 0% finance when you become FCA authorised, but knowing when to use each APR option can be key to making the most of finance.

Vary interest rates to suit the product, the customer and you; an APR of 15.9% (payable by the customer) is better than the rate charged by many credit cards and is completely free of charge to the retailer, protecting your margin.

Use 0% to clear old stock or to attract customers to higher margin products.

CUSTOMER EXAMPLE Interest rate

15.9% over 24 months

0% over 12 months

Bike cost

£1,200

£1,200

Deposit

£120

£120

Customer’s monthly payment

£52.29

£90

Cost to retailer

£0

£89.10

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FLEXIBLE PAYMENT TERMS Giving customers the option to spread the cost over a longer period of time will reduce their monthly payments.

Payment terms for the customer can range from 6 to 48 months with FCA authorisation. Without FCA authorisation the maximum term is 12 months.

Customers nowadays are used to paying for things monthly - from phone contracts to car insurance. So, when given the option, many customers would prefer to pay over 48 months on a slightly higher APR than 12 months on 0% APR as their monthly payment will be significantly less.

REDUCED COST TO THE RETAILER Retailers pay a subsidy on most customer loans, but the higher the APR for the customer, the lower the retailer subsidy cost – which means you protect your margins.

When you only offer 0% finance up to 12 months you either have to accept that your margins will be affected by the subsidy cost, or restrict the products you offer finance on. By offering the full range of finance options you can introduce interest-bearing options on products with a lower margin, such as already discounted stock.

BUY NOW PAY LATER As well as a range of APRs and payment terms, FCA authorisation allows you to access the Buy Now Pay Later option, giving your customer even more choice!

The opportunity to defer payment is a great way to make larger purchases more attractive. With this option, customers can take the product away the same day and get up to 6 months payment-free, after which they pay back in interest free monthly repayments, just like they would with standard retail finance.

IT PAYS FOR ITSELF It costs just £100 to apply for FCA authorisation with a yearly fee of circa £145. Sell just two bikes a year on 15.9% finance and you’ll have saved the equivalent cost in subsidy fees vs 0% finance! lf Contact the ACT on 01273 427 700 email info@theact.org.uk to get started.

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(( TRADE OPINION ))

R

HOW MORE SHARING MIGHT BE THE KEY TO HELPING THE CYCLING INDUSTRY SWIM NOT SINK WORDS: Ed Willis, Sports Marketing Surveys

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oger H. Lincoln wrote, “There are two rules for success.

1: Never tell everything you know”.

Lincoln’s is an amusing quotation, but is it actually good advice? Google the author and you will mostly find two things: the quote just shared with you and searches for, “who is Roger H. Lincoln?”

If his maxim is as sage as it is pithy, why isn’t the author plastered over the Internet in glory? With the greatest respect to our friend Roger, might it not be bad advice? Could it actually be the case that more sharing is exactly what the cycling industry needs?

To say that the cycling industry is short on accurate sell-through and sales performance data is akin to saying that the Titanic sank just ‘short’ of its destination. It is an understatement of the first order.

In its introduction to the Great Britain section of its annual European cycling market report, CONEBI caveats that, “the UK has no quantified source of information on annual retail sales of bikes, parts, accessories or clothing, either in terms of units or value.” Compare this with other major cycling markets and the gulf becomes clear, with most of the UK’s European cousins able to track, with some degree of accuracy, the ebb and flow of different categories in the cycling industry in terms of both volume and value.

This kind of information, when robustly collected and astutely analysed, can become a buoyancy aid for the entire cycling trade, allowing federations and groups to take firm cases to government or industry when appealing for favourable laws or outside investment. It allows retailers to contextualise their performance against national trends, identify strong performing brands or categories and adapt accordingly. The same information allows brands to keep track of what products consumers and retailers are choosing and understand where future

SPORTS MARKETING SURVEYS INC. (SMS INC.), offers detailed reports on cycling and is also available to discuss bespoke projects. SMS INC. is a full-service market research company serving the sport and leisure industry. Please contact Edward Willis at ed.willis@sportsmarketingsurveysinc.com for more information.

growth might evolve. In short, it can allow everyone to observe consumer demand and the state of the industry from the perspective of a panorama rather than a porthole.

This is the kind of information relied upon by marketers and managers in other industries. For example, industries such as FMCG, retail or automobile have historically been particularly prolific and proactive users of data to track and improve their marketing activities.

Now as techniques and technologies advance and the size of data pools grows, the complexity and applicability of data continues to increase, leading to new insights, faster harnessing of new opportunities in different categories and better longterm strategic planning.

These kinds of techniques are making it easier and more cost effective to share better data for the good of all sides of the industry, whether that be through monitoring shipments sold into market from brands, or sell-through data at retail level.

However, the practice of sharing goes beyond actually reaching out to others in the industry with advice or questions. Sharing is a mind-set and an instinct as much as it is a matter of data transfer and aggregation.

Thinking not just outside the box, but also about how other people are operating is crucial to the future of the cycling industry.

Cycling buyers have been slightly slower to turn online than buyers of less expensive, more regular items.

However, the flow is unidirectional, and as shoppers move online there are lessons for cycling to learn from other industries. For bricks and mortar stores this might mean thinking about new ways to think about getting cyclists through the door by offering services and service that online stores cannot match. As other industries are finding, shopping will need to become an experience, and shops a destination if retailers wish to draw people away from online.

At the most simple level this might

How often do you pair a chargeable service to a sale?

“OUR INTERNATIONAL CYCLING BEHAVIOUR STUDY SUGGESTS THAT THE ABILITY TO TEST RIDE PRIOR TO BUYING IS THE SINGLE MOST LIKELY FACTOR TO CONVINCE A CUSTOMER TO BUY AN ALTERNATIVE BRAND OF BIKE.” mean offering, for example, a range of bicycles to test. Our International Cycling Behaviour study suggests that the ability to test ride a bike prior to buying is the single most likely factor to convince a customer to buy an alternative brand of bike. This may also be important in convincing people to choose new types of bikes.

As e-Bike adoption advances for example, putting someone on a demo unit may become the best way to prove the value of what is an expensive purchase. Offering in-demand products that are not available online is another simple technique that may help retailers stand out. Likewise, offering to improve the purchase decision process can be a powerful pull. Take running stores, many of which have installed treadmill and gait analysis to improve outcomes for buyers and draw people back to physical stores.

Bricks and mortar retailers may

not be able to compete with online outlets on average prices, but they may be able to identify goods, price match these online and advertise the fact that their store is cheaper, or as cheap, on certain named products.

Certain retailers in the technology industry for example, are already monitoring competitor prices to prove to customers that products cannot be bought more cheaply online. If this means lowering prices on certain products, then the same retailers hope to neutralise the impact by selling more ancillary services, like repairs, or coffee.

Cycling shops have an obvious and beneficial service here – workshop repairs.

Defying Roger H. Lincoln and sharing requires both learning from examples in the shared world and also sharing insight, advice and data. The rising tide might just lift all boats.

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(( TRADE OPINION ))

RELATIONSHIP COUNSELLING You may have noticed it; a now empowered consumer has seemingly set new rules on interaction between themselves and retailers.

So how to respond to this new age customer? Winged Wheel’s Mike Reisenleiter talks us through a new sales process…

I

often notice examples of people forgetting how the balance of power in consumer-retailer interactions has changed in recent years. This time, it was a Facebook post on the World Bicycle Mechanics Forum: “For the first time in nine years of business, I fired a customer.” I read through the whole post and over fifty of the comments. I stopped when I realised the comments were coming in faster than I could read them. Here are a couple of key bits from the original post. You can find the rest in the forum:

• “I quoted him MSRP plus labour, he told me that the quote wasn't even in the ball park...”

• “After he committed to this other source, he mentioned that he really wanted to support my shop...”

• “I fully expect to get a negative review online after I expressed my frustration” • “He seemed to really enjoy my attitude prior to the quote, again, we had a great rapport established.”

After reading, I felt really bad for both the consumer and retailer.

It isn’t the first time I had felt this way and it won’t be the last. This is the age of the empowered consumer.

Early last year, the World Economic Forum published a great report talking about how the next decade is

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going to be a “Golden Age of the Consumer.” Consumers will have a greater range of choices and more control over their purchases than ever before. The report details how consumers place values in new factors of a purchase, how loyalty is low and how consumers need guides to sort through the massive amount of information.

With all the increased choices and benefits, empowered consumers have greater leverage than ever before, while manufacturers, suppliers and retailers have less.

Let’s use an analogy. The traditional channel for products used to be like a single pipeline of water, flowing from the manufacturer, through the distributor and the retailer, finally ending at the consumer. This meant that those upstream controlled the game. Today, the new channel is more like an ocean: a massive body of water with flows coming in from countless streams and currents moving in every direction. This combination of abundance and chaos takes control from the upstream suppliers; giving the consumer the power to be selective in their purchases.

With our pipeline analogy, consumers made a decision about the value of a product or service based on three things alone: cost, choice and convenience. To a traditional consumer, these were the only three things that seemed

flexible. Our modern, empowered consumer has an ocean of choices with falling costs and massive increases in convenience. With so many products and services, consumers increasingly decide value based on factors beyond the traditional options of cost, choice and convenience. New factors that consumers regularly weigh include the buying experience, their internal belief system and their control of the transaction.

As demonstrated by the Facebook post at the start of our story, many businesses have struggled to satisfy and retain these empowered consumers. The retailers and suppliers are competing for a consumer’s attention and we find ourselves in a world where consumer loyalty is nearing all-time lows. As evidence, more than 50% of consumers have changed a provider of a major service in the last year. Even among consumers who identify as loyal to a specific brand, over one third will spend the same amount (or more!) with a competing brand.

Further evidence of low consumer loyalty exists in the very programs that bear the ‘loyalty’ name. When polled, consumers frequently view loyalty programs as a way for brands to show loyalty to their customers. Of course, the businesses who started these same loyalty programs state the goal is to do the exact opposite: they feel their loyalty program keeps the consumer loyal to their brand!

In addition, this overwhelming amount of information makes it incredibly difficult for consumers to make a purchasing decision. This is where empowered consumers love to have a trusted customer service guide. This guide can often be user-generated reviews, a friend who is an expert in the subject matter or the retail staff. The purpose is to help the empowered consumer sort through the information and identify what products/services fit the consumer’s unique situation in order that they can decide for themselves what is best.

Empowered consumers have more choices than ever.

They expect businesses to express loyalty to the consumer, and love guides who can help them make decisions. As I like to point out, this consumer looks more like you than you might realise. What are the keys to succeeding with the empowered consumer? Here are three:

SWALLOW YOUR PRIDE. I’ll use an analogy that every cyclist can understand: when cycling in traffic, you can both be right and be dead.

In retail, that means keeping your ego out of any transaction and never taking it personally. For our Facebook poster, when the consumer says they want to do business with you despite the price gap, this is the time to be humble. The consumer isn’t here for you; rather you need to serve them. Be selfless. Focus on the consumer and their needs first. Stop talking. Listen closely.

BE LOYAL TO YOUR CONSUMER. As a retailer, you’re at a disadvantage and that is okay. Be willing to celebrate the purchasing decisions the consumer made, even if it doesn’t include you. If they buy a bike online, celebrate and remind them of your fit services. If they show up on the group ride in a jersey from another store, be happy for them. Even though consumer loyalty is low, we should not misunderstand and simply say consumers cannot be retained. In fact, consumers who are actively engaged with a brand buy nearly twice as often and spend 60% more per transaction. Consumers are proving time and again they have a pattern: they research heavily and seek out partners who help guide them to what is right for their unique situation. If you serve the consumer selflessly, they will become an advocate for you to their networks.

BE EMPATHETIC. Even though it can be unpleasant to be haggled or showroomed, don’t forget this important point: if you have ever bought anything on price, then you are no different than the consumer you are serving. Price matters, but it is rarely the only consideration. Find out what it takes to get the business and focus on added value rather than price.

Is there something important beyond price? What will it take to win the business? Finally, if you have to say ‘no’ to a transaction, be absolutely sure you leave the door open to still say ‘yes’ to the person.

Would these three things have saved the consumer and retailer in our Facebook post? Read the post and judge for yourself. There are no guarantees. The consumer and retailer may never have seen eye-to-eye on the bike sale.

However, I wager these three points would have helped the two sides to stand down. Which would have saved, rather than ruined, a customer relationship.

About the author...

Mike Reisenleiter brings 20+ years’ experience in product development, business operations, global sales, marketing and retail. Today he serves the trade under the Winged Wheel Development banner where he helps outdoor businesses — big and small — to better connect, inform, and actively engage with their customers.

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(( BRAND PROFILE ))

PERFECTLY PERCHED? To kick off 2018 Chicken Cyclekit announced the addition of Prologo, a saddle brand that brings to the bricks and mortar bike shop tools to create a customer for life.

Sitting comfortably? Here Alex Rowling explains the MyOwn sales opportunity…

WHY IS IT IMPORTANT FOR THE MODERN BIKE DEALER TO PROVIDE A SADDLE FITTING SERVICE? Whether someone rides a modest mileage or 100 miles a week, the saddle is one of the most important components to get right. Therefore, ensuring your customer is comfortable on their bike should be a priority for retailers. Additionally, services like saddle fittings can’t be offered online, so it can be used as something to drive footfall and further sales in-store.

WHAT DATA DOES THE DEALER RETAIN FROM A FIT? The data captured from the saddle fit is going to be used to sell a Prologo saddle as most of the information is only relevant to saddle fitting. However, when the customer provides information about the kind of riding they do, the dealer can then cross-sell based on that information. The customer (if they agree) could be contacted regarding promotions or product info based on the type of riding they do and the cycling they are interested in. Also, on completing a saddle fit you have a customer who’s satisfied with their saddle purchase, they’re likely to return as they’ve received great value from the service you’ve provided.

WHAT TRAINING IS REQUIRED TO OFFER THIS SERVICE? Literature is provided with each fitting kit, but to give complete confidence in the system our account managers provide MyOwn training for staff. There are also videos on the MyOwn system, which aid the dealer in fitting a saddle. They’re great for educating customers if you have a TV or computer/tablet in-store.

TELL US ABOUT THE SCIENCE BEHIND MYOWN: The MyOwn set up was created in collaboration with University Biomechanical programs, Pro Tour rider feedback and years of saddle development by Prologo.

We believe we have the best solution to saddle fitment backed by science, not marketing hype. Everyone is unique and has a unique body shape. Other systems say, “you’re this flexible therefore…”, but this is no longer adequate. The MyOwn system takes the necessary biomechanical information and translates that into the optimum fitting saddle. We are the only system that records correct Ischial Tuberosity dimension and Sacroiliac Joint flexibility, unlike many rival systems that simply

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estimate these measurements. This is the key to making an accurate saddle recommendation.

MyOwn has been developed using proven anatomical and biomechanical sciences at its foundation. That said, the most important factor is to understand that the method of measurement and the documentation behind the science is always developing. The more data Prologo receives, the more accurate the science becomes.

WHAT CAN A DEALER EARN ON A TYPICAL SALE? Stockists and MyOwn dealers are offered preferential rates that are market leading for this level of saddle.

We’ve always strived to develop IBD-exclusive initiatives, whether that’s something service led like the Prologo MyOwn system or IBD-exclusives such as the Deda or Miche wheel test centre programme that gives the opportunity to offer something online retailers cannot.

WHAT’S A DEALER GOT TO DO TO BENEFIT FROM THE FITTING STATION AND POS? We offer an excellent package that gives the fitting system free of charge, alongside compact and useable POS to display in store. The stockist package includes a range of saddles to cover the most popular outcomes of saddle fitment. Anything not in stock can be with the store the next day. There are 181 SKUs, all accessible via Chicken.

We will offer a range of test saddles to give to customers if that is the method of promotion preferred.

WHAT WARRANTY IS OFFERED ON FITTED SADDLES? We offer three years on all models. We also offer a 40day money back guarantee to give the retailer and consumer complete confidence.

IN TERMS OF TECHNOLOGY UNIQUE TO THE PROLOGO BRAND, WHAT EXISTS AND WHAT ARE THE BENEFITS? Something that sets apart Prologo saddles from the rest of the market is CPC technology. CPC (Connect Power Control) is a material used all over the world in many industries, notably in the military and motorsport where immense grip is needed. CPC is a special 3D nano-polymer patented for use on bicycle saddles by Prologo. It allows for 10% greater airflow and heat reduction compared to normal saddles. The shock absorption is increased by 10%, while the grip and position control is increased by 15%.

Smarter workshops

elvedes (ell-vee-dez) 1. Netherlands based manufacturer of bike components. 2. Providers of an extremely broad and comprehensive range of premium quality cable and brake components.

Q

Bearings

Hydro systems

Q

High precision sealed bearings

FREE

Q

Hydro hose

Workshop displays* Transit workshop display

Cable parts & tools

Q

6 colour endcaps assortment box

Aerostream

Q

Disc brake pads

Endcap crimping tool

White compound

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Rim brake pads All-in-one mobile display frame. Workshop displays compactly arranged.

Cable pricker

Component displays also available individually. *Minimum stock purchase required.

Developed by

For the full ‘Elvedes’ experience visit www.elvedes.com

DISTRIBUTED IN THE UK BY:

0845 0508 500 sales@thecycledivision.com thecycledivision.com

(( FOCUS ON... ONLINE SHOP WINDOWS ))

When was the last time you tidied your shop, rearranged the bikes on the floor or shuffled the stock on the walls? Within the last few weeks, I bet.

When was the last time you added some fresh content to your website homepage, or posted a news article, or updated your product listings? This month, last month, or maybe even last year?

Ask yourself; does your web portal honestly reflect your business? Have you put effort into keeping your shop

current and on-trend, but entirely ignored your site? If so, all that work you've put into the store will amount to little.

Why? Because over 80%, in fact well over 80%, of your new and existing customers will visit your website first, and use this as a determining factor whether to cross your threshold or not.

With this in mind, we've gathered together five tips for using your site to drive footfall to your shop, not an online competitor.

WORDS: Steve Baskerville, Caffeine Injection.

1

YOUR HOMEPAGE EXISTS TO PROMOTE YOUR BUSINESS, NOT YOUR SUPPLIER'S BRANDS.

By far the biggest trap most IBDs fall into when it comes to websites is filling the homepage with rows and rows of pictures of the products they sell.

Unless you're selling a unique item that is only available from you, this practice does nothing to drive footfall; it is merely free marketing for the brands, which can be bought from any number of retailers at, let's be honest, lower prices than yours.

From now on, start to think of your homepage as your prime retail space. If a brand wants their products on it, they need to make it worth your while. Otherwise, use it to sell your services, not their products.

2

NO MORE WHITE BACKGROUNDS.

Despite the opening point, there is a case for occasionally featuring products on the homepage, but don't be lazy. If you're promoting Bike X don't just use the stock side shot with white background. It's dull, predictable and on many other websites.

Boring stock images inspire no one; brands produce them for product catalogues, not marketing. Photos on your homepage should be exciting and create desire, so go and hunt around the brand's website until you find something suitable, then ask permission to use it.

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Most will agree immediately, but won't be able to supply it, so just right click on the image on the page and select "Save image".

If you're feeling artistic, throw the image into Photoshop and drop your shop logo into a corner. While you're at it, add some colour flashes here and there too. Small tricks like this give your site a more corporate professional feel and set it apart from the rest.

“FROM NOW ON, START TO THINK OF YOUR HOMEPAGE AS YOUR PRIME RETAIL SPACE.”

3

INSTAGRAM IT, BABY!

Now that you have a crisp “lifestyle” image of Bike X with your shop logo and colour scheme added you need to social media the life out of it.

What? You don't do Instagram because you don't see the point?

Social networks are not there to sell from; they're there to keep your brand in front of new and existing customers. You might not see the point in them,

“Can I try these wheels?”

GIVE YOUR CUSTOMERS THE ANSWER THEY WANT TO HEAR, JOIN OUR DEDA ELEMENTI WHEEL TEST CENTRE SCHEME

WHY BECOME A TEST CENTRE? • • • •

Wheelsets are EXCLUSIVE to Independent Bike Dealers - a great reason for customers to visit your store Demo wheelsets include 38mm carbon clinchers, 30mm carbon disc and alloy clinchers Option to loan 88mm and 45mm SL Tubular wheelsets for demo use Free of charge POS, plus spare brake pads and Campagnolo/Shimano freehub bodies all included

FOR MORE DETAILS PLEASE CONTACT US ON 01525 381347

(( FOCUS ON... ONLINE SHOP WINDOWS ))

but your competitors do. And they are gunning for your customers, so you have to join the party.

Now that you have some sharp images, you've got ready-made content to post them with.

One essential key to social networks is consistency. Don't have one message on your website and another on Facebook. Keep all your platforms on message; saying the same thing at the same time.

The other essential function of social media is backlinks, which brings us on to point No.4.

4

BACKLINKS.

There is an old saying in the IBD game; it's easy to be a busy fool. The same can be said in the social network world when it comes to retailers. Too many spend most of their online time reposting content from magazines, brands and suppliers – often with no additional comments added and almost never with a backlink to their site.

So again, as with the homepage full of your supplier's products, all your social media activity is doing is driving traffic to someone else’s business. Being that most magazine websites contain adverts from other sellers for the products they're featuring, you are actively pushing your followers, your customers, into the hands of your competitors.

When you see an engaging post online that you want to share, edit the content to add a link to your website as an absolute minimum.

If you want to ramp things up a bit, rewrite the content mentioning the initial post, but also promoting your business as a place to try and buy the product or service.

Again, add a link to your site.

Finally, if you want to do the job properly, take the concept of the original post and turn it into a news article for your website, then post or repost with a link to it. Obviously, you need to be careful you don't get accused of plagiarism, but bear in mind that most online magazine articles and social media posts are little more than rehashed press releases, so don't copy it word for word, but don't be afraid to include some of the leading points either.

The thing to ask yourself every time you're about to post or repost to a social network is, to whom will this drive traffic? Because when it comes to the social networks, website traffic is the name of the game.

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5

BLOG POSTS & NEWS ARTICLES.

Back at the start of the website revolution, everyone and their dog had a blog. No one knew why they blogged. For some, it was a way of getting their news out there, for others it was a way of being heard, but then the social networks came along. A savvy few soon realised that if they regularly published news articles about the products sold and the services offered they soon started to shoot up the search engine rankings.

You see blog posts and news articles tend to contain the name of the product or service written about, in context and often with geographical references. If you practice what we talked about in point 4, backlinks are included too.

Which means you've ticked Google’s main boxes and are on the way to improved search engine rankings.

Blogs, news, call it what you want – your website must have something embedded right in your site on the same domain.

Ideally content should come weekly, or monthly at a minimum. As we said in point 4, link to it on social media.

MATTE EDITION shot P E R F O R M A N C E , C R A F T S M A N S H I P A N D I TA L I A N S T Y L E

ask the boss

COLIN WILLIAMS, MD AT FLi DISTRIBUTION

We often ask retailers and manufacturers their thoughts on the industry and its evolution, but what about the middlemen? This month we pin down Colin Williams, Managing Director at FLi Distribution to ask his thoughts on some topical trade discussions: Once the boom has settled, what do you envisage the electric market to look like?

It’s hard to predict, as it doesn't feel like any development the industry has experienced previously. I have a feeling it'll evolve to look like the existing market, with a range of retail styles and avenues to market, servicing customers at different price points and different needs from their e-Bike. The market will have taken sales from traditional bicycles and motorbikes, but also found new customers who would never have bought from the traditional markets for a host of reasons. The main difference I predict will be fewer online sales. This has to be good for the industry.

Providing there are no negative impacts from legislation, I can see a situation where e-Bike sales out number traditional bike sales at most price points in the not too distant future, because for most customers they make a lot of sense.

One of the main issues with the UK market is that we're focused on cycling as a sport, not as a form of transport. E-Bikes make a lot of sense as a form of transport and a toy. If we can get over this perception hurdle the future looks great. If the independents get on board there is good money to be made without a lot of the issues selling traditional bikes suffer from.

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How big a presence might e-MTB command in the market?

Like off shoots of traditional cycling, some will stay niche, while others will flourish. I can see e-MTB being a really big thing because for most mountain bikers there’s no downside.

You’ll ride farther, longer and higher.

If you're spending big money on an MTB an e-MTB really isn't much of a price difference.

We've seen a host of specialist shops set up around the UK as they strive to meet the market needs. Historically, the traditional cycle shop hasn't wanted to get involved with e-Bikes. This has definitely changed in the past 18 to 24 months as more people realise there is money to be made. It feels like the early 90s when MTB was just emerging.

What can we do to profile raise e-Bikes?

The silver bullet for the UK isn't far off, but it’s slow moving. I'm not sure rushing it would be positive in the long run. I also suspect it will involve more than one shot being fired, or perhaps we need a blunderbuss approach. Once the big volume bike brands and large retailers with the big budgets get involved in a more serious way there will be more bikes on shop floors, more marketing spend and more sales. It does feel as though we're in a positive spiral with eBikes at the moment, more sales will lead to more sales. It’s not like 10 years ago when e-Bikes were a horrible unreliable product.

The boost could also come from the Government, with its rumoured tax break scheme having the potential to have a huge impact. Any increased investment in cycling infrastructure is also obviously key.

To what extent does the proliferation of dockless bike share stand to either improve or dent sales?

The potential market is huge, so we needn’t worry about a tiny percentage not buying bikes because they have bike share access. I'd hope to see it having a positive impact in opening non-cyclists to the idea of using bikes for short distance journeys. It'll also show urban planners that cycling is a form of transport that needs to be taken seriously. As we know more cyclists on the roads means more people consider it as an option.

Should bike shops revise their labour price lists for e-Bike servicing?

The level of knowledge needed for selling and servicing e-Bikes shouldn't be seen as an obstacle, it’s an opportunity that is the next logical step for many staff and not just the mechanics. This detailed knowledge and support, along with test rides and servicing gives shops a service for customers that the Internet cannot provide. More generally, I'm sure we've been under valuing workshop time as an industry for too long, and the rise in eBike sales is a chance to start afresh.

www.raleighb2b.co.uk