Thoughts On Boxes And Bikes

Trek filed a patent on this bike box design recently.

 "NOTE: Large doses of "my opinion" will be handed out in gloppy dollops today. You've been forewarned....." 

Friday I pointed out this article in which the author writes that he thinks there may be a coming "D2C" (Direct To Consumer) model for Trek Bikes in North America. Based upon the patent filing alone, one might be led to such conclusions. However; there may be more going on here than meets the eye. 

Many commenters on the "WhellBased.com" article mentioned that it might be odd for a D2C strategy from Trek when they have been purchasing retail outlets like crazy of late. And that seems to be at odds with this D2C thinking. 

However; there is another way to look at this. Yes, there is no doubt that Trek has bought into several retail chains and outlets over the past five years or so. They are not about to abandon retail, but that doesn't mean that they are going to continue into the future as a traditional bicycle retailer either. So, how does a consumer driven delivery system, as exemplified by the box patent, jive with a retail setting? 

Fulfillment of orders, that's how. Here is how I see this working. In the future Trek, (and probably Specialized, Cannondale, etc)  will have retail "showroom" centers where you can walk in and see samples of everything- and I mean every single bike - that they make. The thing is, they may only have a single example of, let's say a more niche bike, or their Project One line, or of a 'halo bike' they offer. But in the 'bread-and-butter' categories, you'd have one on the showroom and a full size run in the back.

Bikes with high-end spec, or that are specialty bikes, would be sized professionally and ordered. These bikes would likely be delivered at the showroom, but not necessarily. However; the more pedestrian level offerings would be sized and test ridden at the showroom with any sale made being a "D2C" delivery. (In store bikes would be samples only) The consumer would still have 'touch-and-feel' opportunity and service would be commensurate with the price of the bike. Basic offerings would be delivered to the consumer direct while high-end bikes would get the red carpet treatment with professional fitting and all of that. 

Showrooms would be stocked with all the Bontrager goodies and accessories from select brands. But as far as the basic line, most of those sales would be D2C and the customer may never see the showroom at all. Outside of areas with Trek Showrooms, the D2C model would work and service would be done by "Trek Approved" local bike shop service providers. (Who theoretically could be service providers for other brands as well) These shops would not be Trek dealers, but merely approved by Trek to do maintenance and warranty service where Trek Showroom outlets were not local to the consumer. 

Obviously, this is all conjecture, but with regard to this bike box and Trek's owning retail spaces, it would make sense. 

Now, I see all the big four brands and some second tier brands doing D2C in the next five years, or they will be pushed out of the marketplace. Retail spaces for bike shops will be owned by brands, and the independent shops won't necessarily be bike purveyors as much as they would be service centers and "Authorized Fulfillment Centers" for certain brands. Think of it like this- Some shops are already building and servicing certain e-bike brands, but are not necessarily dealers. It isn't 'just repair as usual', because it's deeper than that. I've already experienced this at Andy's Bike Shop.  

How This Will Affect Micro-Brand Bikes: There will always be those brands that are so small that they don't really trip the radar of the mid to big brands. However; with more pressure on all aspects of the retail supply chain, and with demand being what it is yet, we may see factories exert demands which may push several smaller 'micro-brands' out of the retail picture. I would describe a 'micro-brand' as one that has limited supply of bikes/frame sets, or that makes its living outside of the typical bicycle retail channels. 

I know of at least one instance of a brand being pushed to the brink of shutting down due to their factory upping the minimum order on each size, and I have to think that this is not a one time example. Many of these smaller companies cannot carry inventory in a warehouse, or a warehouse bigger than they already use, or they may not even have the monetary horsepower to pull the lever on a bigger minimum order. 

So, in these times, we may see a shrinking of 'fringe brands' and a narrowing of offerings from those that can survive. It will be a different landscape going forward for smaller companies, that's for sure.