Specialized confirm direct sales option

Today sees Specialized offer people another way they can buy one of their bikes. Namely, consumer direct via Specialized Ship to Home option.

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By ben_haworth

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Specialized confirm direct sales option

And the benefit is? Lower costs by excluding the LBS? No LBS when you need them? Demo’s?

Lower costs by excluding the LBS?

Lolz

I’m debating a Status 140.

They look ace.

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.

Would assume the online prices will be the same as retail? bike shops will still get trade prices? If they want to remain on the shop floors, they cant be undercutting them all. Your LBS will tell them to GTF.

The benefit is experienced riders who know exactly what they want and how to build it up dont have to faff about going to a LBS. those who prefer to peruse spesh fleet in the flesh and talk to the experts can still do so?

No doubt it will still impact on their sales though, im sure they will find folk coming in to feel up their bikes, maybe even demo them – then go and buy online!

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.

Got to be say, i’d always support the LBS or not so local bike shop, there’s a reason a lot of brands don’t do direct sales, it upsets the network of shops, who don’t have the direct access to all the bikes and sizes, it’s a dangerous game to play for a manufacturer, and buyers in future if the network dwindles and warranty starts to become more of a distributor led activity.

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,?

Remember when direct sales companies introduced very high spec bikes that significantly undercut the big brands? I can’t see how Specialized can do that same without making LBS prices look sky high in comparison. I imagine the RRP won’t change, they’ll charge you for the convenience of home delivery and they’ll keep the profits.

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.

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,?

Well for now they do. But thats not going to last in the long run.

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.

I wonder if the switch to direct to consumer sales has been the catalyst for this?

Some brands have been tightening up on dealers, requiring X % of stock/shop floor to be a brand, requiring X % of accessories. Also if you sell brand A you cannot sell brand B. Requiring specific model buy in. I know some owners have decided its enough.

It would appear some brands want less dealers, but the dealers to be more corporate.

Kind of like new car dealers, most of the little/independent ones are gone. With E bikes I can see the model working in terms of customers, warranty, training etc.

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.

Does that mean people will finally be able to buy the Status? I like the look of the 140mm one, not 100% sold on the tiny chainstays but they look fun

You can buy Status 140 at Rutland

tonyd
Free Member
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.

Honestly, how many people are buying store sold bikes without visiting stores, maybe direct sales, but not many who are about to spend Spesh level money? High street visits are down, but 99% of the stuff you buy you don’t really need a feel for before buying, unlike a mid range or expensive bike.

As for LBS’s wanting to be service centres, at the rates spesh offer against their standard i doubt many would, especially with customers wanting it fixed yesterday with warranty stuff, and issues that specialized have with their bikes, like the ebike range.

Business has changed, the big boys are up against direct sales, niche brands, etc, so they need to compete, hitting your dealer network with competition from the actual brands they sell isn’t going to go down well, it’ll be easier to just move brands, most bikes sold are low to mid, with a few high end bits, so there’s never a shortage of other brands to sell.

you need to add more value than just distributing stuff.

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

As Sanny said earlier, this looks like a negative for some long established and very good shops, and their customer base. I have bought probably 6 plus Spesh bikes from Dales over the past 15 years, including 2 ebikes which are less than 2 years old and under warranty, which will no doubt need using again…..

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.