Tagged: IBD

Are we who we want to be?

My very good friend, and sometimes “boss”, Patrick Brady has recently penned a pair of posts at his wonderful website, Red Kite Prayer. He’s a smart guy, with an incredible talent for finding words that get to the heart of the topic, and in the case of the two pieces recently, they are uncomfortable topics within the broad scope of the cycling “industry.” I say “industry” because these issues impact manufacturers, media, consumers, athletes … every aspect of the business, sport, and activity of cycling.

Patrick calls out the fact that bringing these topics up is akin to touching the third rail of the subway, and he’s right. But it needs to be done. Again and again. One of my favorite musicians is Colin Newman, front man of 70/80’s punk/techno band Wire. In 1986, he released a solo album called Commercial Suicide. It’s one of my favorites. Maybe I’m playing with professional suicide (again), but it’s worth the effort to save us from ourselves.

It’s a very uncomfortable truth that sexism is alive and well in our “industry.” We’re no different than any other industry, agreed. Sexism is still rampant throughout every facet of our culture and society. Humanity has a problem with sexism. That said, that does not mean we should continue to institutionalize it or not fight against it within our little world. It’s also true that the overwhelmingly white, and male demographic of the “industry” is not unique to us. And it’s also true that as you migrate down price range, the demographic is much more diverse. But, the marketing of the sport/ lifestyle, the demographic of the industry itself, and the leadership of the sport is largely white, male, and getting older.

Let’s say we bring in new and diverse consumers to cycling. Many join our party all on their own, not because our marketing or outreach was effective. A hispanic woman buys a bike at Target, or even Wal Mart. She rides and decides she likes cycling. She then visits an IBD to see what her next step up might be. The IBD world is largely male- regardless of skin color. Maybe she picks up a magazine in the shop, and thumbs through the pages. As a woman, especially a woman of color, she is very unlikely to see anybody who resembles her. Let’s swap “hispanic female” for “black male” and the story is nearly identical. There are a few excellent examples of black men in the sport and business, but they don’t exactly make it into print ads that might help to paint a more diverse image. These examples are grossly oversimplified, but they’re still real.

We have a problem. “We”, meaning the cycling business (and especially in North America), have made a (bad) habit for decades of mostly trying to sell more bikes to an existing consumer base, especially at the upper end where nearly all of our marketing dollars are spent. The obvious problem is that those consumers are getting older, their garages are getting full, and their numbers are dwindling. If we simply look at sustainability and commercial viability- profit- it makes lots and lots of sense to do a better job of trying to grow that consumer base, while at the same time working harder to retain the ones who wander in on their own. Target and Wal Mart, as examples, get badmouthed by the IBD for many reasons (some of them accurate), but we should really be thanking them for creating new consumer opportunities for the rest of us. They are helping those of us who work in/ with the IBD network. And, you can also spread that to online retail as well. Many consumers who do not prefer IBD shopping, still wander in with boxes of parts and questions. We need to embrace each of them because they represent potential and hope.

I don’t pretend to have all the answers. If I did, I’d be making lots more money. I am passionate about cycling, at all levels. I love this “industry” to my very bones. And I feel blessed to have been a part of it for so many years, and to have made the innumerable friends that I have. All of us are lucky.

We can do better. We can be better. We can be more creative. Selfishly, we have to … or “we” will be more irrelevant than we are already in danger of becoming. A less sexist, more diverse cycling world is good for us all.

Tim Jackson

Chief Kool-Aid Dispenser

Online versus traditional brick and mortar IBD… again/ still/ some more…

The cycling industry, like nearly every other industry known to man, struggles to come to terms with the growth of online retail and how to adapt to it/ with it. The cycling industry- especially at the retail level- has been fighting to survive the battle against online retailers ever since the earlier catalog mail order days. The vast majority of retail IBDs have been unable or unwilling to compete with the buying power and discount pricing of many online retailers. For several years nows, the manufacturers in the industry have also struggled to come to terms with the growth of online retail. Many brands have tried to cultivate twin distribution channels, attempting to remain strong in both IBD and online worlds. For some brands and product categories, it has worked with relatively few issues. The main category, but certainly not the only one, to receive the greatest amount if scrutiny and angst has been bikes- complete or framesets.

There are many arguments why a brand would want to partner with online retailers, the biggest and most obvious being the sheer number of consumers doing their research about brands/ products online, and then hunting for that ever popular and hated “buy now” button. For traditional IBDs, there are plenty of reasons to fear online retailers- many online retailers offer prices that can be cheaper than what an IBD can buy a similar product for, thanks to their massive buying power and lower overhead. Online retailers, often referred to as  evildoers attempting to undermine the health of the industry and put shops out of business, are far from The Evil Empire®. Is it fair to paint all online retailers as being ruthless bloodsuckers for simply being often more efficient and existing in the space where so many consumers spend vast amounts of time?

For brands, especially for smaller bike brands fighting for dollars in an increasingly competitive market with dominant incumbents increasing their control over retailers in the traditional IBD world, choosing to ignore online distribution- either through consumer-direct sales or with an online retailer- could spell death. With retailers often seeking to streamline their businesses, to keep things easier in a tough market or because of pressure from their major brands, smaller/ newer brands are left with very few options if they want to survive. Ignoring online distribution means saying “no” to consumers interested in their products. In my previous role as Brand Manager at Masi Bicycles, I had to frequently tell a consumer that I couldn’t directly sell them a bike, and that there were no online retailers who could sell them a bike… I had to say “no” to a sale. And I did it a lot. Masi had very large geographic areas without any retailers, and consumers in those areas who wanted to buy bikes… but we had to say no to selling direct and there were no retailers who could help them out. And things haven’t changed much in the industry in the few years since I was at Masi. It’s not entirely about small/ new brands either, because there are plenty of consumers who can’t get easy access to established brands too- or they simply choose not to deal with the local IBDs available to them. What are brands to do? Continue to say “no” and allow the brands who say “yes” to steal their sales?

For the IBD, there are numerous issues at play. If they attempt to compete on price, they may end up selling products- just to capture the sale- for less than they paid for the product, or at such a small profit that it becomes hardly worth stocking the product. Many retailers have had the experience of being “shopped” by consumers who use the retailer and their expertise to determine the proper product/ size/ fit that they need, only to have the consumer go home and buy online (or even within the store on their smart phones). Sometimes, it isn’t enough to explain the added value of personal service, good relationships, and proper product knowledge that the consumer misses by shopping online. Many consumers are addicted to the thrill of getting the ultimate “deal”, even if the shipping and/ or labor to install/ set up the new widget brings the IBD and online source to pricing parity. There is an increasing number of consumers who just flat-out prefer to shop online, for everything they purchase. This coming Christmas season is expected to be another record-breaking year for online sales. In fact, just this past week, UPS shares went up significantly in value based on reports by the company of the anticipated increase in business due to online sales. Even if an IBD is able to entice consumers into their shop, there is always the chance that they will not have the item in stock and need to order it themselves, increasing the desire of the consumer to go home and order it… and possibly get free freight, unlike the IBD!

Online retailers, have struggled for years to develop a better buying experience than walking into the local trusted retailer. Sometimes it’s easy, and other times it’s not. Online retailers without knowledgable staff, or with high turnaround, can struggle to survive as well. It takes a lot of volume of low margin closeouts to keep the lights on and the computer server humming. Having the right mix of product and inventory is an equal challenge for online as well. There has to be a balance of closeout inventory pulling in the low-price consumer, as well as new and currently hot products (at full margin) to keep “the geeks” coming back. Logistics is its own nightmare too, especially for larger companies doing their own private label products.

With brands, the answer will likely settle into a hybrid model of traditional IBD retailers and some sort of online presence. Either consumer-direct sales or some version of a “buy now/ buy local” option on brand websites, even if it directs the consumer to a nearby retailer- similar to Shopatron. For the retailer, the answer is likely going to require developing both an online presence, and learning how to offer a buying experience that trumps the convenience of buying online and potentially saving tons of money. And online retailers are increasingly attempting to develop IBD footprints, as well as learning how to increase profitability without just selling an increased volume of closeout products at low margins.

Overall, the answer is going to be uncomfortable at times, and is going to require a lot of dialog between all parties. There are many more pieces to the puzzle, and nobody seems to have the lid to the box so we can all look at the picture and figure it out. Consumers are online. A lot. They’re comfortable buying everything from watches to clothing to food to cars… and bikes. Brands need to reach more consumers- the industry has not had enough growth beyond its regular customers in over 10 years. Retailers have to make money and reach consumers- whether online or off the sidewalk. With the market’s hyper-competitive environment, the answer is likely going to get muddier before it gets much clearer.

 

Tim Jackson

Chief Kool-Aid Dispenser