How did you buy your last bike? Did it catch your eye on the racks of different brands in your local bike shop? Or did you type in a manufacturer’s web address, hit the buy button, and have it delivered to your door a few weeks later?
The landscape of bicycle retail is shifting, and there are now an increasing number of companies that only sell direct to the buyers. Some of the most respected brands in the business – Intense being the most recent example – have moved to selling direct. Meanwhile a host of smaller direct-only brands have popped up to give the old guard a run for their money. And money is a big reason for this change. Without having to pay a distributor to actually get the bikes into a shop, direct to consumer brands are often noticeably cheaper, part for part, than the bikes you can buy from a traditional retailer.
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Rewind a few years to when many of the Singletrack team started riding, and the picture was very different. There were some companies which sold via mail order (probably with an “allow up to 28 days for delivery” clause), but the vast majority of new bike sales were conducted inside a high street retail premises. Now things have changed dramatically, and there are so many direct-to-consumer brands out there that we’re even able to run group tests of them.
For the traditional bricks and mortar bike shops, the future looks like interesting times. Bikebiz reports that independent bike shops are closing at the fastest rate since the 1960s, and an article on the same site by an anonymous bike shop owner, urging a boycott of internet-purchased bikes, was widely shared. While rants like this might contain a whiff of sour grapes, they also raise some real concerns. Who’s going to fix and service all these great value online purchases? And are we going to end up deciding what bike to buy armed with nothing more than a spec list, geometry and travel measurements, and a sick edit?
We spoke to a range of folk from across the mountain bike industry to get their thoughts on how the industry is changing, and whether the future of bike sales will be direct to consumer. These included direct sales brands Canyon, Intense, Cotic, Airdrop and Bird. Meanwhile some of the biggest names in MTB, including Specialized and Trek, are still selling through dealers, but recently reintroduced direct sales. We also asked some local bike shop managers for their views on how the industry is changing, and what the wider implications would be for the mountain bike world.
We started by asking brands about why they decided to sell direct, and whether value was the main factor for doing this.
As you might expect, Canyon’s UK marketing manager Hollie Weatherstone is keen to play up the value for money of their offerings.
“Consumers are generally becoming more confident and comfortable with buying bigger price-point items online and it’s often much more convenient for them to do so. Selling direct for us means better value for the customer; if you compare our bikes spec-for-spec against the majority of our competitors, you’ll find that our models are generally around 20-40% lower in price.”
For Intense, the decision to go direct was made by their global HQ in America, but it wasn’t an easy one. As Martin Astley from UK distributor Saddleback explains:
“With the direction of the industry and a growing trend for riders to buy direct, the future of the brand was unclear if some changes weren’t made. We were selling bikes that cost almost £9,000 and we weren’t making a penny. We were investing in the future of some great up and coming riders, sponsoring events and running demos, which gave us a warm heart but doesn’t help pay the rent.”
“Nobody was comfortable with charging £9,000 for a bike. Finding a way to change that was not only becoming a desire but a necessity, but with the existing sales model it just wasn’t possible.”
Cy Turner from Cotic says control over pricing, rather than competitive pricing, was a key factor:
“Going direct hasn’t massively affected our pricing because we have always been a small, low overhead business. As we have become larger and our model turnover has increased, we have needed scope to be able to reduce pricing at certain points to make space for new models or over-stocked items. We were struggling to offer the same discounts via our dealers when we needed to move stock without making a loss on dealer sales.”
Hollie at Canyon also points out that direct sales can offer more freedom to bike brands:
“We don’t have to consider the retail viability of each product and we can produce items that may only be sold in small quantities. It gives flexibility and the opportunity to develop innovative products which then benefits the consumers”
Try before you buy
Being able to try a bike before you buy it has always been a great reason to buy from a local bike shop, but direct sales brands are now offering demo programmes of their own. Ed Brazier from Sheffield’s Airdrop bikes sets out their liberal demo policy:
“Everyone that asks for a demo gets one. Until quite recently I would take people out for a ride myself but that’s getting harder to do now. So we invite people to come to the workshop, have a brew, set the bike up for them and let them take the bike out for the day. We don’t charge for that. We have some level of contact with another 50%, be that a custom build quote, advice on sizing or just a chat about what they need. Only about 10% of bikes get sold exclusively through the website and it’s always a bit of a surprise when someone just buys a bike online.”
Cotic are another brand who are happy to go the extra mile to get their bikes under riders, and have a dedicated member of staff who travels round the UK with a van full of bikes. As far as owner Cy is concerned, this is more than justified:
“Demo has been hugely important to us and our current growth. Full suspension bikes are much more complex from a ride character point of view, so most customers want to have a ride first, and most seem to be bought as complete bikes. So you’ve got a customer ‘risking’ £450 on a BFe frame buying off the website vs a FlareMAX customer who might be spending £4000 on their bike. The FlareMAX customer is going to want to be a lot more sure about that purchase, aren’t they?”
Probably the biggest player in the direct sales market, Canyon, take a more laid-back approach. In Hollie’s words: “We don’t know what percentage of customers are borrowing Canyon bikes through their friends to test out, but we do know this often happens as customers will mention it to us. We definitely draw a large audience through our Canyon demo sessions but we feel that the majority of our customers are confident enough to buy online before trying. They’ve read the tests and reviews and are also aware of our flexible 30-day return policy.”
As Ben Pinnick from Bird points out, customers are increasingly capable of making their minds up about what sort of bike they want: “I think that the market is certainly smarter now than it used to be. Press focus on geometry over the last few years has opened the eyes of the wider public to the fact that a bike isn’t just the sum of its parts.”
If you’re not happy to maintain and set up your own bike then buying direct might be less appealing. Direct sales brands are keen to stress that they’re trying to address this. “Canyon have customer service and technical support teams in each of our major market” says Hollie. “In the UK we have a team of 19 staff available via Live Chat on our website, via email and over the phone. We are equipped to deal with any kind of bike-related question, no matter how complex or basic it is. We also have a team of Canyon mechanics based just outside London who are available to service and repair our customers’ bikes.”
Bye bye bike shop?
Where does this leave traditional bike shops? When we asked if they’re dying out, no-one we spoke to answered in the affirmative, but they do see some changes on the horizon. Of the big brands, Trek have moved towards direct sales, but using a model that still involves local bike shops.
“You may not know this, but Trek was a mail order brand back in the late 80s and early 90s.” says their UK marketing manager Jez Loftus. “After a while we realised that bikes weren’t being assembled properly, it became a safety issue and the company decided to stop shipping to customers homes – it was the only way of making sure the bikes were safe. This morphed into a system that’s basically click and collect from a local bike shop. The shop gets their margin, minus an admin fee, and the chance to gain a customer when they walk through the door.”
When shops that previously sold through shops go direct, it’s not hard to imagine that some bad feelings resulting. Martin from Intense is keen to stress that they thought about the effect of going direct on their dealer network:
“Here in the UK we had built up a network of around 30 Intense ‘dealers’ but the reality was that there were a handful of shops that were truly behind us, carrying stock on the shop floor and helping build the brand. Many of these shops had been with Intense for a long time and have been a big part of its history in the UK and both Intense and Saddleback have a lot to thank them for.”
“One of the key points that made us feel comfortable to progress was that we reviewed our dealer network in the UK and it was clear that there wasn’t a single name on the list that would be suffer significantly by losing the turnover from selling Intense bikes. For each and every dealer Intense was a supplementary brand, selling a small number of bikes a year with the real volume coming from bigger more mainstream brands.”
Some of the companies we spoke to were also keen to point out that bigger bike shops are playing the direct sales brands at their own game. As Ed from Airdrop points out:
“It’s not just bike brands that are ‘going direct’. It seems like everyone in the industry is doing the same thing to some extent. With pressure on margins, everyone is trying to cut out everyone else. Mainstream bike brands are going direct or opening their own concept stores. Multiple retailers have their in-house brands, as do distributors. We’ve seen factories set up their own brands and yes, even bike shops are at it.”
In Singletrack’s local shop Blazing Saddles, owner John Ainscough is cautiously optimistic about the future:
“I think there will always be people who will prefer to buy from a ‘face’ and who see value in that. Cyclists are a beacon of hope. They enjoy the functionality of the bike and want to make them last, and so do we.”
As you might expect, when it comes to the beginner end of mountain biking, direct sales brands are generally keen to leave this to local bike shops. Cy from Cotic’s reponse was fairly typical of the direct sales brands we spoke to:
“I see bike shops playing a big role in helping people get into the sport. People who buy online tend to be a little more into the sport and know a bit more firmly what they want from a bike. If you’re new to the sport, being able to try bikes out and get some advice on things like a helmet and some gloves, shorts, shoes, that kind of thing, that’s going to help grow the sport.”
Not everyone feels so cheery. One manager of a mid- to high-end bike shop we talked to (who asked not to be named) was clear that some bike and component brands aren’t doing local shops any favours:
“Many have direct channels to the consumer with eBay stores and their own websites often selling at less than my cost. Apparel sales have pretty much gone this way. Price protection has never materialised in the way that, say, Apple manage it. It has compounded the problems that independent shops face, and really reinforced the mistrust that consumers have for shops.”
The bike shop owners we spoke to were also politely sceptical of claims that warranty work or e-bikes will come to their rescue. As John from Blazing Saddles puts it:
“Warranty work is an interesting part of our day to day. It’s also work that we don’t shout about or even get paid for! E-bikes are an interesting and exciting development in the bike trade. Obviously, they present a new opportunity for sales. However, because they are a relatively new technology they also represent a massive learning curve and a huge financial outlay. From the moment, they come into the shop in their bigger and heavier boxes, requiring building on motorised stands to save mechanics backs, the job of working with e-bikes is different to anything we have had to contend with before and I’m not hearing anyone owning this fact. We have to invest heavily and promote ourselves, to ensure that people come to our shop to experience the bike for themselves.”
The shop of things to come
What’s going to happen to the local bike shop as direct and internet sales take over? Most of the people we spoke to see a future that’s increasingly specialist, or catering to particular markets. In the words of Roman Arnold, founder of Canyon:
“20 years ago there were 20 or 30 book stores here in Koblenz. Now there are two. Those two are doing things differently. They bring authors in, they do what they can to foster the book society here.”
Our unnamed local bike shop owner agrees with this boutique-based vision of the future:
“I see us fitting in either like a restaurant where people want a very particular service (this is how my shop has evolved anyway – now selling build ups and customs more than off the peg branded bikes) or as a repairer / bike fitting studio. I do see an entire generation missing from my customer base. It used to worry me, I’ve learned to accept it now. Young people don’t use shops in the old fashioned way, and aren’t going to change their behaviour at this point. There is no ethical argument here, no divine right for bike shops to exist – times have changed. I service an older clientele for sure. They have the money and the expectations and get well looked after.”
Jez from Trek is keen to emphasise that they want traditional bike shops to be around for as long as possible:
“Bike shops are still a primary part of the business. Our philosophy is to make a dealer successful, help them stay solvent and make money. We offer support with EPOS, accounts and websites, and shops can become partnership stores for more favourable terms. We’ve also bought shops and turned them into concept stores, which have generally been old established businesses that have fallen by the wayside. Part of it is trying to get them to pull back and simplify their lines.”
John from Blazing Saddles is keeping an open mind:
“Looking at the future, we could end as service centres fitting parts that people have bought online. For that we have no need for a shop on the street and might just as well work from an industrial unit to avoid high business rates. We might end up with more high-end hipster shops offering specialist coffees to drink while you peruse the crème de la crème of bikes! I don’t actually think that’s a business model with much longevity outside of cities, but of course I could be wrong. My dream for the future would be that we return to producing bikes in this country, reducing the carbon footprint, using British materials and skills.”
For consumers, it seems, the changing face of retail is potentially a blessing and a curse. There’s value, quality and choice too, with many new small brands joining the market. But there’s also the lingering question of what happens when bikes need maintenance, or beginners need advice, or supply chains hit the buffers. Some of our favourite bikes of the past few years have come from direct-to-consumer brands. But there’s also no denying that a good local shop can do things which are tricky over the internet, from freeing a stuck bolt the afternoon before a big ride, to marking up your map with all the best local trails. It might be that the bike shops of the future will either function as outlets for single big brands, or not sell bikes at all. But for now, the future is unwritten, and we’ve got some great bikes to ride.
Read our Direct To Consumer bike test in Singletrack Issue 118, out on 5th April 2018.
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