Will the IBD survive?

An intriguing aspect of the bicycle industry is the incredible staying power of the Local Bike Shop (LBS). Most retail sectors have been hit hard by the big box retailer. Amazingly, the vast majority of independent bicycle dealerships (IBD) today are single-location operations.

What if Specialized were to vertically integrate the retail distribution of its product line? With the launch of each new concept store, Specialized moves closer to becoming a mass merchant in the bike business. Think Dell, but not completely. Dell skipped the value added retailer and went straight to the consumer. In the bike business, this technique may not work because to service requirements, etc. But looking out of the bike industry might be the solution to the success of the Specialized concept store. Chartering new territory is not easy (don't reinvent the wheel).

Loss of Sales - Why you haven't hit the numbers?

Again, you folks at Specialized are the experts. But from my 8 years of experience servicing retail stores, I have identified these factors.

Economic Slow Down.
This is obviously the case right now in most industries. When consumer spending is down, how do you stay afloat, or even grow? You have to create value. A solid value proposition will pry the cash from a buyer's hand. Unfortunately value in a down economy is frequently closely related to price.

I think the bike business stands to benefit from this situation and here is why. Consumers have never been so "Green Conscious". Plus times are tight and cost of transportation is high. So you don't have to have the cheapest product, you have to convince the buyer that your brand will solve the cost of gas and environmental issues in the news.

Competition.
If your brand isn't growing, but your retail base is not showing a lack in sales, you may be loosing market share to a competitor. Put your ears to the ground and listen. If consumers and shop staff are a buzz about another brand its time to meet with the R&D department to drum up some new tricks! You may short term boost sales against a superior product by creating value with your brand. Lower the price or increase the product's specs for the same price.

Retailer's Performance.
Is your retailer doing his job. Go back to square one: is the store merchandising the product correctly?

A first class Specialized retail environment needs to be clean and well lit. Lots of windows are nice but not required. You need to identify your customer (see this post), and the corresponding market area.

In the case of Kinetic Cycles, the store may have been too Performance Buyer oriented in a Comfort Buyer market.

Retail Sales - Identify your customer

At the risk of sounding like a moron in front of a premier supplier in the bike business, I figure it would be important to cover the basics.

Bicycle consumers cover a broad spectrum of the population. However, I've tried to simplify this to help educate a retail shop's sales staff.

The Comfort Buyer.

Typically this customer is similar to the recreational user. When a Comfort Buyer is making a purchase decision it is based on their need to be comfortable on the bike. This can apply to gloves, a saddle, apparel, or a bicycle. This customer usually has a fairly minimal amount of brand awareness but can easily be upsold with tech talk. The Comfort Buyer is willing to part with cash if it will make them more comfortable.

The Value Buyer.
This guy likes to shop around and hunts for what he thinks is a great deal. Value buyers spend a long time in the pre-purchase phase researching different products and their price points. This guy isn't particularly brand or shop loyal; he is "buying to save". However, the value buyer will spend more for a product if the marketing has proven the product's effectiveness. The Value Buyer is willing to part with cash if it makes him feel like he got a bargain.

The Performance Buyer.
This customer is easy to identify. Most men will have shaved legs and most women will be fit. They are basing their purchase decision on what they think will be a competitive edge. The Performance Buyer is almost always highly informed and most likely to be brand loyal or brand aware. The marketing strategy here is to focus on technological advancement and hype. The Performance Buyer is willing to part with cash if it will make them faster.


All of these customers are willing to pay more and buy now if the company's marketing has properly sold them a brand image.

1980's - Growing up in spandex and thumb shifters

My first road race was on a 1979 Peugot with friction shifters and toe clips.  I was 9 years old.  Lucky for me the Red Zinger Mini Classic was based in my home town of Boulder, CO.  I've still got a giant box of medals, ribbons, and trophies from all those podium finishes.

Thankfully, my dad was cool enough to take us to Moab, UT year after year in the early days. Here is a picture of me on a sweet vintage Specialized Rockhopper (equipped with U-Brakes!).

All the early riding led to early Mt. Bike racing too.  I was featured on the cover of Mountain Bike Action in May 1992 while racing the Grundig NORBA Nationals at Park City, UT the year before. At the time I was on the Fat City Cycles "Grass Roots" team.

So, that early exposure has lead to a life of passion for two wheels.  Here is me in the high Sierra Nevada on a 2006 Specialized Stumpy.

And it will continue to the next generation.  This is my son Cooper riding his red Specialized Hot Rock with no training wheels at 3 years old!

2008 Season - Still racing and riding...

4th Place - Downieville Classic Sport X-Country
5th Place - Prairie City Race Series Expert
9th Place - Napa Valley Dirt Classic Sport
Top 10 - Golden State Criterium Cat 5
Top 10 - Folsom Criterium Cat 5
Top 10 - Folsom South Canal Time Trial Open