The Evolution Of Bicycle Retail

On Wednesday of this past week Trek Bicycles announced to their dealer network that the company was going to begin a direct to consumer sales model. The news was first reported by "Bicycle Retailer and Industry News" via an insider tip from several Trek dealers who shared part of a video conference showing the announcement. 

The news, in and of itself, is not all that surprising. Once Canyon Bikes entered into the US market with their direct to consumer model (D2C), it was only a matter of time before all brands would have to offer some avenue to sell their merchandise through an online model. My take isn't so much that Trek finally capitulated to this, but it is more about a statement Trek President John Burke made in the video conference call, and how this might be a portent to what bicycle retail looks like going forward. 

First, the statement: (Quoted from the "Bicycle Retailer and Industry News article linked above)  "There's a certain segment of the population who buys online," Burke told retailers. "They do not go to stores. They buy online."

On one hand, this is an obvious statement. But who is this "customer" in Burke's estimation? Is he referring to the vast amount of people that would have never visited a retail bike shop, or is it that there is a certain amount of "bike shop" type riders that have now chosen NOT to visit a bicycle shop? If it is the latter, why has that happened? I believe it is the latter that Burke is referring to here.

Bike shops used to be where you went to see "the cool stuff".

I think the answer to the last question is tied to the evolution for the reason a bike shop exits. That reason has evolved, it continues to evolve, and soon "bike shop" won't mean anything that it once meant. 

I don't think the "bike shop" will go away, but what that means and what that looks like will be radically different soon. 

First, let's think about what a "bike shop" used to be defined as and what that meant to the community. 

First of all, a bicycle shop served as the obvious place to purchase a bicycle and to have it serviced. But beyond this, the bicycle shop had a few more meaningful characteristics that made bicycle shops essential to riders. These things were varied, but necessary. In my opinion, these can be boiled down to four pillars. Service, Retail, and two other pillars. One of those was that the bicycle shop was THE place to go see "what was new and cool". 

I can recall that the majority of customers back in the 1990's that were into cycling would come into the shop where I worked and ask, "What's new?", or "What's the coolest thing you have on the floor now?" This was an indication that in those times people went to bicycle shops to lay eyes on the things they had read about or had seen pictures of in bicycle magazines. It was the only way information on cycling was available. Things were written about in the mags, people got excited about these "new things", and then expected to see those things in bicycle shops. There was a reason beyond purchasing bicycles to visit a bicycle shop. 

Well, those days are long gone, and you can thank the internet for that. Good or bad, the internet swept up that reason bike shops existed. Now you can simply swipe your smart phone to see the latest and greatest in a never ending stream of information. Actually seeing the product seems to have lost its appeal to some degree. Virtual observation seems to be good enough for most folks.

Bike shops used to be the hub for social activities like group rides.

Bicycle shops also served as a meeting place, a hang-out, or the hub for events and group rides. This pillar that shops had is still hanging on in some places, but it has largely been supplanted by connections made by social media. 

Now a group ride can start from anywhere, and reliance on the bike shop as a meeting place has been lost. Furthermore, the bike shop's place for off-season hangs has also been lost to spin classes or "indoor cycling" where cyclists can hop on a trainer/indoor cycling machine at their leisure and virtually cycle with a group at any time they want to. 

So, the bicycle shop has lost two main functions that it used to posses to serve riders. Those being the representative of the bicycle industry and the agency of bicycle activity locally. Neither function exists at a meaningful level anymore for a bicycle shop. All were reasons for people to darken a bicycle shop's front (or back!) door. Now?

The only two reasons a bicycle shop "needs" to exist is for retail sales and service. The first reason is being usurped by consumer's practices of buying online and they want to do this with bicycle accessories and bicycles more and more. The retail part of a bicycle shop's reason for being is constantly being eroded as a result. It is my belief that this explains Mr. Burke's comment quoted above. 

That leaves service as the lone pillar of reasons to have a bicycle shop exist. At least in the sense that this part of the equation hasn't been significantly eroded as the others have been. Maintenance is also becoming more technical and specialized. Electric bicycles are making this even more of a critical point and the need for specialized knowledge in maintenance and repair of such two-wheeled devices is a need that is not going away anytime soon. 

Many bicycle shops are already in the midst of pivoting to a maintenance/repair first model with retail sales becoming less and less of a focus. As we move forward, I would expect this trend to intensify further. 

What Will The Future Of Bike Shops Look Like? -

This is the big question. I would speculate here and say that two models will emerge, and are emerging, going forward. The maintenance shop and "dealerships". 

The "dealership" model is already in full-swing. Trek being the biggest mover in that direction. Bike shops using this model will have certain models on the "showroom" with mostly "halo" models being shown as those are what people would come in to see. I mean, a $700.00 hybrid bike isn't going to attract the flies like a 16K road or MTB flagship model, or that 30mph eBike. Think car dealerships which have the top of the line models sitting inside for you to drool over while you buy your next car. 

These shops will order in and set up your bike, maybe even delivering it to you. (Exactly what Trek is proposing) and in the case that you are outside the delivery area, the bike would ship directly to you. Maintenance would only be done on models that shop sells, so people showing up with ten year old bikes from other companies would be enticed to trade (maybe inducing a dealership trade-in model?) and buy a new bike rather than repair it. 

These "dealerships won't be good "hangs" or places to go see the latest and greatest bicycle accessories and bikes, unless you are a fan of the "uni-brand" that store sells. This will be very corporate feeling in terms of customer experience.

The maintenance shop will be just that - a repair shop that does all models and makes of bicycle repairs, but has very little in terms of retail items for sale. This will mark an increase in labor costs and for parts. Since this model will be reliant on labor, the costs for labor won't be able to be suppressed by under-trained staff and high employee turnover rates, which has been the case in the past. This model will demand seasoned, knowledgeable people to be turning the wrenches, diagnosing electrical issues, and specializing in high-tech suspension and mechanical design. Those kinds of people are not cheap to hire, and so the result will be a more professional, higher priced shop. 

Finally, there will be no real dents made into the populace that doesn't ride a bike currently. We need to see disincentives to driving matched with better, safer cycling infrastructure before we see an increase in bicycle usage in stead of electric cars or ICE vehicles. Until those changes start to happen, the bicycle industry will be fighting for slices of a pie that will not increase in size anytime soon.