Specialized confirm direct sales option

Lower costs by excluding the LBS?

Lolz

Bought my first MTB at Mike Cookson’s. Specialized rockhopper comp.

Bought my most recent MTB from Canyon direct.

Well, that’s putting aside an insurance replacement that was delivered as well.

I do worry about the LBS in the direct to consumer (DTC) sales model if the mainstay brands take it up.

Yet the LBS is a great institution. Organising demo days (NWMTB have been great), offering a ‘curated’ range of goods, and of course having all the tools and skills that ordinary folks can’t amass.

Unsure how thing work now, but there’s surely a way to make DTC work that involves LBSs.

bike shops will still get trade prices?

At lower margin IIRC.

Seems like the shops that have multiple brands will be fine, as they can just get another brand in. The concept stores (that are franchises), perhaps not so much. I suppose their hope is they will become service/warranty centres.

Specialized is not like Canyon, Specialized have stores so if you are close enough to one I guess you can go and see stuff, return stuff/get help etc,?

More details;

Updated: Specialized announces direct to consumer channel

https://www.bicycleretailer.com/industry-news/2022/01/27/specialized-add-consumer-direct-sales-feb-1#.Yfp7KPjLeUm

Dealer will get 50% of their standard margin if the bike is delivered to the shop, 75% if the dealer delivers to the customer. A lot of dealer margins are pretty poor already from a retail shop point of view.

Specialized sets the rates they will pay (credit) for warranty work, regardless of the dealers workshop rates/costs. Dealers will have to accept all warranty work.

Other problem for LBS is the distributor withholding stock for direct sales, its happening with other brands just now, where a LBS cannot buy/sell and bike, but the customer can order it direct online.

Obviously is not great for shops, but its a capitalist economy, Specialized are doing what they think is in their interests, that may or may not be beneficial for dealers. Spec want to increase their market share, taking orders 24/7 is modern business when your competitors do it.Specialized will argue it is to generate additional sales on top of traditional LBS walk in customers. And they always say up sell accessories on collection, gain service customers, repair business etc etc.

Its adapt or die, just like all the other little shops, grocers, butchers, hardware shops etc etc.

One of my local bike shops, Dales, has been a Specialized dealer since the eighties but from other threads on this forum and a quick look at their website, it looks like they now no longer stock the brand. I wonder if the switch to direct to consumer sales has been the catalyst for this? That would be a great pity as they are an excellent bike shop with really knowledgeable staff who go out of their way to support customers in my experience. Genuinely interested to see how warranty is handled by another shop whom you didn’t buy the bike from.

Direct to consumer by the likes of Canyon works as the prices they charge are significantly below that which you pay for an equivalent bike from other manufacturers in a bricks and mortar shop.

Paying shop prices without the shop service may potentially have an adverse effect on the brand from an absolute number of sales point of view as the in-shop usp experience may be lessened but if the margin the brand generates is greater per unit and overall, I imagine that has prompted the move.

Given current cost of living increases, I would hypothesise that price is going to become a more important factor in the buying decision than previously and may potentially drive consumers to other brands. If there is a corresponding loss of dealers, this may also have a further detrimental impact.

I have no doubt all of these factors will have been carefully considered. Who knows if I am going to be proven to be correct but it would be really interesting to see the reaction of consumers and the numbers down the line.

We’ve already seen a massive shift in retail to online – how often do you visit your local high street or even out of town supermarket these days, compared to ordering online? You can even buy cars online now without ever needing to go near a showroom. I’d say this is a very logical step for manufacturers, but at least during a transitionary period they need to find the right balance and not kill the LBSs just yet. As for the LBSs and concept stores:

I suppose their hope is they will become service/warranty centres.

I think this is exactly what they need to become, along with providing other functions such as a showroom for the dwindling amount of people that actually want to see a bike in the flesh before buying it. Service centres can be many things, they don’t just have to be there to service bikes. They could do different levels of bike fitting for example to help folks purchase online, carry stock for demos. Business is changing and they need to adapt, twas ever thus, and fighting change to maintain a nostalgic status quo will just prolong the pain.

Material things are becoming more and more commoditised, you need to add more value than just distributing stuff.

You can buy Status 140 at Rutland

you need to add more value than just distributing stuff.

At the moment, just being able to distribute stuff is quite the draw.

I bought a Spesh Tarmac road bike 2 years ago.
It was via a B2W scheme, and got it from one of the Concept stores.

I’ll throw in the argument that counters the LBS (ok, Concept store that is a franchise but operated by Rutland Cycles in my case)…

– having to go to a store that was 30 miles away at a time that was convenient to them but not me (because I work in the daytime, like many people !) is a total PITA.
Then **** around sorting the bike ‘purchase’ for ages there as they don’t actually have it in anyway, the inventory / stock control isn’t bombproof, and having to get another franchise shop to take it off their ‘available’ list and transfer it to the 1st shop in a week or two time.

– had to have a tantrum on the phone when they couldn’t be arsed to get the £200 helmet in that I also wanted at the same time, despite all the time pished away on the 1st visit

– then have to do the same again 3 or 4 weeks later to go collect the bike, prat about with more paperwork etc for a 2nd time, again at another time convenient to them not me.

Once home I check all the bolts etc anyway (I’ve seen too many feckups on bikes from bike shop mechanics on other people’s bikes – Inc. loose brake calipers and loose stem face plates !! to trust them with my own neck), and adjusting the fit, invariably changing the saddle, and actually making sure anti seize is where it needs to be).

So a box with a bike in it for me to assemble myself, having ordered online with relatively little fuss, and arriving in a reasonably timely manner will be WAAAAY more convenient.