The big T is launching a consumer retail website called ‘Trek Connect‘ in September that will allow customers to pick and pay for a bike online and have it delivered to them via their local Trek dealer.
The new US only website launches in September but we’ve been told the plan is that the US launch phase will allow Trek time to iron out the unique issues the system will face in each individual worldwide territory. So, a UK launch is planned but Trek couldn’t tell us exactly when that would be.
The move apparently comes in response to what Trek see as an ever changing retail market that is moving increasingly online but one that Trek feels still requires the vital service and customer experience input from their network of dealers. So how does this affect dealers themselves?
The customer may browse and purchase their bike online, with the help of live chat specialists, but their bike will not be delivered directly to their home. Instead the customer will be required at checkout to pick a local Trek dealer who will act as their service agent. What this means is that Trek will deliver the customers bike to the nominated dealer who will unpack and prepare the bike for the customer. The dealer will then make contact with the customer to arrange either a delivery to their home or collection from the store. Warranty issues will be dealt with by the dealer. The hope is that the dealer will have created a new customer contact and possible future service work. Trek will then pay the dealer around 80% of the margin they would have received if they had sold the bike directly to the customer from their own stock, which considering they don’t need to stock the bike seems like a system that many space lacking dealers may appreciate.
The system is also being rolled out to include Bontrager components and accessories, only the consumer will have the option of direct delivery to their home address from the Trek distribution centre. The local nominated dealer still receives the sales margin, even if they don’t see the delivered product.
Trek claim the whole system is designed to respond to the increasing desire for online shopping of everything including bikes but also to protect the dealers and make sure they still have the option of being involved in that customer relationship. Trek’s hope is that dealers will gain new customers rather than lose existing ones to online shoppers.
Trek UK’s Chris Garrison told us, “It’s perhaps the biggest thing we’ve done and has the potential to affect every dealer in the world. This is a program that will affect every product they sell in their store.”, which echoed company president John Burke’s announcement on Monday that this move was, “…the largest investment we have ever made“.
The move is designed to allow Trek dealers to grow the service side of their businesses while the retail sales continue to migrate online. At the same time Trek is attempting to support their dealers by building in the margins the dealers would otherwise lose out on. As Burke explained, “I’ve seen stores that sold a lot of products go out of business. I’ve never seen a store that did a lot of service go out of business.” All of which indicates clearly how Trek expects the global rise in online purchasing to force many retailers into becoming primarily service centres instead of stock showrooms, a business model that is already growing in popularity among many UK based bike retailers as they ditch showroom space for more workshop space.
The idea for the system was spawned after Trek consulted with Trademark Analyst Scott Gallaway who is Clinical Professor at the NYU Stern School of Business where he teaches brand strategy and digital marketing.
Trek president John Burke also announced that they would be helping to enable all their dealers to sell more bikes to women, which he claimed would represent half of all bike shop sales within five years.
There are many questions that have already been asked by US dealers responding to the story on the US Industry website Bicycle Retailer (BRAIN), such as what happens if the consumer doesn’t like the bike or it’s the wrong size? Trek UK’s Chris Garrison told us that the onus will remain on Trek to carry the can in such cases rather than the dealer carrying the financial risks, but she admits that the reason for the slow roll out of the system is to enable them to respond to the unique issues that will inevitably come to light as consumers get to grips with the new system. “By the time it gets to the UK it should be pretty seamless.“, claimed Garrison.
Responses from US dealers has been mixed, which is generally a sign that it’s going down pretty well among dealers at least.
“..online shopping will lead to an increase in sales, and bring more customers into the store. This is only a good thing.”, Said one Pittsburgh dealer, whereas one dealer questioned how shop sales staff on commission would fare when bikes are ordered online.
Are you a Trek dealer? How will this affect your business? Get in touch with us at newsdesk@singletrackworld.com or post your comments below.
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So, exactly how will this help us the consumer? Price reduction? What am i not seeing?
This is generally a good thing.Most of us buy online to the detriment of local shops because it is easier,this is enableing local shops to sell online at no cost to themselves.This isn’t being done to help the consumer so much as to protect the bike shops.
I’m in a different retail trade with the same online problems as small bike shops and I wish the manufacturers that I deal with would do something like this.