CIN issue 004 2017

ADVANCED TECHNOLOGY / MECHANICAL PRECISION

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from the editor LEAVING A LASTING IMPRESSION...

NOW this is going to sound sad, but I’ve decided this month that the measure of a good bike shop is whether I’m still thinking about the experience the day after my visit.

In this, our Q4 edition, we’ve a number of features that will talk about tapping into the mindsets of millennials like myself and Baby Boomers with their longer attention spans and often bigger budgets. It’s interesting to note that the reverse can be true, of course. How many times have you served a Baby Boomer customer quickly and with little damage to your valuable man hours? The Millennial, meanwhile, may be much more prone to haggling, not just because of the typically limited budgets, but because they think they know it all. And in some cases they know too much, because the world is in their palm 24/7. If there’s one thing worse than, “my mate said”, it’s, “someone on a forum told me”.

The old adage ‘time is money’ has never been so acutely in focus and so choosing which battles to set up your store to fight is a fundamental consideration.

Never before has profit per square foot of store space been so crucial to buying decisions. Research carried in our Q2 Journal indicated that it was clothing and footwear that the IBD market felt most at risk of having floor space chopped in favour of higher net margin items. Anecdotally, as MY18 product is made room for we have seen a fair few cut-price clothing sales.

But it’s not just sensible stock consideration that has struck a chord when chatting with independents this month. Setting your store up to maximise margins is one thing, but selling at full ticket isn’t something the bike industry can confidently say it has down to a tee. But can this be designed into a store too? Why would customers get funny looks when asking for a discount in John Lewis, but perhaps be entertained in their local bike shop?

It comes down to appearance, from my observations. Having spent some time in London Boutique Velorution this year I’ve yet to see a customer haggle. Now this could be down to the affluent BBC-neighbouring postcode, but it could also be due to the retail experience aligning with those seen in customer-service led high street shops. As with Rutland Cycling, featured on page 28 of this issue, customers are met within a minute or two of entering. Listening to the customer is central to the sales pitch, but being prepared for what they may say next is even more so.

To emphasise the point I shall pinch a note from Donny Perry’s Leading Out Retail, another feature of this month’s magazine. “I have seen X bike on the internet and it was X price,” says the customer. Now at that point you could swear under your breath, or you could ask, “Now what did you like about that bike and why?” This takes the customer’s focus offline and back into your store, with the answer providing you with the ammunition to sell and perhaps correct the customer’s preconceptions.

I hope you’ll take away a number of points from this issue to think on, certainly pulling it together has inspired the CI.N team to think deeper about human behaviours and how the bike business can effectively tune in to the customer of the future.

Mark Sutton @CyclingIndustry @MarkSuttonBike mark@cyclingindustry.news www.cyclingindustry.news

Publisher

Jerry Ramsdale jerry@cyclingindustry.news Editor

Mark Sutton mark@cyclingindustry.news Sales Executive

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

Luke Wikner luke@cyclingindustry.news Published by

Stag Publications Ltd 18 Alban Park, Hatfield Road St.Albans AL4 0JJ t +44 (0)1727 739160 e info@cyclingindustry.news w cyclingindustry.news ©2017 Stag Publications. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior permission of the publisher. The Publisher cannot be held responsible or in any way liable for errors or omissions during input or printing of any material supplied or contained herein. The Publisher also cannot be held liable for any claims made by advertisers or in contributions from individuals or companies submitted for inclusion within this publication. The opinions expressed are not necessarily those of the Editor or of Stag Publications Ltd.

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

the professionals WORKING OUT THE WORKSHOP For most, the workshop is an increasingly important segment of the bike retail business, in particular when it comes to margin retention. With that in mind, CI.N thought it was about time we benchmarked the trade’s feeling on pricing, presentation and workshop staff wages.

Roman Magula London Green Cycles

Neil Holman George Halls Cycle Centre

1: How much investment from training to tooling has gone into your workshop?

Roman Magula, London Green Cycles A guess would place our investment at around £1,000 per annum on workshop tooling and furniture, excluding the initial setup cost.

Alan Shaw, Garage Bikes Without being flippant, all of our investment. Our youngest mechanic has just finished her Cytech 2 and our senior mechanic is just starting Cytech 3. Most months we’re refreshing spanners/allen keys or having to buy something or other.

I’m quite guilty of ‘tool tart syndrome,’ I’ll almost always buy a tool to make the job easier, if it exists. Last year we surrendered a large chunk of retail space to put our second workshop in. This one is open plan just like the original one.

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Alan Shaw Garage Bikes

Howard Wagstaff, Pedal and Spoke Not a huge amount as servicing isn’t a big percentage of our revenue. We have Santa Cruz tools and that’s mainly it.

David Lucas, Bike Spanner It’s hard to be precise as the tools are built up over the years and being in Northern Ireland we don’t have easy access to the recognised training courses. We’re insured for £15k of workshop equipment, which I think would cover a complete refit if the place burned down.

Neil Holman, George Halls Cycle Centre Being in a commuter-heavy small market town we get to see lots of different brands. If I had to put a price on it, I would say our average yearly spend on new tools has to be between £200 and £1,000.

As for training, we now watch YouTube videos, but having said that we are taking on an ATG apprentice

Howard Wagstaff Pedal and Spoke

David Lucas Bike Spanner

again, so that is £1,000 up front, plus the kid’s wages.

2: Do you have workshop tariffs on display in store or are jobs quoted on arrival?

Roman Magula, London Green Cycles We try to offer both, plus a prominent listing on the website, though a lot of jobs are charged on a per hour basis.

Alan Shaw, Garage Bikes Both. We have pub-esque black boards with our fixed prices prominently displayed as you enter the shop. We also give the bike a quick look over, discuss with customers then give them the top sheet of a carbon copy job book with the estimate written down.

Howard Wagstaff, Pedal and Spoke We have set pricing, but also offer quotations on arrival.

David Lucas, Bike Spanner Absolutely. We push very hard the fact that our pricing is 100% transparent. We have very detailed pricing listed on our website and these are replicated in-store. Upon inspection, we use an automated menu system whereby we add all the required jobs and the prices are auto filled, with upcharges (for internal cables, etc.) added automatically. At the end of the inspection, a job sheet is produced and mailed to the client if they decide to progress with the job. They are then sent regular updates and a final job sheet once complete.

Neil Holman, George Halls Cycle Centre Both. We have a printed workshop guide price list, including VAT and then when customers bring their bicycles in we can access the state of it and give them a closer quote.

3. Tell us about your pricing structures and how you arrive at a value for each?

Roman Magula, London Green Cycles Our basic service comes in at £30, while a more in depth general service will cost £70. Of course we work on cargo bikes often, so it can be more involved.

We also charge cable operated

brake servicing at £20 a pair, gear servicing at £20, as well as bottom bracket or fork replacement at £20, among other services.

Howard Wagstaff, Pedal and Spoke Pricing was taken based upon other shops’ tariffs, then made a little cheaper. We don’t have the big overheads and don’t feel the need to charge through the roof. We do struggle with people turning up and wanting brake and reverb bleeds done there and then, though. Plus them watching over us and telling us what goes where!

Alan Shaw, Garage Bikes Truthfully, it’s mostly gut feeling and knowing what the local market will stand. There is very little local variation between my nearest other shops.

David Lucas, Bike Spanner Initially all tasks are timed and our standard hourly rate is applied. Then multipliers are added depending on the skillset and special tooling required. We then bundle these tasks together to create our set service plans, with a discount applied if the time taken reduces because it’s being done at the same time as another task. So, for instance, it’s £15 for a tube replacement, but if we’re doing this at the

same time as a wheel true, the cost is lower because the wheel is already off the bike and stripped of its tyre.

We regularly review the time taken to perform each task and the cost adjusted accordingly. For instance at the moment cable changes on 105 and Ultregra equipped bikes are taking far longer than they used to because the cables often shed the coating fitted at the factory, thus blocking the cable stops, liners and shifters. So this task is starting to take significantly longer than it used to, therefore the price is about to go up.

Neil Holman, George Halls Cycle Centre We have three standard services.

Bronze at £25 labour, plus parts (service brakes & gears); Silver at £40 labour, plus parts (bike PDI) and Gold at £80 labour, plus parts (full strip down to the frame, clean, fresh grease in all bearings).

We decided on these prices after reading a question on a bike forum; someone posted a question, “How much would your LBS charge for this job?” At the time we had two service tiers; basic and full, and we had all the other jobs listed separately. I read the post and all the following answers.

Firstly I realised just how cheap

WWW.CYCLINGINDUSTRY.NEWS // 005

the professionals WORKING OUT THE WORKSHOP we were and secondly we needed to change our pricing structure.

4: Do you have any method for the customer to book work online?

Alan Shaw, Garage Bikes No we don’t. We have problems with no shows making the diary problematic as it is. I genuinely think the online anonymity problem would only make this more prevalent.

David Lucas, Bike Spanner Yes. The company that made and manages our website specialise in sites for cycle workshops, so we use one of its off the shelf websites. As standard it has a brilliant booking system whereby the customer can select the drop off and collection date, select what jobs they want to be done from a drop down list, or just list what needs to be done if they prefer. The site then sends us a completed job sheet that we then book onto our workshop system. The site costs us £30 a month and is a huge time saver for us.

Roman Magula, London Green Cycles Yes, we’ve online booking in place.

Neil Holman, George Halls Cycle Centre No, we don’t even have an in-house booking service. Customers can drop their bicycles off when they want and we work around that. Being in a small market town and on a Sustrans route too, we get lots of emergency on the spot repairs. The way we run it we can adapt to anything that comes through the door.

I worked for a company once that had a booking in service and the first day I worked for them, the workshop

006 // WWW.CYCLINGINDUSTRY.NEWS

manager showed me what they had booked in, he said that is two day’s work. They were done in four hours.

ping those, “It’ll only take you 5 minutes”, from jumping the queue have all been things we’ve had to implement.

5: Which extras do you charge for?

David Lucas, Bike Spanner The owner of Bike Spanner is obsessed with efficiencies, to the point we’ve arrived for work in the morning to find he’s been working through the night to test out a new workshop layout to reduce the amount each mechanic needs to move around whilst doing regular tasks. I recently watched the movie The Founder, it’s about the original owners of McDonalds. There is a scene where they keep rearranging the kitchen until it’s the most efficient it can be; this is our boss.

Other than that everything that can be automated is. We run a completely paperless system, everything works on two iMacs and a bunch of tablets, all networked together. During busy times we operate an “assembly line” type of system, whereby one person will be cleaning bikes, another re-cabling, another dealing with the wheels. It’s a great way to keep everyone working fast and as a team.

Being based in a shopping centre with a small customer facing workshop we have to do a lot of the work at other locations within the centre. So, when busy, we have one person whose sole task is to run the bikes around between these locations. This isn’t the most efficient, but it’s a needs must.

Alan Shaw, Garage Bikes Currently, just cleaning. But as we lose more retail sales to the internet we’re going to have to stop “throwing stuff in”. Things like V-brake lead pipes which are small ticket items we’ve often absorbed in the labour so that the repair goes out of the door absolutely top notch. Those all need to be accounted and charged for now.

David Lucas, Bike Spanner We levy a flat £0.50 charge on all work over £30 for consumables. This covers lube, gloves, cleaning products etc.

We also have a Pro-Clean service which adds £15 to the bill, yet means the customer gets back a gleaming bike. All bikes get a basic clean before being returned to the customer even if they don’t opt for a Pro-Clean.

Roman Magula, London Green Cycles None, though if the job takes longer to complete than anticipated we do charge accordingly.

Howard Wagstaff, Pedal and Spoke Nothing. We try to add all the little extras in to make the service seem as though we’ve gone above and beyond for the customer.

6: How have you improved your workshop efficiency in recent years?

Alan Shaw, Garage Bikes This has been essential to our business’s functionality. Running lean on stock, strict workshop diary and stop-

7: Should the industry be charging more for its servicing?

Alan Shaw, Garage Bikes Oh hell yes! We’ve been undercharging for years. We have a problem in

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the professionals WORKING OUT THE WORKSHOP the UK as most of the general public see bikes as just toys and certain segments of club riding think that we’re ripping them off because we’re, “only doing what they can do in the garage at home”. I do think as an industry we mostly charge too little. But I think there’s an attitude of not wanting to blink first and being seen as expensive.

David Lucas, Bike Spanner Is there an industry standard? I don’t think so. For instance, we charge £80 for a winter service and it includes a lot of tasks. Another local workshop charges £20 and it’s little more than a gear tune and lube. So it’s hard to assess actual prices because most workshops don’t advertise their individual task prices.

What I have found is that poor mechanics tend to massively over charge for what they do, believing, incorrectly, that the simple jobs they can do are actually really hard and so warrant a high price. Whereas the highly skilled mechanics tend to undercharge. I believe because they have been doing the job for a long time many simply got used to low pay.

To answer your question, I’d say historically the industry used to massively undervalue it’s servicing, but now with so many new entrants over the last few years it’s hard to tell if this is still the case. I recently saw a price list for a new workshop start up. I know the individual

involved has limited ability, but has been on a couple of courses and so has a few certificates. His pricing works out at about £50-60 an hour, which in my opinion is excessive.

Roman Magula, London Green Cycles I think there is an unusually great scope of prices across London’s bike workshops, which proves that there is demand and justification for both extremes, I’d consider that a healthy environment.

Howard Wagstaff, Pedal and Spoke I think it depends. Personally I think it’s very often quite expensive.

Neil Holman, George Halls Cycle Centre Yes, we work on £20 per hour.

Our trouble is the sheds and supermarkets have made the bicycle so cheap it has lost its worth. If you go to a car garage you expect to pay £50 for the mechanic just to pop the bonnet. You get a washing machine guy out and again expect to pay £25 just for the privilege. If you quote the average person £75 for a bicycle repair the comment that comes back is, “I can buy a new bike for that”.

be demanding much more in other industries. This is also true of all my local bike shops that have qualified and experienced mechanics of a high quality. Staff retention is already a problem industry-wide and is going to get much worse as costs of living rise, but the industry can’t fund wages to keep up. I sound like a broken record to anyone who will listen, but the manufacturers have a big part to play in solving these issues and it’s falling on deaf ears.

David Lucas, Bike Spanner It depends on the individual and the business they work for. I would say on balance wages are now in line with skillsets, but it wasn’t always the case.

Neil Holman, George Halls Cycle Centre I think our pay is very good. Mine are on under just £11 per hour. I look at advertised mechanic’s jobs and this wage is more than a lot of mechanics in big cities receive, let alone a small market town. If you pay peanuts you get monkeys.

8: Finally, do mechanics in the bicycle business earn in accordance with their skillset, or are wages too low?

Roman Magula, London Green Cycles In my opinion, their earnings are appropriate, given the average skillset. Though better pay would probably change that in the long run.

Alan Shaw, Garage Bikes The wealth of training and experience we have in our workshop would

Howard Wagstaff, Pedal and Spoke Wages are too low, but most do it for the passion!

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

Contact mark@cyclingindustry.news to register your thoughts.

008 // WWW.CYCLINGINDUSTRY.NEWS

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(( FOCUS ON... MERCHANDISING ))

FOLLOW THE MONEY HOW THE BABY BOOMER SPEND COULD MAKE OR BREAK YOUR SALES. WORDS: John Styles, director at cycling industry consultancy Cyconomist.com

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F

rom the Brexit vote to the hung Parliament, attitudes, beliefs and actions are perhaps more polarised between the old and the young than they have ever been before in living memory.

The roots of this can be traced back to the end of WWII and the birth of the Baby Boomer generation. In his somewhat prophetic work “The Pinch - How the Baby Boomers Stole their children’s future and why they should give it back” - published in 2010 David Willetts MP describes how this polarisation of both income and politics will become more and more extreme, reaching its nadir in 2030.

The old have become wealthy at the expense of the young to a far different degree than in previous generations, is the books main premise. And that the “social contract” between the generations has broken down. Even the Daily Mail agreed. With an article entitled “how the baby boomers took the money and ran”.

The concept in a nutshell is this.

Baby Boomers are a bulge in the population so they benefitted in two ways; 1) there were more of them at working age to support both pensioners and young families, so they enjoyed higher income and they used this disposable income to buy up significant assets (see graph below) and; 2) as they were more numerous they voted and protested for the things they wanted at each life stage, each political and social change driven through in the 1960s, 70s, 80s,

% 30

90s was largely in their favour as they were more numerous and more vocal. Rock and roll, the pill, flower power, 70s wage rises, the 80s transition to the service economy, privatisation, the end of council housing, financial services deregulation, tuition fees, triple lock, closing of final salary pension schemes... and the list goes on...

Of course, whether you think this is a good or a bad thing will very much depend on your age. If you are in your 50s or 60s, you may have done well out of residential and/or commercial property. You may have a secure pension (which in large part is invested in businesses, but also in commercial and residential property).

Whereas if you are in your 20s you may be struggling with high rents, low wages, a lack of career prospects, student debt and no hope of ever owning your own house or car, let alone contributing to a pension. Not that they are exclusively young, but CI.N recently noted that the majority of bike shop staff have not seen a wage rise in 2 years, for example.

Somewhere in the middle are those of us in our 40s. We may have done okay on the property ladder, but with today’s house prices the next rung is well out of reach. We may have done okay in our career, but with a flat line economy there are few promotional prospects. Generation X is in theory the bridge and “casting vote” between the wealthy Baby Boomers and the impoverished Millennials.

Households & NPISH (S.14+S.15): Gross dispoable income (B.6g): Y on Y-1 growth %: CP £m: SA

25 20 15 10 5 0 1949

1969

1989

2009

2016

WWW.CYCLINGINDUSTRY.NEWS // 011

(( FOCUS ON... MERCHANDISING ))

FOLLOW THE MONEY...

I overheard some of this “tension” between the generations while in a south London shop last week. A young lad with a scruffy bike working for Deliveroo haggling over the price of servicing his bike.

“You’ve got a nice shop here,” he says. “You’ve got a good thing going on” and in the next breath “oh, it’s so much money, fixing this bike....”. Is he trying it on? The politics of envy? Or is he just flat broke? I wasn’t sure.

The store owner is probably just sufficiently profitable after his overheads (the building is likely owned by a Baby Boomer buy-to-let landlord or a pension company) but he isn’t going to explain that to every customer who tries to chip him for £10.

So, who’s the victim in this daily game of micro aggression? Possibly neither, maybe both. That’s just how it is.

Whatever life stage we are at, we perhaps need to be prepared for this to continue. Unless of course everything gets robotised, in which case the world could become heaven or hell overnight.

What interests me is how these demographic waves (or perhaps tsunamis better describes them) have already affected and will continue to affect the cycle trade.

In my experience, 99% of the “narrative” in the industry is about new products, new technology, or “supply push” as Economists (like me) like to call it.

There is very little dialogue about the demand side of the equation. I.e does the target market for my product firstly desire my new product and, secondly, are they able to afford my product.

In that regard, the industry is pretty good at creating demand through marketing. But where I think we fall down is perhaps launching incredible new products aimed at younger/sportier riders, those who simply can’t afford them.

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Gen Z, iGen, or Centennials:

Born 1996 and later

Millennials or Gen Y:

Born 1977 to 1995

Generation X:

Born 1965 to 1976

Baby Boomers:

Born 1946 to 1964

Consider that to really enjoy your cycling you need three things: A) space - to store your bike(s) B) time - to enjoy riding them C) money - to buy them in the first place Now consider these issues against a backdrop of a 20-something living in shared accommodation for £500 per month and working zero hour contracts: • Why are there so few mountain bikers under 40 out on the trails?

• Why is footfall so quiet in store?

• Why is the demand for E-bikes growing and the demand for unpowered bikes falling?

• How often does the industry launch an amazing new technology or breakthrough product only to find it doesn’t sell in the volumes that were expected?

• Why are so many younger customers obsessed with bargain hunting and online shopping to the extent they frequently buy the wrong thing entirely and spend more money having the store fix the problem?

The answer may be the same to all these bike industry challenges, young(er) people no longer have any time, money or space.

So they are letting go of the concept of ownership and they rent what they

need. Consider that 82% of new car sales are made with some sort of PCP and there have been warnings that this is not sustainable.

Bike share schemes are going to be big, because the target audience need them. Let’s just hope it converts many into “proper cyclists”; meaning someone who wants to buy a bike, or three, if they ever can!

If I had to boil this whole thing down to one piece of short term advice it would be this; Follow the money.

Everyone under 45 is kind of broke, so if you want to make some more sales and create a new market you might want to take some E-bikes to your local garden centre or golf club.

That’s where the money is.

Many of those with the disposable income to buy an E-bike probably have no idea what an E-bike is and that actually they really need one in their lives.

Which is why G-Tech advertise in the Sunday Times and run QVC-style adverts on TV. I have observed several pockets of demand in the south-east where Ebike specialists or a strong IBD have created the demand by enthusiastically stocking and selling the product.

So the opportunity for further growth is huge. Baby Boomers talk. And Baby Boomers spend time together. When one couple get a pair of E-bikes, others follow.

Take the “E-bike smile” to them.

(( MARKET RESEARCH ))

BIKE RETAIL SALES TRENDS At the close of 2016 CyclingIndustry.News undertook a study of the bike retail market. Here, the Q4 edition of our report focuses on the sales trends that are evident across the many bike sale segments, as well as which brands are claiming the strongest sales within our 74 respondents…

Q1

3%

HOW BIG AN INCREASE OR DECREASE IN BUSINESS HAVE THE FOLLOWING SEGMENTS SEEN YEAR-ON-YEAR?

10%

4%

42%

13%

COMMUTER CYCLING

10%

MOUNTAIN BIKES

34%

34%

52%

1% 1%

2% 2% 6%

4%

CARGO BIKES

12%

WOMEN’S 40% CYCLING ON ROAD 45%

86%

1% 8%

4%

1% 3% 5%

28%

WOMEN’S CYCLING OFF 57% ROAD

14 // WWW.CYCLINGINDUSTRY.NEWS

34%

FOLDING

56%

1%

3% 10%

20%

41%

ELECTRIC BIKES ON ROAD

11%

38%

35% 1%

PERFORMANCE ROAD

41%

21%

ELECTRIC BIKES OFF ROAD 26%

2% 8%

8%

52% 2% 11%

28%

LOW TO MID-RANGE ROAD

53%

37%

2% 3%

4%

KIDS’ BIKES

45%

17% 44%

LEISURE CYCLING

3% 2%

2%

34%

19%

4% 4% 18%

TIME TRIAL

TRIATHLON

76% 72% 1% 1% 3% 5% 11%

9% 13%

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43%

TOURING

52%

62%

BMX

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WWW.CYCLINGINDUSTRY.NEWS // 15

(( MARKET RESEARCH ))

Q2

WHAT IS YOUR AVERAGE SALE PRICE FOR PEDAL POWERED BICYCLES?

1% 1% 4%

4%

9%

ŭĭƟƟŬůģŬŭŻƟƟ ŭŻƟƟŬůģŬŭàƟƟ

12%

ŭàƟƟŬůģŬŭŤƟƟ

THE PREVIOUSLY ACCEPTED AVERAGE SALE PRICE OF BICYCLES IN THE UK RESTED BETWEEN £230 AND £280, DEPENDING ON YOUR DATA SOURCE. IT IS WIDELY THOUGHT THAT ELECTRIC BIKES WILL RAISE THE AVERAGE SALE PRICE OF BICYCLES, BUT OUR QUESTION ASKED SPECIFICALLY ABOUT AVERAGE PEDAL CYCLE SALES. THE INDICATION FROM OUR POOL OF DEALERS – WHICH WERE MADE UP OF A BROAD RANGE OF SIZES – INDICATES THAT AVERAGE SALES PRICES MAY WELL BE RISING.

Q3

ŭŤƟƟŬůģŬŭĝĝĝ ŭĭ²ƟƟƟŬůģŬŭĭ²ÚƟƟ

32% 36%

ŭŻ²ƟƟƟŬůģŬŭŴ²ƟƟƟ ŭŴ²ƟƟƟŬůģŬŭà²ƟƟƟ ŭà²ƟƟƟŬĺĈſś

HAS YOUR STORE SEEN MORE OR LESS DEMAND FOR CUSTOM BUILD PROJECTS? DģœÂ

WITH A TREND TOWARD HIGHER SPEND, AS WELL AS FEEDBACK SUGGESTING BOTH PERFORMANCE ROAD AND MOUNTAIN BIKING TOWARD ARE STILL IN A GRADUAL ASCENDANCY, IT IS PERHAPS OF LITTLE SURPRISE TO LEARN THAT MORE THAN HALF OF SHOPS ARE TAKING ON MORE CUSTOM BUILD PROJECTS:

Q4

57%

43%

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WHAT ARE YOUR TOP THREE SELLING BIKE BRANDS BY TURNOVER?

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0

2

4

16 // WWW.CYCLINGINDUSTRY.NEWS

6

8

10

12

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14

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(( INTERVIEW PANKAJ MUNJAL ))

MOVING MOBILITY If you’ve read any headlines to do with the Hero Cycles Group there’s a good chance your jaw will have hit the floor when reading the quoted numbers produced by India’s leading manufacturer.

CyclingIndustry.News caught Hero Cycles’ CEO Pankaj Munjal at the Viking-backed Street Velodrome Series and found out the firm is only just starting to warm up…

I

t’s not every day we get the chance to scoop an interview with the CEO of one the world’s largest bicycle manufacturers and one that has ambitions to become the very largest. Indeed at the present time Hero controls around 5% market share. Not of India, but of the world’s bicycle production. To put that into context, Hero aims soon to have capacity to produce around 9 million bicycles each year. This will be achieved through investment in a now approved Ludhiana cycle valley, adding a further 60% capacity to eventually reach around 8% of global production share.

“We are working on a Cycle Valley, so that’s my big dream and it’s getting shaped now,” explains Hero Cycles’ boss Pankaj Munjal. “Approval has been granted and building work will begin this year. We will invite Japanese, Taiwanese, the entire global supplier base, so the whole eco-system will exist to make a high-end bicycle. We anticipate growing the valley to the scale where India becomes so strong that China and Vietnam will no longer be the standout option for the industry.”

Investment isn’t confined to India, of course. In January the ribbon was cut on the firm’s Manchester Global Design Centre – a facility that the now Heroowned UK distributor Avocet urges industry talent to be “banging on the door” of. In the five months leading to August a team of eight international staff has been

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assembled, which in connection with a team of 50 in India are already rapidly prototyping new concepts in bicycle and electric bike design. Neighbouring Manchester’s University, as well as the Graphene Institute, Hero wouldn’t be drawn on the intricate details of product design, other than to say the talent from both is being put to good use and that products will come to market from October.

“Because we lead the industry in all that we do, we want to be at the front end of innovation in the future, so we’ll be assessing graphene, among other materials for their benefits to the market,” said Avocet of a future experimenting alongside what the firm describes as the UK’s epicentre for engineering innovation.

But what might the ambition be for the UK? “Our brands in the past year have tripled in volume yearon-year, we are hitting 18 to 20,000 bicycles per month.

The UK is a market of 3 million bicycles a year, close to £1.4 billion in sales, so we aim to be at the forefront of this market. The high-end segment has been growing for us at between 25 to 30% for the past few years now.

Domestically, modern India now has this customer just as they do in the UK. They want expensive, they want to boost their health and fitness. The customer base presents a high opportunity,” says Mr Munjal.

When it comes to electric bicycles Hero now offers the Lectro brand, due in March, something for which the long-term ambitions are quite startling.

“We are engaging with high-tech companies to see how we can quickly accelerate the usage of E-bikes. This is a priority, especially given that for the past ten years in Europe we have witnessed growth of the market by 25%.

It could become half of the market in time. Ultimately I dream of prompting the person who drives to work to actively choose to cycle. Eventually, in India, we will look to introduce a $200 electric bike on the road and with Government support we are working toward this goal. I want to mobilise the world, starting with India. With the scale that we have can you imagine the capability and potential for change alongside our global partners? We have a big advantage in that we can dream anything.

With most countries having signed the Paris Agreement the synergies align well for bringing about mobility change. It is simply wrong to take a 2,000 kilo car and burn fuel for a journey of under five kilometres. Like the cell phone changed communications, now is our time to change mobility,” enthuses Munjal.

Relatively expensive bikes are a reasonably new progression for the segments of the bicycle business like India, though. Split down the middle of the population, half a billion live below the poverty line.

“Transport comes after food,” explains Munjal. “It is for these people that Hero wants to bring about change. In Delhi the average speed has come down from 40km/h to 15km/h. This is worsening. There are 1,500 cars sold every day, so times that by 365. This cannot sustain, the congestion today means that is far quicker to move almost anywhere by bicycle and so our business has become a social need.”

Working alongside the Government, Hero will now work to supply 1.2 million of the nation’s very poorest with a cheap bicycle. This, it is hoped, will get the nation moving from the bottom up and stimulate the economy where growth is most desired.

“This is a marathon, not a sprint, we want to deliver cycling to the masses and give everybody opportunity,” adds Avocet UK CEO V Sreeram.

Further expanding upon the domestic opportunity, Munjal outlines that despite the enormous population,

bicycles haven’t been at the forefront of transport. That’s something he aims to change. Referencing the Uttar Pradesh cycle superhighway, Asia’s first elevated bike lane, opened at the tail end of 2016 and forming part of a 207 kilometre long stretch for bikes, Munjal hopes that the industry can influence Governments to build for active travel.

“In India the penetration of cycles is still very low. It is 60 cycles per 1,000 households, while in England it is more like 600, so ten times the penetration. In the Netherlands it’s 1,000, every family has a bicycle! What we are seeing around the globe, as well as in India, is huge change in the way cities must operate. We are urging the Government to build for a change in transport habits as part of our plans to supply bicycles to those in need.”

Taking British brands globally may form part of Hero’s global ambition. Recognising the near 110 year heritage of the Viking banner, harnessing the potential of brand Britain abroad may well prove important in Hero’s export strategy.

“We think that overseas revenues will outstrip domestic revenues shortly, we were an India-centric company until now. We have signed a joint-venture with British, German and Japanese partners as part of this growth strategy toward an export-based business model. When we took over Avocet we started from zero, we are now selling around 500,000 a year overseas. That figure is expected to rise to 1 million a year with about 80,000 a month sold, up from the 45,000 at present. Africa and South East Asia have tremendous potential too,” adds Mr Mughal.

The business is currently in the process of profiling Europe with a view to extending the manufacturing portfolio beyond the four owned locations already producing.

However, following a busy period of acquisitions the priority will be to shore up the capacity that is presently available. With continuous change in the way the global bicycle business functions it’s no surprise to hear a change in sales strategy may also be imminent.

“Avocet sits with a huge advantage with Hero’s scale and growth plans, they can dream and fulfil anything. We are currently developing our global e-commerce platform, creating a world class digital customer experience to help us project our brands to the international consumer direct to further drive change and promote growth,” concludes Munjal.

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(( TAX ADVICE ))

What if HMRC come knocking?

THE threat of a tax investigation is an unfortunate part of running a business. With 1 in 10 businesses investigated at some point, it’s something that everyone needs to be prepared for.

HMRC can select businesses at random for inspections, but they will tend to focus on the businesses they consider to be an ‘easy target’. Without the budget for a team of financial advisors, small businesses are more likely to make errors in their tax calculations and so more often than not it will be these small companies that HMRC inspectors target.

If your business is selected it is important that you know what to expect.

Carl Reader, from D&T chartered accountants says, “While the process might be uncomfortable, it is important to stay professional and to also provide all the information that you can to help the enquiry reach a satisfactory conclusion.

“We recommend to all of our clients that they take tax investigation insurance, simply because it allows them to be professionally represented without the fear of additional fees.”

THE ENQUIRY PROCESS HMRC will send a notice advising that an investigation is being undertaken. The letter will include a deadline for response – usually 30-35 days.

HMRC will usually request submission of all records for the year of enquiry including bank statements, invoices, cheque-

books, paying in slips, VAT records and payroll records.

Once you have submitted the information requested you can expect to receive HMRC’s response 30-60 days later. HMRC may accept your submission, or may ask further questions.

Eventually, HMRC will either be satisfied with the information provided and a closure notice will be issued, or the enquiry will go before a tax tribunal for a decision to be made. The majority of cases are resolved before there’s a need for a tribunal hearing.

MINIMISING YOUR RISK While there is no way to safeguard against investigation, you can take some steps to minimise your risk.

• Submit your tax returns on time • Be accurate and complete • Explain any changes before questions get asked • Keep good records and declare everything Given the costs that can be incurred by having your accountant draw up all the necessary documents if you are investigated, it is advisable to get tax investigation insurance.

Some accountants have been known to charge up to £150 for this standalone service. Check with your accountant whether you are covered, and if you are being charged extra for this service.

With ACT membership you have tax investigation protection as standard.

For further information contact the ACT on 01273 427 700 or visit www.cycleassociation.uk

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(( BIKE SHOP STRATEGY ))

HOW BIKE SHOPS CAN NOT ONLY SURVIVE THE CHURNING RETAIL STORM, BUT THRIVE...

Jay Townley There is no doubt the bicycle business is going through difficult times and this article is the second in a series intended to help explain the turbulence and help bike shop owners and managers to not only survive, but ultimately thrive deep into the future.

H

ow can a bike shop survive and ultimately thrive?

The answer is actually a series of changes in the form of interconnecting consumer and customer-focused initiatives, or actions that are within the reach, including the financial and the management power of just about every bike shop.

You already know that bike shops are not all the same, so each owner will have to move the initiatives and the opportunities around somewhat differently, depending on where the business is today and what the financial and retail merchandising situation is.

This is well worth repeating; the FIRST thing you need to do is sit down in a quiet place, with no interruptions and decide what you want. I am taking this directly from Marie Forleo (www.marieforleo.com) and I highly recommend you visit Marie’s website and take her advice about deciding what you want for your bike shop business.

Whatever you decide, write it down because, as Marie says, clarity equals power. The clearer you are about what you want your bike shop to be, the easier it is going to be to communicate your bike shop’s mission and your vision to your managers, employees and your customers – and to yourself.

Don’t try to be all things to all people. Ask your customers what they want from your bike shop and focus on delivering the experiences and lifestyle solutions your customers want from you – not what you or your managers or staff want.

NEXT> Sort out the brutal truths and determine which ones are holding your business back and restricting your ability to generate a real and fair profit – and jettison them.

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Start with pulling out the copies of the dealer agreements that you have signed with your bicycle brands. If you don’t have a copy ask your sales rep to provide you with one.

Read the agreements and if you need any clarifications ask the brand, and most importantly, question any clause that, in your judgment, isn’t beneficial to your business. Getting the opinion of an attorney or financial advisor will be up to you and your budget, but make sure any authorised agreements you have signed are fair to your business and will help you make a fair profit – or plan for a future without them and prepare a calendar for sending a proper notice of termination.

Before you panic, at last count there were slightly over 140 individual brands of bicycles available to U.S. bike shops, plus local builders and brands, new crowd funded start-ups and don’t overlook the locally-made option.

Elsewhere your choice may be broader and unconfined to your domestic area.

NEXT> Do an internal audit to make sure your bike shop is making a fair gross margin of profit on the sale of new bicycles.

New bicycles are 47 to 50% of the total annual revenue of the typical American bike shop. When this data was analysed it clearly showed that over the last 15-years the typical American bike shop has not made a net pre-tax profit on the sale of new bicycles.

If your bike shop is the exception, congratulations. If your bike shop is among the vast majority that have not, or are not making a fair profit on the sale of new bicycles – stop it.

Remember, your bike shop is the brand in your neighbourhood and community, and you have the local

Don't be shy when it comes to contracts, ensure your business has fair terms branding power to sell only those new bicycle products that provide your business with a fair retail profit.

Also, don’t forget about used bicycles, and the profit to be made on the variety of ways bike shops can provide and sell used bicycles in their local market space.

NEXT> Focus on GMROI. Gross margin return on inventory is a key financial metric that you have to learn all about as quickly as you can. Why? The typical American bike shop is realising slightly over 2 inventory turns on new bicycles and around 3 on total inventory.

Other retail channels are realising 4, 5 and 6 or more turns on total store inventory, and every additional turn results in additional profit and increases GMROI. Increasing your bike shops inventory turn and GMROI starts with selecting and working with brands and suppliers that are as interested in your shop making a fair profit as they are in making a profit for their businesses.

Ordering and receiving merchandise more frequently and no less than 5 or 6 times or more per year at landed costs that allow your bike shop to make a fair profit is the place to start, and you can streamline this purchasing and merchandising process by utilising the purchasing and inventory management modules that are available from your Point Of Sale (POS) provider.

NEXT> Dismantle the tyranny of choice in your bike shop. Over several decades the bike shop channel of trade has been promoted and accepted as conventional wisdom that consumers want a lot of choices – which results in too much choice and confused shoppers, who too frequently leave a bike shop without purchasing.

It is not up to the brands or their reps to do your bike shop merchandising for you – unless they will help you install a good-better-best system.

For every new bicycle model, helmet or rack – it doesn’t matter because the principal is the same. Look at the models in a category and select a good opening price point model, and a better model with a logical step up in features and retail pricing, and finally select a best

model with logical and additional step up features and top of the category retail price.

Make it easy for shoppers to buy from you – and make it easy for your sales associates to sell to shoppers.

Install a uniform step up retail sales methodology and continually train and educate, and reward your staff with an incentive system that consistently sells-up.

Don’t forget add-ons and including add-ons in your bike shop’s retail sales methodology and your training and education program – and your staff incentives.

NEXT> Examine what it really means to be omni-channel. Remember, the consumer has been empowered by technology and they are in-charge of the retail economy, and they want experiences that give them 24-7 access to the retailers with whom they choose to do their business.

What this boils down to is a commerce enabled website for your bike shop. If your bike shop already has a website, but you are not selling merchandise on your site, investigate providers and resources to take your website to the next level.

If you don’t yet have a website please seriously consider including one in your next budget and business plan. Omni-channel is a term that is often misused and misunderstood. What it means is a seamless electronic extension of your bricks-n-mortar bike shop.

Your physical store and your website should carry and feature the same merchandise and promotions. Furthermore, your customers should be able to shop and purchase from your bike shop, by accessing your website anytime, day or night, when they want to.

NEXT> Focus on outrageously strong service and delivering extraordinary experiences and lifestyle solutions – thus creating customers for life.

T. Scott Gross, the author of Totally Outrageous Service, wrote a very successful business book around his actual retail experience of providing POS, or Positively Outrageous Service: New & Easy Ways to Win Customers for Life!

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(( BIKE SHOP STRATEGY ))

Some of you may have read the book or experienced a live presentation by Scott over the years when he appeared at Interbike and NBDA gatherings.

What do you have to do to create Totally Outrageous shopping experiences?

Start with your bike shop management. In turn you and your managers can start with hiring-smart, starting with the hiring of your managers.

Use online assessments as a part of your hiring process, and act on what they tell you – particularly about customer service naturals. Always conduct two or more interviews before making a job offer, and never hire on a ‘gut-feel’.

The objective is to hire people who want to provide outstanding customer service. Next, train them on your retail systems, and educate about your store policies and operating procedures. Everyone has to be on the same page when it comes to customer service and what empowers your employees to decide to do to deliver a consistent level of outstanding and outrageous customer service.

It is hard, if not down-right impossible to provide a Totally Outrageous shopping experience if every manager and employee doesn’t know what you, the owner, want and what the rules of your retail store are, both physical and online.

The next article in this series will focus on the Blue Ocean Strategy: How to Create Uncontested Market Space and make your competition irrelevant based the 2004 book by W. Chan Kin and Renee Mauborgnie. A bike shop owner brought the Blue Ocean Strategy to our attention before the great recession, and it has proven to be an essential guide to making the transition from the old mainstream bike shop business to the new-wave fringe bike shop business, and from surviving to thriving.

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OMNI-CHANNEL IS A TERM “THAT IS OFTEN MISUSED AND MISUNDERSTOOD. WHAT IT MEANS IS A SEAMLESS ELECTRONIC EXTENSION OF YOUR BRICKS-N-MORTAR BIKE SHOP.

”

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(( RECOMMENDED FOR RETAIL ))

LIGHT READING Of course we’d love for you to exclusively read CyclingIndustry.News, but once in a while it’s well worth looking outside of our bubble at the bigger picture, particularly when it comes to retail management. We therefore asked around the industry for book suggestions that have helped industry stalwarts establish best practice in bike retail…

Reinventing the wheel: The science of creating lifetime customers by Chris Zane

Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne

H Having bought his own bicycle shop aged just 16, author Chris Zane details how he ju turned a failure into a success by overhaultu ing his approach to customer service. Now in a business celebrity of sorts, Zane’s book has featured in the New York Times and ha ha has been gonged with numerous awards.

Within you’ll find often left-field ideas that Zane has put into practice himself, th including a trade-in scheme for families in whereby kids that have outgrown their steed can trade in for a new bicycle. Overly generous? Of course, but word of mouth travels and in the end produced a net gain for Zane’s business.

P Published in February this year and having sold 3.6 million copies globally in h 44 languages it’s fair to say Blue Ocean Strategy has fast become a reference S point for business. p Bringing together many strands published in the Harvard Business Review, p Blue Ocean details how to take on unconB tested market spaces. Kim and te Mauborgne work chapter by chapter to M discuss the topics on the Value Curve, the Strategy Canvas, the Price Corridor of the Mass and the Business Model Guide.

Positively Outrageous Service by T. Scott Gross Leading Out Retail by Donny Perry M Many in the business will know Perry to be Specialized’s retail development b head, which makes him excellently h placed to author a book on monetising a p bicycle retail store. b Based on hundreds of hours of research, Perry’s Leading Out Retail re d discusses in-depth the monumental shift happening in bike retail and how to sh adapt strategies to cope with changing ad consumer buying habits and ultimately drive profits.

The signals are talking by Amy Webb W Washington Post bestseller and winner of the 2017 Axiom Business Book Award in Business Technology Amy Webb is a noted futurist with a knack for separatn ing genuine trends from the ‘here today in gone tomorrow’. go Helping the reader think like a futurist, is the book discusses themes such as, as how will artificial intelligence, machine m learning, self-driving cars, biohacking, bots, and the Internet of Things affect our businesses and workplaces?

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C Corporate consultant T. Scott Gross takes 224 pages to detail effective methods for 22 dealing with and retaining customers, as de well as exploring how to energise employw ee ees to want to achieve the same. By delivering positively outrageous service the e au author isn’t for one minute suggesting you should scare customers away, more that sh retailers should be doing the unexpected re an and going beyond the call of duty to wow customers with quality service. Examining in depth what’s wrong with the service industry and even detailing how to rescue mistakes this book is all about enhancing the customer relationship for the long run.

The endangered customer: 8 steps to guarantee repeat business by Richard Shapiro R Recognising that consumers nowadays are empowered and quite often feel entiar tled, Shapiro breaks down the barriers to tl creating customer loyalty in simple steps. cr Believing high-tech answers fall short of the personal touch and certainly lack the agility of independent retail, The th E Endangered Customer’s eight step process is supported by a Repeat Busip ness Scorecard to as assist your business in tracking process.

Joined by Working Class Heroes’ Rob Caine, the Citrus-Lime team head out on another Thursday Night Ride with a lead out to the local trails by MD, Neil. Photo by Citrus-Lime’s BDM, David.

Ask us about our Entrepreneur Pack when booking a free demo of our simple, powerful and (now even more) affordable point of sale and stock management system, Cloud POS.

www.citruslime.com/demo ... or call 01229 588 628 (Mon-Fri, 09.00 to 17.30) or email your enquiry to hello@citruslime.com

(( PROFILE RUTLAND CYCLING ))

FLOWING OVER THE RUTS If you’ve had eyes on CyclingIndustry.News’ Jobs Board it won’t have escaped your attention that Rutland Cycling has been relentlessly recruiting industry talent.

Curious about what’s going on, we sat down with Managing Director David Middlemiss to get the full story on the chain’s ambition…

J

ust two years ago the Rutland Cycling portfolio consisted of four shops, headed up by the flagship Whitwell location on Rutland Water.

When the business came to be back in 1981, founder Dave Archer literally handbuilt the first building, a unit that still exists but is now dwarfed by the main building and functions to serve the adjacent climbing activity rig. Also dwarfing that building is the wider portfolio of stores, soon to be 12 strong and representing a tripling of locations in just 24 months.

At a time when there are an enormous number of independent bike shops either closing or for sale, to say that Rutland’s trend bucking is eyebrow raising is an understatement.

For a family-run business that prides

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itself on investing in its people it’s hugely enviable too.

“We have no strategy to necessarily ‘keep up’ with the industry big boys, more to do our own thing and for us that is to tie up strategic locations that will best show off the brands we carry to customers,” explains Middlemiss. “All of our hire bikes are current model year bikes, which I think is particularly important at the present time. Certainly we were among the very first retailers to be offering electric bike demos in a location quite like Rutland and I’d say that not only did we benefit as a result, but likely the wider industry too. As is commonly accepted, once a new customer has a go the new understanding sells the product immensely well.”

Indeed during our second store visit

of the day, Rutland’s purpose built Peterborough store, a customer stopped Middlemiss to sing both the praises of staff and for the way an electric bike has changed his social circle.

One purchase naturally lead to curiosity of others and Rutland has since benefitted from a group of high-ticket sales.

“That wasn’t staged, I promise,” jokes Middlemiss, who coincidentally bolstered his e-bike knowledge reading for a Phd in lithium production, having studied on Bolivia’s salt flats where 85% of the world’s resource apparently resides. “But that goes to show that people are highly rating the Rutland experience and that’s something that we’ve invested quite heavily in. Experiential retail is the buzzword, but we’ve been pressing forward the customer’s

enjoyment from the beginning. My father-in-law only shared with people his enjoyment of touring back when he founded the business and to this day it’s all about showing the customer a great time on bicycles.”

Creating an environment within which people are happy and comfortable has been a focal point of the business, which now has pushed brand Rutland and the firm’s own merchandising out across all of its branches. It’s notable that despite having several dedicated heavily branded segments within stores, the Rutland styling runs throughout and will continue to do so as the firm plots its course to open branches in Leicestershire and Nottingham as we head into 2018. The attention to detail is among the best we’ve seen in the industry, with

signage clear, bright and effective.

Rutland’s stores are not places you’ll spend long in if you go. knowing what you’re looking for, such is the effectiveness of the in-store visuals. You can, and of course are, invited to spend as long as you wish. As is now common in the industry a coffee bar offers the chance to peruse magazines and take in the Rutland story with a little nostalgia designed in where customers will dwell.

“The high class showroom feel is deliberate,” we’re told. “Point of sale can be immensely effective at telling brand stories and engaging a customer.

Big format shops with emphasis on presentation can of course be costly, but there are big benefits to being able to merchandise well and make stores a place customers want to be and return

to. We’ve gone through several full format overhauls since the 90s to keep up to speed.”

As important as the visual journey is, Rutland’s staff have a similarly professional, almost trained, approach to guiding customers.

“We have our own non cycle specific trainer to help staff get to the right level.

There’s brand training too, of course and an annual coaching event. I’d say the cycling business isn’t necessarily one traditionally able to resource management training, but we do ensure this is taken care of. My wife and I come from corporate backgrounds, which are obviously highly trained and with big investment in staff. One good thing about our growth is that we’ve been able to offer some decent career progression for our

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(( PROFILE RUTLAND CYCLING ))

100 plus staff. It feels like Rutland’s a good place to be at the moment,” says Middlemiss. Like customer service, the process has to be ongoing we’re told.

“You have to empower staff, it’s important to have engaged and motivated people in the business to drive forward your vision,” he adds.

Streamlining the business to operate on the same page also runs as a theme with Rutland’s online strategy, a segment of the business presently kicking up a gear. Currently investing to tie in the brand’s online appearance to in-store, Middlemiss believes Rutland to have been among the first to have click and collect services live in the UK trade, something that will be further developed over time. Having migrated three different back-end systems to one central Citrus-Lime platform running throughout the business, each shop is able to sing from the same hymn sheet on everything from stock to sales trends, handy given that each store sells different brands.

“Online is challenging, but necessary.

It seems as a result many are no longer investing as heavily as they were. I’m keen that Rutland has a ‘one customer view’ that links the experience of instore with a similarly engaging online platform. There are so many ‘research online, buy in-store’ customers out there,” says Middlemiss.

Carefully weighing investment against keeping a sharp eye on profits has been crucial in the expansion. Though Rutland has long-term funding from the Business Growth Fund to assist in its ambitions, family management remains at the forefront and for that reason Middlemiss speaks of carefully tuning stock in each shop. It’s inescapable on entry to the Whitwell branch that electric bikes and women’s bicycles take pride of place across much of the ground floor.

“These are the industry opportunities at present and tie in brilliantly with our hire business. Certainly we took that risk and placed faith in e-bikes early to best understand the potential and Whitwell demonstrates it in abundance. People tend to hire, go home and return to purchase later, so that first experience of Rutland and our bikes is key. Adding weight to some categories has meant removing lines that were less profitable and that’s an ongoing process. Certainly we have a greater ratio of bikes over parts and accessories nowadays, which

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further helps with the showroom feel.”

Planning ahead of the general industry benchmark is again part of the Rutland strategy and something inspired from Middlemiss’s corporate days.

“I like to be thinking six months ahead and planning carefully how the business will turn customer experience into sales. Working very closely with brands is one method where we have particular success.”

No two stores follow a copied and pasted strategy, we’re told.

“In Cambridge, among other hire locations, one of the challenges we have is competition with other activities for people’s disposable leisure income. Bike hire there needs to be cost effective for people to weigh up cycling against other activities,” says Middlemiss. “It’s a challenge to find the magic bullet for margin improvement in the cycling trade. That’s why when it comes to things like bike fit we are strong on emphasis that this is a charged service. If we’re selling a bike north of £4,000 we will perhaps include a fit, but the emphasis will always be there that this is an added value professional service and most customers understand the investment in time, equipment and experience.”

Middlemiss speaks passionately about the bike business not underselling itself, which is in large part down to his desire to be in the business, “for the long haul.”

“I’ve a long-term view of the trade and plan to be around to see Rutland through to the next generation of bike retail. Of course we have a number in mind when it comes to acquisitions and store expansion, though it can’t be uncontrolled. I like stores to be able to offer a traffic free experience of cycling nearby, that’s part of the formula. With that in mind I think as an industry we could pull together a bit more on advocacy when it comes to championing cycling as a serious mode of transport as well as a sport and leisure pursuit.

The government could absolutely choose to be doing more to help, of course. The e-car is happening now, so we can only hope the e-bike will eventually complement transport strategy.

This opportunity could be huge for our industry, every bike lane built adds weight and adds customers. We attend meetings where possible to drive forward developments for cycling, but you can never do enough to build that future,” concludes Middlemiss.

BUSINESS FOR SALE BOXER CYCLES BOXER CYCLES the UK manufacturer of cargo bikes is putting the business up for sale following the ill health of its founder and managing director Jeremy Davies.

‘The business is just at the point where it is starting to take on dealers and the market knows and the brand is associated with quality and innovation’ says Davies, ‘Now the business is ready for someone to take to the next level and make the required sales and marketing push. I am an inventor by habit and not a salesman. I focused too much time on R&D and production rather than getting the bikes out there. I am highly confident that with a strong sales resource, Boxer will be in the top 3 cargo bike manufacturers in 3 years.’

• The business has a credible order book including new dealers and has qualified leads totalling over £60k which have not been actioned. Average sale value of £3,500 (direct)

• Company debts are low and can be easily managed.

• An existing shareholder willing to invest further into the business.

• There is growing interest and funding available for ‘ULEV’s’ (Ultra Light Electric Vehicles).

• Jeremy who has designed all the models and his Cad designer partner are willing to work on consultancy basis to ensure transition to new owner and assist with new model design.

• The company has full Solidworks manufacturing drawings and bills of materials for all of its models and to back this up there is an existing supply chain enabling the buyer to easily continue on with production either in the UK or via outsourcing.

• The aluminium framed range of bikes can be produced without motor or with rear hub motor or Shimano Steps mid drive offering three price points from budget to high end.

Serious enquiries only should be directed to Jeremy Davies on 07917 698 438 or jeremy@boxercycles.com

(( PROFILE PEDAL AND SPOKE ))

HAVE A GO HERO The bicycle business is blessed with a high ratio of adventurous and daring types, but few will match to Pedal and Spokeâ&#x20AC;&#x2122;s Howard Wagstaff. Just shy of 12 months ago the Surrey Hills shop owner was being rescued from the Atlantic Ocean having battled in vain against 19 metre waves. So navigating the choppy waters of the cycle trade must be a doddle, right?

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“

Our boat was sinking and 200 miles out from land, there really was no way to proceed so the skipper had to call it in. You don’t appreciate the power of the sea until you’ve a 19 metre wave crashing down from above you.”

We’re perhaps lucky to be speaking with bike industry personality Howard Wagstaff. Having set off from The Canary Islands on a Transatlantic row during what was deemed a relatively safe window, Peaslake’s trail centre was very nearly without its hub – considered by the locals to be the Pedal and Spoke business. Just prior to Wagstaff’s wedding, a ring carried on the stricken boat is now somewhere on the ocean floor.

“I’m in the team to do it again next year,” he says with a smile.

You’d never guess that Wagstaff would be the type to take a gamble.

The Peaslake store itself is the result of a punt of sorts on something that didn’t fit the mold. Certainly size wise the store is among the smallest square footage you’ll see outside of mobile vans.

“I rode a lot around the area before we opened here,” says Wagstaff. “At the time we had the Reigate High Street shop, sold to Maison du Velo around 3 years ago, but I was aware of a swell of riders around the Surrey Hills, in particular Peaslake. I surveyed the majority with a view to learning whether they’d support a bike shop central to the trails. With enough support we decided to forge ahead. Never did I think the shop would overtake the High Street shop, let alone become my focus.”

As seen with trail centre bike shops like Revo in Wales, to flag a recently

profiled example, there are significant pros and cons to leaving traditional behind and relocating to the wilderness. In Pedal and Spoke’s case, the pairing of low overheads and a growing captive audience proved too attractive to not have a go.

“Our yearly costs are 10% of what they were when we were in Reigate.

We found on the High Street that we were busy fools, working tirelessly and achieving great volume, but without necessarily turning the best profits. We were constantly running out of space due to the plethora of stock carried at the time and that meant a customer variety that wasn’t necessarily conducive to financial progress.

The gamble has paid off; in the last quarter we turned over £20,000 more than when we had both shops during our best peak.”

With the razor sharp focus of Pedal and Spoke on mountain biking customers are in a different frame of mind to their High Street counterparts, believes Wagstaff. “I found that in Reigate customers would more often feel it’s okay to be rude, just because that’s somehow more acceptable in town centres. Out here people are away from the noise and have more than likely been cycling. Therefore they generally arrive with a smile and a good idea of what they want.”

It helps that the local scenery positively screams adventure. Pitch Hill is just one of a few in the local area slathered with a variety of technical trails, while the surrounding roads offer up, by southern UK standards, a hugely inviting topography for the Strava chaser. Wagstaff’s customers therefore need the right kit.

“Our average bike sale price is

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(( PROFILE PEDAL AND SPOKE ))

£5,000 and the local riding justifies it.

We couldn’t ask for a better location to be selling Santa Cruz bikes. A good month will see us sell ten bikes and a handful of frames. What scares me a little is that people will spend all that money on these amazing bikes, but won’t shell out £100 for some skills training to get the most out of their rides!”

Some perhaps don’t need to, concedes Wagstaff. Interestingly he notes a trend for his off road demographic to have brushed up on their knowledge.

“It’s hard now to buy a bad mountain bike over a certain price point, hence there’s some hugely over confident riders out there getting away with all sorts. More often I’m seeing they know a lot more about the product and with that they’re well researched on the alternatives. It’s not uncommon now that I’m pitching Santa Cruz against the likes of YT and Canyon. People can see the finishing kit differences between brands and often they’ll take what a journalist in the consumer mags says as gospel.

It’s quite often my job to convince them that the hype around Santa Cruz is well worth their consideration.”

It’s for this reason that hire of his demo fleet is a central pillar of the business with a clear separation between demo and rental. Typically charged at £60 for a day’s demo, bar Friday’s free 1 to 4pm happy hour, Pedal and Spoke carefully strike the balance between cost coverage and enabling customers to make an informed choice over a handful of rides.

“If demos were free I’d never make any money, thankfully I’ve rarely had complaints on this front. You have to cover your costs with demos as with anything. I think one of the downsides of being a trail side store is that people expect quick and cheap repairs in a tiny window. For a period of time we gave tools out free for customers, but quickly found ourselves replacing a Joe Blow pump every two months through misuse.

We now ask, at minimum, for a positive Facebook review for favours.”

The flipside of Wagstaff’s generosity over the years has had a positive net effect, he says.

“We treat every customer through

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the door the same and indeed I think that relationship carries on long after the purchase. A perk of being where we are is that we very quickly develop long-lasting relationships that would take a lot longer on the high street.

The footfall is of such a volume and importantly of such a high quality that

we’re able to choose our hours within reason. It’s a lot more relaxed.”

In the immediate vicinity is the Hurtwood pub and the Peaslake Village Store, both considerable beneficiaries of Peaslake’s tendency to be a hub for the on and off road cycling communities.

“After our shop rides we’ve got the pub as a natural finishing point and while I’m handling customer repairs I’ll send them over to meet local legend Trudy for a coffee on our tab, so I’m optimistic that cycling is excellent for the local economy here,” explains Wagstaff. “It gets them out of the shop while we’re working too. We do our best to forge long-term relationships and sometimes that involves going above and beyond. We recently popped by a customer’s house during the day and gave their new bike a service ahead of the weekend, just because they’re a good customer. Providing a high level of customer service is almost always appreciated and sometimes repaid in ways you don’t see coming.”

There’s good evidence to suggest that the enthusiasm is rubbing off on the local villagers too. While we are speaking an elderly gentlemen enters to make an initial enquiry on an electric mountain bike. Taken aback by the price he leaves to consider the purchase further, but this type of reengaged customer could very soon add another dimension to the business, we’re told.

“I’m close with Fully Charged who bring in a number of Moustache ebikes. I’ve taken a few for our store despite it not personally being my thing and the interest is certainly there. It seems that the electric bike bug catches and spreads in an interesting way. I’ve noticed a lot of people moving between riding circles as they’re able to match or drop other’s pace. When I first started it seemed like a bicycle was a big purchase for people and I think to some degree the electric bike is changing perceptions given what’s achievable to almost anyone making the investment. This is a segment I’m watching with interest from a business point of view, we may expand in this direction in the near future.” www.pedalandspoke.co.uk

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SELLING TO MEN AND WOMEN

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O

ne of the classic dilemmas facing any sporting retailer is working out how to tailor its offering to its client base. In particular, many retailers struggle with working out how to sell different products to men and women, without marginalising one or the other. As a Google employee recently found out to his cost, overstating the difference between men and women can be disastrous. For a bike retailer though, there is also a risk in understating, or at least failing to provide for, the needs of different sectors of the population.

Perhaps the biggest difference between men and women is in how they wish to use their bikes, or, to be more specific, who they wish to cycle with. A high proportion of the men we surveyed preferred to cycle alone. By contrast, women were much more likely to say that they cycle specifically in order to spend time with a partner or with their children. This was true across multiple markets. However, and this is the crucial part, that does not mean that bike shops should be making assumptions. For manufacturers, it is important to know the overall picture in order to make sure that product ranges reflect the wants and needs of cyclists. Your shop on the other hand, may attract a very different crowd from the national average.

In fact, for many cycling shops there are major risks in differentiating too overtly between men and women. The age of ‘pink it and shrink it’ selling is mercifully over.

Push too far with hackneyed tactics and female customers may find themselves becoming suspicious of over-targeted sales, fearing perhaps that they are either paying over the odds, or being sold lower spec products.

In many ways, the cycling industry is a victim of the wider retail industry’s past transgressions here. Traditionally so many women’s products are based on men’s with just a colour change and a higher price, known as the ‘pink tax’, to differentiate them from the original. Self-defeating and downright unnecessarily gendered products like Bic’s female pens have spawned scepticism of women’s products as well as internet mockery (if you have never seen them, the Amazon reviews of “Bic for her pens” are almost an art gallery in their own right).

In this climate, female bike buyers may instantly switch off if they fear that a product has been retrofitted for women rather than developed with them in mind. It was telling that, despite the pronounced differences in who men and women prefer to ride with, the same research showed little difference between men and women when it comes to interest in competing in events.

Importantly the results suggest that, although just under two thirds of females invest in women’s specific models, those women who class themselves as competitive are much more likely to buy products designed specifically for women than those who commute by bike.

Selling to women on the basis of aesthetics and assuming that a sales process can skirt over performance will not work in the long term. This is why brands like Liv have invested heavily in portraying the brand not

just as colourful bikes for girls but as bikes for daring, empowered and free-spirited women. Working with manufacturers’ themes and harnessing them with your own shops’ identify can become a powerful combination.

In this way, shops stocking women’s specific equipment may have much to gain, provided that they can identify the right audiences for these products and successfully communicate the benefits for the cyclists in question.

For committed female cyclists a women-specific product may well be the right performance choice, but selling it will require store staff to be able to talk about the differences, whether these are focused on touch point tweaks or are more wholesale. If your staff feel that a men’s bike might inhibit a female cyclist, then don’t be afraid to tell her about the benefits of thinner handlebars, or less tailored saddles. At the same time if they feel that a certain customer would be better served by a male frame, which is available at a better price, then telling a client this can only build customer loyalty. Getting this right means engaging with differences and similarities between your male and female clients right the way through the retail process. When making stock decisions, decide if a women’s product is going to deliver for your customers, and if the price is fair given its spec. Every stocking decision is either building or damaging your brand. Likewise when considering a store layout, think about what your floorplan says about your store’s priorities and values. If you test different store layouts or promotions, keep track of how this affects sales, and measure what the impact has been year on year.

As shops test different ideas, it is important to take the opportunity to build up a picture of who your customers are. Make notes on conversations you have had with customers and over time patterns may emerge that reveal something about your particular clientele that you hadn’t previously realised.

Really, this process is not about whether cyclists are male or female, but about how people want to ride their bikes. The joy of the saddle is something that should unite men and women, old and young, rich and poor.

Understanding your customer and tailoring your sales process accordingly, is a much better solution than making assumptions.

WORDS: Edward Willis Sports Marketing Surveys INC. (SMS INC.), offers detailed reports on cycling participation in 21 countries as well as in-depth consumer studies in the UK, France, USA and Germany. SMS INC. is a fullservice market research company serving the sport and leisure industry. Please contact Edward Willis at ed.willis@sportsmarketingsurveysinc.com for more information.

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(( INTERVIEW MATT BARKER ))

Nearly 18 months on from Zyro’s acquisition of fellow distributor Fisher Outdoor Leisure the business is now in command of a portfolio of around 50 of the industry’s leading labels. Mark Sutton catches up with ZyroFisher CEO Matthew Barker with a view to finding out a little more on the firm’s strategy going forwards…

B

ack in April of 2016 when the pairing of two of the UK’s long-established cycling distributors was announced, initially the bicycle business at large had more questions than answers. Coming just months after the merging of two of the industry’s largest online players, now two £35 million distribution houses were coming together primarily under Zyro’s impressive Darlington facility to form one £70 million goliath.

With the dust now settled, the company has emerged a leaner yet more efficient machine. Boasting some 250 staff, 22 of whom are on the road and with a new 2,000 square foot southern office and showroom almost neighbouring Luton Airport, dealers will find a business geared up around best practice ideas from both inside and out of the bicycle business. Barker’s experience, along with the wealth of knowledge employed within the north and south buildings gives the business plenty to draw on. Yet ideas don’t always come from within, explains Barker.

“We very often look outside of the bicycle business to observe trends in other businesses and draw inspiration. The challenge for the distribution channel – and I believe we do it well – is to continue to add value while expectations increase both at the top and the bottom. I’m confident that we are good value for our margin for both brands and retailers.”

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In order to retain that value, ZyroFisher’s investment in its infrastructure, both logistically and digitally, has been significant. Acknowledging that the bicycle business is in the midst of perhaps unprecedented change, Barker anticipates that the trade isn’t quite done consolidating yet. With leaner routes to market challenging for share of sales and applying the pressure on traditional routes to market you might expect the business to be concerned by some attractively priced competition.

“I don’t see brands going direct to retailers as a threat,” says Barker. “We do have to check our offering to make sure it provides that added value, but there’s a plethora of reasons why I consider that dealers will not only want, but need an account with ZyroFisher. We’ve free delivery with no minimum, easy daily replenishment of stock and plenty of incentives to really get behind our brands.”

One of these is the recently announced SRAM Platinum Partners scheme, an initiative that is exclusive to the distributor and offers partner stores access to the entire SRAM Group’s portfolio, including an exclusive supply of Zipp and Quarq, as well as the most competitive pricing and free technical returns.

All of this is designed to drive the SRAM Group’s portfolio to the forefront of dealers’ minds and ensure the margin is there to be retained by the shop, says Barker.

“I’d say to all of the dealers that choose Shimano by

default ‘try SRAM’, really. With wireless electronic shifting, Eagle 12 speed groupsets and ShockWiz, SRAM’s innovative product range is industry leading.

The benefits are also there to give dealers the opportunity to earn well and the demand for workshop goods is stronger than ever. People are excited by our market and assessing strongly where the money is to be made in this business and the workshop plays an important role, so it’s worth some careful consideration.”

Noting the evolution of the bike shop toward more service offerings ZyroFisher in January debuted the ID Match BikeLab bikefitting gear to CoreBike visitors. Available to trade accounts, the kit is said to be the first three-dimensional biomechanical analysis software with the study of functional angles – the result of long experience muscle electromyographic analysis. It’s additions like this that Barker feels are crucial, thanks to the personalised nature of the service and potential for longer-term customer relationships, as well as positive word of mouth.

Gradual brand additions to fill holes in what is presently a decent coverage of cycling’s diverse product landscape is very much on ZyroFisher’s radar, we’re told.

“We have capability to handle at least £100 million in sales, or at least that’s the next step,” said Barker.

“We’re not a brand collector, but I think many dealers can see there remain gaps that could be filled and we will look to do that in time. There are, however, categories that are really taking off that we are keen to push. Look, for example, at the smart trainer category, 1X, power meters, e-shifting, gravel bikes and the surge to develop aerodynamics in products. There are clear sales trends that relate to innovation in design, so if you were to ask me for an outstanding category it’d not be a particular segment, just brands who continually drive performance and progress.”

Bringing an e-commerce background to the table himself, Barker says that in modern retail the, “one constant is change”. So when asked how he feels dealers should defend against non-traditional competition he warns, “don’t ever stand still.”

“Never be a ‘me too’ business. Bricks and mortar retailers have the experience in the business, the changing rooms for customers to get to grips with products and many other unique aspects that can’t be easily replicated online. The other piece of advice I’d perhaps offer is look at constants on the high street and why they are successful. John Lewis is a strong example, they know how to drive interaction with products and staff, as well as create an in store experience for shoppers. Certainly they know their demographics and I think the bike industry is still learning in some areas. Female cyclists, for example, tend to shop differently and the experience in store must be a comfortable and familiar one not too out of touch with the modern high street.

Because of the specialist and technical nature of our goods there’s a real opportunity to stand out if your offering is unique.”

“WE HAVE CAPABILITY TO HANDLE AT LEAST £100 MILLION IN SALES, OR AT LEAST THAT’S THE NEXT STEP.”

ZyroFisherb2b.co.uk

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Tutorials to help you keep your customers happy...

Top tips for Tubeless

By Julian Thrasher, ATG Training

THIS instalment of Workshop sees us tackle the thorny (pun intended – I think) issue of setting a wheel and tyre up to run tubeless.

This is the sort of workshop job that can either be really easy with a ‘pop – pop – pop’ – as the tyre inflates nicely onto the rim, or really frustrating, with a ‘pop – pop – BANG’ – sealant everywhere as the tubeless tyre bursts off of the rim, or a ‘hiss – hiss – hiss’ as the tubeless tyre refuses to seal. We’ll walk you through a few top tips that will give you a ‘best practice’ approach when it comes to setting up tubeless.

Firstly let’s talk about the different types of tubeless you’re likely to set up. They come in three main types: TUBELESS CONVERSIONS – where a non-tubeless tyre and rim are converted to run tubeless, using a rim tape and conversion strip. This is perhaps the least consistent approach, we’ve had tyres that go up straight away on a given rim and tyres that either point blank refuse to fit or seal on the same rim.

UST TYPE (UNIVERSAL / UNIFIED SYTEMS TUBELESS) – slightly ironic, because you have to run a UST tyre on a UST rim for best results, making ‘universal’ a bit of a misnomer.

The UST can be set up tubeless without sealant due to the heavy carcass of the tyre (though why would you want to?)

TLR TYPE OR TUBELESS READY TYPE – again this requires you run a dedicated TLR rim and tyre. Unlike UST though to achieve best results you must use sealant.

Tip 1 COMPATIBILITY. Mixing and matching DOESN’T WORK. Trust us on this. We’ve had some huge explosions where someone has tried to install a UST tyre on a tubeless ready rim. The beadhook of the tyre and rim are engineered to work in unison and the UST / TLR interfaces are quite different. Trying to get one to work with another will result in either blistered hands or burst eardrums.

The list of possible combinations that will or won’t work on a tubeless conversion is potentially limitless.

When you find one that works, write it down in your mechanics notebook for future reference.

Tip 2 CLEANLINESS IS NEXT TO GODLINESS. Well it is when it comes to the tyre and beadhook. A little left over sealant in the carcass of the tyre is a good thing as long as it hasn’t set into a custard-like mess. Clean the rim and bead hooks until any sign of old sealant has gone.

Doing so will result in a much better seal.

Tip 3 SOAPY WATER. The rubber carcass of the tyre is quite grippy and will do it’s best to hold onto the rim. This will

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result in you having to over-inflate the tyre in order to get it to seat, risking a potentially customer scaring bang if the tyre decides to give up. Use some soapy water around the bead of the rim before inflating and you should find that it slips into place at a much lower pressure.

Tip 4 STRETCH IT OUT. Some tyres are very tight to fit. If you have an old ETRTO type rimmed wheel sitting in the workshop then install the tyre onto this with an innertube and let it sit overnight. The tyre should stretch slightly allowing an easier fit when it comes to mounting on the tubeless rim.

Tip 5 TAKE THE VALVE CORE OUT. You’ll probably need to do this to install the sealant anyway, but taking the valve core out gets rid of the core restricting the amount of air that can go into the tyre quickly, useful if all you have in the workshop to seat tubeless is a stock trackpump. BTW having a compressor or one of the new tubeless track pumps makes the job WAY easier!

Tip 6 GREASE THE VALVES. Sometimes the tyre and tube will go up easily with that satisfying pop/snap, but then refuse to stay inflated. The majority of times, this can be traced back to a leaking valve. Ensure you are using the recommended valve for the rim you are using and try greasing around the edge of the valve that will seat against the rim or rim strip. A word of warning, excessive tightening of the valve nut can lead to damage of the rim strip (if used).

Again, greasing the valve will help here. We’ve also found that Stans tape is quite stiff, so instead of using a knife to pierce a hole for the valve, use a hot needle. This will cauterise the tape and give a much better seal. If you’ve tried all of this then the last ditch approach is to use clear silicone sealant around the external rim of the valve – we've done this successfully when all else has failed.

We’ll finish off by saying that some tyres are especially ‘thirsty’ and we aim this comment firmly at the tubeless conversion and TLR systems. This means that the tyre will absorb a lot of sealant into the carcass before holding air. Keep adding sealant and shaking the tyre to ensure even distribution around the tyre. We like to rest the wheel flat on a bucket so that the sealant can work its way into the sidewalls of the tyre, flipping every half hour or so to ensure an even coating By following these tips you should find that your next tubeless install goes a lot more smoothly – or at the very least you’ll know what to recommend to your customers to ensure it does!

Happy spannering!

NONSTOP Mobility!

The new CONTACT Plus: Reaching your destination safely and comfortably.

Permitted for e-bikes up to 50 km/h.

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CONTACT Plus

(( PROFILE KALKHOFF ))

MOVERS OF MOBILITY Approaching 100 years since production of its first bicycle, Cloppenburg’s Kalkhoff has been in the mobility business longer than most and nowadays brings a comprehensive portfolio of tail-wind-giving E-bikes to the trade. Mark Sutton speaks to UK account manager for the North, Richard Lane, about selling cycling style to the masses…

W

ith the UK market in the midst of electric fever you’ll be unsurprised to read that Kalkhoff one of the market’s veteran producers – is on a steep trajectory. Though not exclusively an electric bike brand, the firm did, for good reason, place increased emphasis on its pedal-assisted portfolio at the recent Eurobike show.

Traditionally Kalkhoff’s heritage rests solely in catering for the “cycling in comfort” market, insists UK account manager for the North Richard Lane and for that reason dealers should consider the firm much more than just another E-bike brand, we’re told.

“As a company our background is focused entirely on making cycling an attractive proposition. In the saddle comfort is crucial in every design.

We’ve never tried to be anything else and indeed I think it’s true that the brands succeeding are those who understand cycling in comfort within the urban environment,” explains Lane.

The closest Kalkhoff comes at present to a departure from traditional urban is the newly announced Entice, landing in early 2018 and capable of housing a 47c

Contact Kalkhoff Phone: +44 (0) 800 0569968 Email: sales.uk@derby-cycle.com

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tyre. Though the E-bike demographic is fast diversifying, most Kalkhoff bikes build in an element of utility, enabling people to see their bicycle as a viable transport mode for most easily cycled journeys. In visualising the target demographic the firm is far from pigeonholing.

This is evident in the brand’s marketing and press imagery; much of which paints the picture of a brand embracing younger generations taking to electric bikes as part of their daily routines.

“Being the manufacturer of the bikes we’re quick to respond to market trends, stock requirements and feedback,” says Lane. “From a dealer’s perspective, this is very much an instore product. While customers do still research online, the nature of our product means customers are best served in store where we encourage dealers to drive demos and build a relationship with the customer. In the UK the market has been steadily growing for a long time, but the past three years have seen a steepened trajectory in genuine interest.”

Selling on average for £2,500, with available bikes retailing from £1,500 to

£3,300, price point will be a big attraction for those dealers taking stock.

So, where does parent company Pon come into the Kalkhoff mix?

“The honest answer is that Pon doesn’t often get too heavily involved,” says Lane. “The backing of such a large and diverse company has enormous benefits in terms of enabling our dealers to sign up on great terms and to earn a good margin on a great value package.

When it comes to technology, some knowledge is shared, but Kalkhoff was already a sizeable company prior to linking with Pon and so the brand retains its own very unique identity with its own innovations.”

Though based largely on pre-orders, stock levels are carefully monitored with monthly meetings to determine which lines are selling well and may require additional production. Delivered inside seven days from Germany if in stock, Kalkhoff backs dealers further with a 10-year frame warranty and a three year guarantee on Impulse and BMZ motors and batteries. Bosch systems are covered by a standard two-year warranty.

KEY LINES FOR 2018 CITY Kalkhoff’s Image is a highlight of the comfort segment with fully-integrated batteries and a choice of three equipment packages, three colours per model and two motor platforms.

Perfect for cruising the city in comfort, the Image has a situp-and-beg style geometry, placing the rider’s eyeline above the traffic while on the move. When parked, features like a handy kickstand and built-in rear wheel lock keep the bike secure, while the inbuilt rear rack will happily accept a load of shopping.

Clean lines feature throughout the Kalkhoff portfolio and the Image is no exception with routing channelled via the downtube, which also plays host to the integrated battery. As is common throughout the portfolio, a choice of Bosch, Impulse and Neodrive spec is on offer.

TREKKING The Endeavour product range represents integration for everyone, offering nine differing spec sheets and a variety of budgets met. Three equipment packages, three frame designs, three drive options and up to three colours per model mean that the range caters to almost all possible requirements.

Targeted at the young and fashionable commuters, customers have a choice of three frame stepover heights, Bosch, Impulse or Neodrive motors and understated or ‘be noticed’ colour schemes.

Shown here is the Move i9 model, which comes with an Impulse EVo RS drive and an integrated lithium-ion downtube battery offering either 540 or 418 Watt hours.

Relaying information back to the rider, Kalkhoff has specced a stylish Evo Smart Compact display, enabling the rider to connect their mobiles via Bluetooth, as well as keep USB devices charged on the move.

URBAN One of Kalkhoff’s quirkier builds and one that is certainly wellsuited to urban environments is the Durban compact.

Rolling on 20-inch wheels, this is Kalkhoff’s smallest E-bike and one which runs on a new system dubbed Groove Go, a motor paired to a 7Ah Battery and rear hub motor. As a result of the shorter wheelbase, the Durban fits the bill for anyone limited on space and requiring a tail wind to help as inclines approach. Further bolstering its appeal for those who may live in apartment blocks, the Durban Compact is one of the lighter E-bike around at 130kg.

Bolstering its value for money, you’ll note an aluminium rack up front, a kickstand, as well as mudguards carrying automatic lighting included in the package.

Clean lines will prove a big draw for the imageconscious shopper

Customers can choose from a variety of motor and frame specs

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(( PROFILE XPLOVA ))

ACE IN THE HOLE Recently NRG4 cycling announced a distribution deal for the UK and Ireland with a giant in the computing arena. Mark Sutton speaks to Andy Perry about the Xplova product and discovers why the cycle computer arena may have hotted up once more with this brand’s arrival…

NOW in stock with NRG4 you’ll find a curious brand, which at the present time has a slim product portfolio, headed up by the 120-gram smartphone-esque Xplova X5 Evo. A wholly owned subsidiary of tech giant Acer, Xplova has been on the map since 2008, albeit as a group project by Taiwanese bike enthusiasts to begin with. Now on to its fifth generation of computers, the X5 holds claim to being the only unit on the market with an in-built wideangle camera that offers the ability to record various action videos with modes including data-linked auto recording, time-lapse photography, recycle recording (or dash-cam mode) and manual recording, potentially eliminating the need to buy a standalone camera.

So what can we expect down the line from Acer and NRG4’s link up?

“As you might expect from a tech giant like Acer, there are plans to introduce a range of GPS cycling computers in addition to X5 Evo. We will also soon have the i3 (Acer’s mid-range cycle computer) coming up later this year. We’re also looking into the feasibility of combining 360 VR technology with cycle computers,” explains Andy Perry from NRG4. “Xplovas’ expertise has been crafted from almost 10 years’ experience in the production of cycling GPS computers along with the vast resources made available from parent company Acer.”

With what may well be considered industry-leading know-how in the field of computing, the spec sheet of the Xplova X5 Evo goes further than just an in-built camera. For starters, customers are granted free access to a world-wide network of OS mapping, can customise cycling route plans with SmartSigns

(customised points of interest) + SmartSign guidance and plenty more, all delivered via a 3” touchscreen sunlight-readable display.

It’s what the computer can assist the performance athlete with that’s perhaps most impressive. In addition to the free mapping access, Xplova has made available free access to training plans created by professional cycling coaches, giving cyclists a virtual personal trainer as they ride. Cyclists can transfer their performance data to their Connect App to monitor the progress, or to upload it to TrainingPeaks or Strava to analyse the data and compare rides against others.

The camera is a further perk of this one-computer-does-all unit. The 120 degree wide-angle camera offers the ability to set different recording triggers, including heart rate, location, speed or quickly by using the REC button. The heart rate link may prove particularly valuable during those high speed mountain descents where you may find it difficult to turn a camera on, or in the case of an incident that may need to be recounted as evidence.

Should your customer choose to, footage can also be live broadcast via 3G, or uploaded in an instant to social networks through the app. All things considered, the Xplova will deliver a battery life of around 12 hours on a single charge.

Dealers signing up with NRG4 to become an Xplova partner will be supported by a series of point-of-sale and marketing support, including product display, video display, post cards and brochures.

To enquire about carrying Xplova, contact NRG on 0151 422 4915, or via sales@nrg4cycling.co.uk.

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(( PROFILE MAGURA ))

BETTER TOGETHER The past few years have seen a string of collaborations for the Magura business, from automotive drive giants to Bosch – an industry go-to for E-bike drives.

Mark Sutton speaks to Tony Barton of Magura Bike Parts UK Ltd about what such partnerships higher in the chain offer the bike dealer…

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he Bosch Magura partnership has borne plenty of fruit since the two German neighbours began forging global links a handful of years ago. Most recently, as detailed on our digital platform, we saw what was touted as a world first in bringing ABS technology to bicycles. Though a 2019 model year product, European trials are underway on fleets of hire bikes to better understand the real world applications. Undoubtedly the development is a sign of the times and emphasises the weight with which the pairing is throwing itself into innovating for a future where the electric bike will be at least as prominent as the bicycle.

As Claus Fleischer, CEO of Bosch eBike Systems, explained at the launch: “In order to establish this modern form of mobility for the longer term, safety is a pivotal factor for eBikers and their environment.”

It is for that reason that the pairing of power and ability to effectively stop it makes perfect sense and why you’ll now find both in the USA and the UK headquarters that house and service both labels. Domestically, the UK’s 2,500 square foot facility has been operational in the

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Leicestershire countryside for nearly a year and is the dealer’s first port of call for any Bosch (or Magura) question, warranty issue or dealer training for both labels.

“The pooled resources of the e-mobility giants and the collaborations with other experts in the field will result in sped up research and development, so it’s an exciting time to be serving this fast-moving market. By opening a UK centre we’ve reduced the former week-long lead time from Germany. We’re now capable of offering next day delivery and a reduced cost to the dealer,” explains aftermarket sales and service manager Tony Barton.

Indeed, in June of this year, Magura partnered one of the automotive world’s largest drive manufactures, ZF of Germany, as well as BrakeForceOne and Unicorn, a partnership that will focus on the development of electric bike drive systems. This collaboration, it is hoped, will “redefine electromobility,” something which the bike dealer stands to benefit from.

1,200 bike shop accounts now have swift access to both Bosch and Magura via the Midlands headquarters, which is ready to deliver both in-house dealer training, as well

board with Magura originally using HS33 rim brakes, has brought enormous kudos to the brand. His signature MT7 sold its 1,000 units in record time. He’s liked immensely, even by non-cyclists and everyone wants to know what brakes he’s running,” says Barton.

Awareness of Magura’s E-bike specific solutions is growing fast too and the firm is growing volumes quickly. OE spec rim brakes, in particular the HS11 and HS33s, are specced to city bicycles, we’re told.

So what’s available for dealers committing to Magura?

“We offer a very strong margin at standard trade prices and further discount options for Pro Shops, which is our equivalent of Shimano’s Service Centre status. Opportunities here are normally limited to one per county in the UK, but it is well worth a dealer’s consideration if they desire to become the local specialist. Retail prices have generally reduced now we’re direct to dealer too.

“We’re big believers in replenishment and so recommend starting with some service replacement stock like the MT2 at SRP £46, a top quality replacement brake that will satisfy many customers’ needs and sell year round. Boxes of five brakes come at a slightly reduced rate for dealers to bolster their margins.”

Hoping to be the “benchmark” for UK service, Barton’s team aspires to deliver industry-leading back up. With that in mind, courses are offered throughout the tail end of 2017 and into 2018.

“We don’t let a dealer leave here Contact details without having serviced a brake just to BOSCH SERVICE CENTRE get to grips with how simple the system is. Everything’s mineral-oil based too, Tel: 02036 844877 all three pad compounds are organic MAGURA and each system modular, so it’s a really simple product for the mechanic.

Tel: 01455 823303 The MT2 through to the MT8 require Email: service_uk@magura.de the same skillset,” concludes Barton.

as offer visitors quality riding right out of the front door.

Those with an account also gain access to third-party brands including Fahrer, Miranda, Busch&Muller and Miche, among others. This is all part of the plan to become a, “one stop shop for electric bike goods,” explains Barton.

“We hope to have a team of around five by the end of 2018 to align with the projected growth in electric bike sales. There’s a new demographic coming through, it’s no longer just the elderly couple looking at a pair of bikes, you now see all types of customers spending serious money on eMTB’s and the whole off-road market is beginning to shine.”

A CASE FOR MAGURA Marking the 30th anniversary of the legendary Hydro Stop (HS) Series, visitors to Eurobike will have spotted the new HS22, now available at an incredibly accessible £75. Encouragingly, that’s far from the limit of accessibility to Magura on a budget.

With a new low entry price point of just £46 for Magura’s MT2 disc brake the firm is far from just going after the performance market. With the very same five-year leak proof warranty, dealers are able to offer customers immense peace of mind and performance on a budget. What’s more, having benefitted from trickledown, dealers also benefit from the same ease of servicing from higher in the range.

Unsurprisingly, careful consideration of the price points has assisted Magura to reach its best ever year of aftermarket sales in 2016 globally and, “2017 is already up on last year,” adds Barton.

“People have always been really tuned in to Magura’s braking catalogue, but I think the 2016 launch of the Vyron Dropper post generated a fresh buzz that’s lasting today, certainly now you can get hold of one for a similar price to a Reverb. Having Danny MacAskill on

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online retail

By Colin Rees – Retail Sales Trainer & Business Consultant

THE BIG, BAD INTERNET... PART 4

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his series has looked at ways a high street bike shop can compete with the loss of sales from internet buyers, especially the really irritating ones who come in suggesting they wish to purchase from you, capture all the technical information they need, check out the bike, then sit in the car park and order it online. Nothing is designed to stimulate a fiercer reaction from bike shop staff, but in fairness it happens everywhere, to all retailers, all the time. It needs to stop and here's how.

Last issue we looked at creating a customer care environment to compete in an area the internet cannot; and how an owner needs to think carefully about his own attitude to change. We talked already about staff, but they are a subject in their own right because the pinnacle of management success in a retail environment, in my opinion, is teamwork.

I recall telling someone once, the only problems I ever had when I started my business was the day I took on my first member of staff. I quickly realised why: They were not me. This means they did not work, or think, the way I did and so in my mind, they were not as effective as I was. Many years later, I reluctantly learned that we are actually all different. That was the day I clicked on to the critical importance of training, more like psychological persuasion, actually, but by discussing and communicating, I reached a place in my own mind where I found it is possible to change attitudes.

Recruitment is key. Do bike shop owners look for people who love bikes or people who can sell them? Is the best combination a chap with an appealing personality who is willing to accept his knowledge of bikes might be lacking? The first step is to establish what you

“DO BIKE SHOP OWNERS LOOK FOR PEOPLE WHO LOVE BIKES OR PEOPLE WHO CAN SELL THEM?”

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need, not what is available. Building a good team demands waiting for the right people and this makes recruitment an on-going activity which, hard though it might be, becomes refinement in a successful business.

When interviewing, would the average bike shop owner give applicants more than one interview? My word, what they reveal the second time around that you did not pick up the first time can be mind blowing; well worth the time. Do you have a list of skills or attributes in front of you and mark each applicant out of ten for each personality factor? Successful recruitment is all about planning.

In travelling around the UK, I find it rare to see businesses that run the way I ran mine when I was employed as a branch manager in a retail situation. Opening time was 9.00am. At 8.00am everyone was there, it was someone’s turn to make coffee for the team and it was a daily gathering. We took turns to be chairman; we had a typed agenda in front of us with action points from yesterday. We went through them first to see what might have been missed and we did not criticise. We were all busy and we prioritised tasks. Integral was discussing the day to day bits we needed to know and thinking strategically. Then there would be 10 minutes of training, deciding what we would all strive to do that day in terms of technique, discussing weaknesses openly. Nobody minded weakness as we were a cohesive team. My job title was branch manager but I was just one of the team that planned, guided and helped, working as hard as everyone else because, like all of us, I was only interested in one thing – my bonus and how close we were to achieving it. That was the same for us all. We were each paid a bonus for meeting the target and 20% of anything over the target, we shared.

Every single month we broke the target however high it was set. We were the top branch of 200 the entire time the team was together. They had to get extra staff in the accounts department to clear all the cheques and when the boss sold the business, he became around the 150th wealthiest UK businessman. As for me, I went off and started on my own.

So constant communication is vital, every single day, to build the team, to get ideas, to look at targets, to solve problems together, hear suggestions, make decisions and ensure day to day customer expe-

About Colin...

Owner of Quest Consultants, Rees worked in the industry for decades before being asked to draw up a sales training plan for his employer. Spotting a gap in the market, Rees went full time, going on to teach with Raleigh, Giant and many more independent and bike chain stores. If you have a problem, if no one else can help and if you can find him, maybe you can hire Colin to train your staff...

www.colinrees7.wordpress.com

Colinrees7@gmail.com

riences are always at the top. Training reminders are also important. These elements really cannot be done ‘on the job’. Training does not have to be done by professionals although clearly, they are specialists. Training is the leader’s job and a daily session serves to remind motivated people, who, like all of us, forget, when daily routines interrupt mental progress.

The silent salesman, the store, is also critical. Is it time for a repaint? If I come to you and have a good experience, do I know where I’ve been? Is your logo and strapline predominant? Is the place exciting, colourful, cheerful, warm, welcoming or like many bike shops I have trained in, is it freezing to save cost and the same as it has always been? How often does your window change? Is it a challenge or an opportunity?

Supermarkets are at the cutting edge of modern retailing. Every time I walk round one, I see an idea that could be used in a bike shop. But in any retail space, your representatives, your staff, are the difference between the store ‘jogging’ or ‘prospering’. I was on top of a bus when I saw a big sign in a bike shop window saying; 0% finance. Located in a run down area, that guy had exactly the right idea to reassure people a purchase could be within their reach.

So, how confident are your staff? Do sales staff hide behind the counter where it is safe, as they do everywhere? One shop I went to threw it out after I left. The place for a sales person is among the product, cleaning, polishing, stacking, fixing accessories onto show bikes – why do we never see accessories on bikes for sale?

That puts your people close to customers entering, not to pounce, but to welcome, engage or allow to wander.

These are basics we need to examine in detail; what is the customer experience we provide? We need to be cheerful and polite. Other things often missed but go without saying are the need to look clean and professional and above all, we need to focus on how to help every customer who comes in, not how much we can sell them, as that’s a fallacy. Changing the atmosphere surrounding sales and selling, targets etc to helping ‘give customers the best riding experience they can have’, illustrates the change of attitude needed. The customer sees that, comes back and turnover goes up.

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(( SOCIAL MEDIA TRAINING ))

MONETISE SOCIAL MEDIA WORDS: Jonathon Nunan, cycling industry consultant and director of Better Bike Business

A

minority of bike shops have their own website and even fewer have their own ecommerce site.

The fact is, many IBD retailers still run their stores with cash tills, price stickers and written work cards.

Yet nearly every bike shop has a Facebook page. Many will have either a Twitter feed, Instagram account, Pinterest board or a LinkedIn profile. Social media is quite simply the primary way bicycle retailers connect and communicate with customers, provide information about their business and profile their products. In short, stores are using Facebook and other popular social

media sites as de facto company pages and ecommerce sites, or are at least hopeful they can.

‘Social media’ platforms are primarily designed for communication, content sharing and engagement.

They’re not really designed to replace ecommerce platforms - which they don’t - not yet anyway.

That said, for businesses, nearly all marketing and communication efforts, the end game is undeniably sales. Most businesses these days are working harder and smarter on “monetising” their social media. And the major social sites are working on helping you do exactly that.

THE FOUNDATIONS 1. Firstly understand the purpose, functions & strengths of each social media platform.

The first thing to understand if you want to monetise your social sites is to understand each social site’s primary functions, strengths and weaknesses. Every social platform is quite different and designed to do different things well. But in general, their purpose is to help people engage, interact and be entertained or informed.

2. Adjust your content for each social media platform.

If you want to convert your followers to purchasers, don’t just regurgitate the same content, in the same format, at the same time, across all your platforms. Some sites are more visual, more light-hearted, more immediate, more conversational or

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more business-like than others. And most of your followers will be following you on multiple platforms. Don’t bore them or disengage them because you’re lazy.

3. Don’t go straight for the money.

Build a passionate audience and earn your customers’ trust and support first.

You need to play the game properly.

Respect what people primarily want from their preferred social media platform. Give that to them firstly and then choose your moment carefully to ask for their business. A great example for those in the bike industry is Rapha. They spent a long time building their tribe, through focused, authentic, cultural, visual and emotional content; before they even talked products or tried selling to anyone. They were just bought by

members of the Walmart family for ten times their annual turnover.

See your social media as a sales funnel: Not the bucket.

4. Have a plan. At least 3-6 month ahead: across all your platforms.

Just like bike racing, it’s always good to be nimble, responsive and timely.

But you never start without a plan.

Always know where you want to be, when you want to be there and always ahead of time. If you’re always responding, you’re always following. You’ll be less stressed and more effective.

5. Consider using a social media management tool like HootSuite, SproutSocial or HubSpot.

Tools like these are cheap to subscribe to for the basic packages that will satisfy most IBD operators.

(( SOCIAL MEDIA TRAINING ))

MONETISE SOCIAL MEDIA They’ll help you plan, pre-load, execute and monitor all your social media output across all platforms.

Leaving you to focus on your ‘day job’ - fixing and selling bike stuff. If you’re going to “monetise” your social media efforts, you firstly need the content to be engaging, well timed, targeted and consistent. But you also need to satisfy the customers you’re hopefully creating. Investing in affordable management tools like these, will win you time and make you more effective and productive.

6. Coordinate and align your content with your other marketing and sales activities.

It is well known that the best way to maximise the effectiveness of your marketing and communications, is to run it in concert with all your marketing and communications channels and activities at the same time. Each gives strength to the other. It sounds obvious when you say it out loud. But like most truisms, it’s still worth pointing out all the same.

really sleep. Keep looking after, feed and make the beast happy and it won't burn your house down. Make sure someone is always assigned to monitoring and managing your social media pages and ideally knows what they are doing. Otherwise, monetising your social media could quickly become the least of your concerns. If you don’t have someone in the business capable of doing this, hire someone externally.

9. Understand, define and stay true to your audience.

Back to Rapha again. They clearly visualised, researched, listened to and understood their audience intently. Hence they knew who they were talking to and how they should be engaged with - from language, to visuals, to topics and content in general. And they started by talking to that same person or group of people.

You can’t convert a tribe to sales, if you don’t have one to begin with.

7. Regularly monitor your activity and response data. Learn and evolve accordingly.

If you’re not monitoring your social media activity and response data, you’re basically wasting your time. You wouldn’t do product orders, without first looking at the stock or sales reports. You’ll never know what you’re doing well and what you’re not doing well, meaning you’ll miss opportunities and likely repeat mistakes.

10. Proactively build and nurture your ratings and reviews.

Like it or not, social media ratings and reviews matter. A lot. Proactively encourage them, ask for them and even reward or incentivise them. And if you get a bad one, always be on the front foot to respond, appease and hopefully turn that customer around; and be seen to do so. Don’t build and nurture your ratings and reviews and you will be doing whatever is the opposite of “monetising” your social media.

8. Make sure someone is in charge.

Like, all the time. And knows what they’re doing.

Social media is brilliant. But its also a living, breathing beast that doesn’t

11. Use your social pages as a customer service tool.

Really, this is an extension of the previous point. You have their following or engagement. You hopefully

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have their support and their business.

Use the social medium to maintain the relationship outside of the store.

Not only will they see it and appreciate it, but so will your other followers.

We like to spend our money with retailers who make an effort, give great service and go the extra mile.

12. Leverage your audience. Turn your customers into ambassadors and advocates and reward them for their trouble.

Pretty self-explanatory - but all the most successful brands and businesses on social media do exactly this. They actively turn their followers into influencers, recruiters and sales people. Offer them a free service, bike wash or perhaps a pair of shop socks as a thank you. The reward won’t have to be of great value, as long as the gesture of thanks is there. Enthusiastic followers will want to help convert others, as it serves to reinforce their own choices and preferences.

13. Transition your followers from online to in-store.

Having lots of ‘followers’ is like having lots of credit card transactions you never put through the Eftpos machine.

They’re just numbers and they don’t pay the bills. One of your aims with your social media content and posts, is to periodically encourage your followers to come into your store and experience it first hand. At the end of the day, we are all human beings and we always respond better to face-to-face interactions and to tangible product experiences, such as actually picking up that pair of carbon wheels, or going for a whirl on that latest E-bike. Turn your followers into actual customers.

Call me crazy…

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(( STOCK MANAGEMENT ))

CALCULATING SUPPLY & DEMAND

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or a while now, we’ve been promoting the importance of IBDs monitoring their stock turn to help influence sales and marketing strategies. It’s a dry but useful (and hopefully profitable) discussion. However, stock turn alone is often not informative enough (but you’ve got to start somewhere). So in this article, we’ll shift it up a gear and look beyond stock turn, to indicators that can drive better-informed decisions. Prepare for more dryness but if you’re a retailer and making money is your desire, read on…

To briefly summarise, stock turn essentially tells you how many times you buy your stock, sell through it, then repeat that process. So you might think the higher that number, the better you’re doing but that isn’t always the case. Having a super high stock turn probably means you’re not holding a great deal of stock, instead you are regularly replenishing a smaller stock holding. This is great in terms of not having a load of capital stuck in aged stock that you’re not profiting from, but it could also mean you’re missing out on profit by being priced too low or missing sales opportunities when you’re out of stock between replenishments.

So if you’re not aiming to get stock turn either as low or as high as possible, where is the sweet-spot in the middle?

It depends what it is that you’re monitoring with stock turn.

So let’s take a step back and look at what you’re trying to achieve. Ultimately, you want to sell all stock at the highest possible profit margin. It’s all about balancing supply and demand. It’s best to break it down into manageable chunks, so monitoring it by brand and/or maybe product type too, is often the best approach.

Forecasting methods and buying strategies aside, once you’ve made a buying decision, you’ve bought or have committed to a certain quantity of stock at a certain price.

Simply put, to avoid digression, sometimes you’ll get it just right, sometimes you’ll miss a good thing and kick yourself for losing out on a bigger slice of the pie and sometimes you’ll buy a real stinker and want to drop it by any means before it sticks and leaves a nasty stain on your balance sheet. Fear not, beyond that buying commitment there are strategies that can be employed to maximise (or salvage) the profitability of that purchase.

Remembering we’re going to look at it by brand and/or product type, the next thing to consider is that stock generally has a finite period by which it can be sold profitably, usually a season or a year. After this time, demand drops off because it’s already been met or there’s a new exciting alternative on the horizon. If it sells too slowly throughout that time, you’ll be left with stock that more than likely needs discounting to move it. Otherwise, that stock will age ever further into the depths of obsolescence, forever tying up capital that could be better invested. The more those leftovers need to be discounted the more it decreases the overall profitability of that brand for that season. If it sells too quickly during that time, you’ll end up having

zero stock before that season and demand has ended.

So how do you know if a product is selling too quickly or too slowly? You need to monitor the rate of sale compared with how much time (demand) you’ve got left to sell it.

Stock turn is essentially your rate of sale but, as mentioned, it’s often difficult to interpret the number. So you can further use stock turn to measure ‘weeks cover’, i.e. based on the current rate of sale, how many weeks will your current stock holding last for? You make use of this number by comparing it to how many weeks are left in the season, or whatever criteria you use to define the saleability time period when there is still a demand for those products. If you’ve got cover for more weeks than there are left in the season, this indicates a slower rate of sale than you require. If you’ve got cover for less weeks than there are left in the season, this indicates a faster rate of sale than you require. It can take a while for this data to build up, so that stock turn and weeks cover is accurate. Generally speaking, it’s not worth reviewing this more frequently than every month If all the previous pointsd were packaged in a box, it would require an 'INTUITION REQUIRED label to be slapped on it!

There is no all-in-one retail report from any provider that will tell you how to run your business without you having the insight and intuition to apply reasoning to it and factor that into your subsequent decision making. However, something is always better than nothing and if you can find a provider who will give you guidance on factors outside of the data that requires consideration, you’re onto a winner.

So, with the numbers assessed and intuition applied to the decision of whether you are selling at the correct pace, how do you adjust your sales and marketing strategy to influence the balance of supply and demand, maximising your profit margin? The answer to that question easily warrants a separate article. In summary, look at your marketing and pricing, including your opposition in both.

The different formulas for stock turn and weeks cover are well documented online and I’ve got limited space on the quality paper stock of this fine publication, so I haven’t included them here. There are plenty of ways to legitimately calculate these values. The important thing is that you understand the numbers and apply your intuition to what can influence them. If you keep the method consistent you’ll have useful tools to drive your sales and marketing strategy. So useful, that one of our clients has used this strategy to help grow their turnover from £300k to £1.6million in five years, while simultaneously maintaining or improving profit margin and only increasing their staffing requirement from two to five, all simply by balancing supply and demand.

WORDS: David Gaule

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ask the boss

DARREN MABBOTT, MANAGING DIRECTOR, SILVERFISH UK

We often ask retailers and manufacturers their thoughts on the industry and its evolution, but what about the middlemen? This month we pin down Darren Mabbott, managing director at Silverfish UK to ask his thoughts on some topical trade discussions: Bike shop numbers: Will the dip plateau and what might those left look like?

We’re approaching a plateau, though we may still see further reduction in shop numbers as consumers shift online.

Lots of stores opened post-Olympics and during the impending road boom, but that never materialised on a sustainable level, so contraction was inevitable. We lost some long-term customers last year, but so far this year we haven’t seen much change.

At present, it’s certainly the most challenging time that I remember in my 25 years in the industry. We’re all having to work a lot harder for a lot less return.

What stores will look like moving forward is difficult to predict, but I would expect our strongest retailers to continue to thrive. These stores understand the need to offer a genuine retail experience, alongside a solid online offering. They are switched onto the importance of relationships, which includes maintaining or building mutually beneficial relationships with suppliers, focusing on building stronger ties with their own customer-base and creating a real sense of community around the shop. We have a number of key Silverfish customers who do this well and have become ‘cult’ stores.

nent manufacturers will continue to drive innovation and trickle down new technology, and bike manufacturers will continue to purchase from component manufacturers on a model year basis, which ultimately dictates product years to brands. My concern around this sits just as much with whether the technology being released is market ready as manufacturers race to market to steal space which can lead to poor consumer experience and bad press.

It’s not an ideal situation, but model years only become a problem when the big guys clear huge discounted volumes, because of minor changes to specs.

Some clear stock as early as March and that impacts everyone selling current model year ranges. I do wonder whether this is wilful inventory mismanagement. It can’t always be driven by the sole purpose of clearing stock to allow you to launch your new bike range first? I’m not aware of any other industry that actively encourages retailers to start discounting products in their key-selling season.

Ultimately I think IBDs should voice their opinions more and vote with their wallets by selecting brands and suppliers that support in-store and that don’t encourage this annual craziness.

Model years: How might the industry’s attitude change?

I’m not sure it will. Cycling products are evolving at an incredible rate and no brand wants to be left behind. Compo-

Manufacturing: Do you foresee the industry being able to reduce lead times or improve forecasting?

Lead times are a challenge for everyone, but with good communication and effec-

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tive management it’s not insurmountable.

Silverfish has always invested heavily in stock to support our dealers, but with expanded ranges, massive SKU counts, various international standards, multiple wheel sizes and rapid technical innovation, supplying on a just-in-time basis is becoming more challenging.

The reality is industry lead times are increasing. We do everything we can to lessen the impact on dealers, but for most of our brands we are purchasing 4 to 6 months in advance for products with zero customer forecasts. Some dealers recognise the pitfalls in this approach and will seek to guarantee stocks of key lines throughout the season by committing to forecasts and forward orders, but these are the exception rather than the rule.

If the E-bike bubble eventually bursts, what replaces it?

E-bikes have been in the marketplace in one guise or another for a long time so I’m not sure the bubble will burst.

Though I don’t own one, I do love E-MTBs. There’s no denying that they’ve seen staggering growth in most of mainland Europe the last few years, and we’ve even seen significant sales increases in the UK. Even at the specialist MTB end of the market, our Mondraker E-MTB sales increased more than three-fold this year versus last year.

One of the advantages Mondraker offers is they are genuinely pushing the boundaries of geometry and suspension design. When they apply the same principles to their EMTBs the result is mind boggling.

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Distributed by Cooke Components Ltd. www.cookecomponents.co.uk info@cookecomponents.co.uk

KEY LINES FOR THE SEASON AHEAD By the time you flick through these pages we’ll be staring out into the darkness of a fast-approaching winter. With that in mind we look at some key lines to keep registers ringing and customers battling through the slop…

KALKOFF BERLEEN

PRAXIS CARBON LYFT HD

Kalkhoff: 0800 0569968 Falling well and truly into the “can you tell it’s an E-bike” category, Kalkhoff’s slick new Berleen snuggly hides the lockable 20-cell battery in the underside of the downtube, while the compact rear wheel motor assists a rider to counter a headwind.

Not ending with the frame, Kalkhoff’s design team have drawn in some excellent detail, with a 60 lux headlight and cable routing integrated within the onepiece cockpit. Furthermore, the controls are seamlessly integrated into the top tube, with a Bluetooth module allowing connection to the Kalkhoff display app – now free to download on Apple and Android phones. The app, when live, offers turn-by-turn navigation and a number of bike computer functions. LEDs further indicate the level of charge remaining.

Upgrade Bikes: 01403 711 611 The new Lyft HD carbon hollow crank is an enduro and trail-suited crank beefed up for the more aggressive rider.

Praxis’s regular Lyft tips the scales at 454 grams with a 30 tooth ring, while the Lyft HD is some 80 grams heavier thanks to a tougher carbon layup and a thicker M30 axle.

With its alternating tooth profile, instead of a traditional wide narrow, Praxis's new Wave Tech ring gives great retention of the chain with the added bonus of a quieter running drivetrain. Furthermore, the system is 10 and 11-speed compatible, as well as new SRAM 12-speed drivetrains.

Stock is available now via distributor Upgrade Bikes.

MET TRENTA 3K CARBON

EXPOSURE SIX PACK SYNC Direct to retail: 01798 839300 The Cycle Show will be the UK public’s first opportunity to see the new 2018 range from Exposure Lights.

Updated, brighter and now with the ability for selected models to SYNC with smart phones via Bluetooth, for the first time enabling personalised settings, Exposure’s offering becomes increasingly compelling when compared to the competition.

The Six Pack, retailing at £474.95, is a prime example of Exposure’s popularity for night riding, beaming a huge 4,750 lumens at max power. This is managed via a wireless remote, ensuring there’s still no cables to snag on branches. Also featured for 2018, the Six Pack carries an OLED display, Smart Port Technology, Reflex Plus and intelligent thermal regulation.

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Direct to dealer: met@met-helmets.com A culmination of MET’s thirty years making safety gear for cyclists, the Italian-made Trenta flagship lays claim to performing in line with the market’s very best helmets for performance road cycling.

In backing that claim, MET’s R&D team discovered that the carbon’s elastic modulus allows the manufacturer to reduce the density of the EPS foam by 20%, without affecting its capacity to absorb energy.

As such, the design utilises parallel ‘ribs’ linked from the centre of the helmet by a carbon cage and embedded into the liner, making it dramatically lighter compared to a traditional construction. It also claims to chop 7% off a riders’ drag at 45 km/h over its prior flagship helmet.

Inventory should be made available to stockists by the end of 2017, though dealers are advised to secure stock orders for the 19 vent, 215 gram lid now.