Canyon Bicycles and Direct To Market Threat

[scott43]

Good article..

http://www.velonews.com/2017/10/from-the-mag/how-will-u-s-market-respond-to-canyons-arrival_450221

 

[graham418]

Direct to consumer does seem like the new age of marketing. For better or for worse, it is what it is. Canyon Bikes are pretty high end machines. I'm not sure what percentage of the market share those bikes take, but it may be that it might not affect local bike shop sales that much.
I know that the people on this forum are total gearheads who wouldn't think twice about dropping serious dough on a bike ( or x number of skis!) , but for the rest of the general population I'm not certain it would register.

 

[tch]

This seems to present a pretty close analogy to skis and ski shops. I have no idea how much money in shops is generated by ski sales, but I'm guessing it's not big and getting smaller by the year. In the coming age, products will be available through online purchasing for prices brick&mortars can't match. BUT....what may keep the shops going is service. No intelligent skier buys boots online. Similarly, bike shops will have to offer convenience purchases (bars/gels, gloves, lube, etc) and survive on providing service of some kind not available online: advice, fitting, repair, etc.

One important line in the story: "It’s hard to argue with the ease of clicking a button from the comfort of your home, especially when you know exactly what product you want." Some of us, know exactly what we want...but not everyone knows what kind of road or mt. bike they want, nor their size, nor the advantages/disadvantages of various build-ups.

 

[Bill Seddon]

I have a Canyon TT bike. High end, yes. Probably 6K plus US once my wheels cockpit and power meter are added. It's a damn god bike, and the one time I needed after sales the service was
excellent. If it suits you then go for itl Mine has been superb,

 

[Philpug]

All it takes is a few manufacturers to buck the system and the house starts falling.

 

[markojp]

Direct sales is one route, another is experiential/life style retail. Brick and mortar that don't add value beyond simple commodity are done for. What's of value? Helping create community. Tuning. Fitting. Guiding/instruction, both locally and travel. As a friend says, "you can't buy a haircut on the internet".

 

[scott43]

It's beauts for me..but not everyone has my expertise. I think there's still a market for the LBS. And I dispute the 60% margin on bikes..more like 40%..at least it used to be..and most people want a discount above that. So they may not be losing that much. Genie is out of the bottle..best find a way to work it. I will say, Toronto has 6 million people in the larger metro area..and there really aren't that many good shops. I don't know how shops make a go of it in smaller towns, I truly don't.

 

[markojp]

Depends on the local culture. Smaller bike shops around seattle seem pretty healthy.

 

[Tom K.]

It's beauts for me..but not everyone has my expertise. I think there's still a market for the LBS. And I dispute the 60% margin on bikes..more like 40%..at least it used to be..and most people want a discount above that. So they may not be losing that much. Genie is out of the bottle..best find a way to work it. I will say, Toronto has 6 million people in the larger metro area..and there really aren't that many good shops. I don't know how shops make a go of it in smaller towns, I truly don't.

Yep, there is no 60% margin selling bikes. Or 40% margin, except maybe on stupid-expensive boutique brand road bikes. But they still have a decent margin, and luckily, mtbs need a LOT of work on a semi-regular basis. My LBS does OK selling new bikes, and just flat out crushes it on service, possibly because our little town is a huge mtb draw for the Portland, OR metro area.

Dropper posts, internal cables, SRAM brakes, finicky 12-speed drivetrains, pressfit bottom brackets, SRAM brakes, blown up rear wheels, suspension servicing, SRAM brakes.....the list goes on. Given reasonable rent, servicing these will keep my LBS going for the foreseeable future.

And they learned awhile ago to cheerfully work on any brand, any time. It all spends the same!

 

[fatbob]

Direct sales is one route, another is experiential/life style retail. Brick and mortar that don't add value beyond simple commodity are done for. What's of value? Helping create community. Tuning. Fitting. Guiding/instruction, both locally and travel. As a friend says, "you can't buy a haircut on the internet".

All this. I'm sure this debate was had on Epic as well. B&M stores only have themselves to blame where they haven't established themselves as special. Too many undertrained staff on minimum wage mixed in with the attitude of the "I'm so core" type dudes ( it's usually dudes) who make inexperienced or price conscious customers feel uncomfortable in many specialist stores in the past. And investing in lots of stripped pine, airy layout and a coffee machine doesn't hack it alone. MTN's Epicstore is about the most soulless retail experience available.

 

[Tony S]

&M stores only have themselves to blame where they haven't established themselves as special. Too many undertrained staff on minimum wage mixed in with the attitude of the "I'm so core" type dudes

+1.

Your post made me realize that this is the thing I love about my favorite bike and shops. There is NONE of this.

 

[crgildart]

I've seen this move in other industries. With the vendor cutting retailers and brick and mortar shops out of the loop who's going to be working on the bikes when they need repairs.. especially warranty repairs? It's a pretty big hassle to box a bike up and ship it back to the vendor. I've seen harsh responses from the brick and mortar owners either charging ridiculously high prices to work on brand X or refusing to work on them altogether. Sure, where the market is strong enough someone can open a Brand X service center to pick up the demand, but if X is pretty exclusive that business might not do so well.

 

[Tom K.]

Too many undertrained staff on minimum wage mixed in with the attitude of the "I'm so core" type dudes ( it's usually dudes) who make inexperienced or price conscious customers feel uncomfortable in many specialist stores in the past.

Yep, Dude Speak from employees is best appreciated by "customers" that aren't very likely to spend any money.

The rest of us, not so much!

 

[scott43]

Depends on the local culture. Smaller bike shops around seattle seem pretty healthy.

Well it's my retirement plan..so we'll see in 20 years how it shakes out...I hope you're right!

 

[Frankly]

I’ve been out of the bike scene for twenty years but what I notice is that except for some single speeds, bikes have gotten more complex and finicky to work on.

If my business model was internet sales then I’d also want a bike design that was user serviceable so I could make revenue selling maintenance and parts to my customers. I’d also make things proprietary so a LBS couldn’t work on my bikes. And for those duffers that don’t want to work on their bikes I’d build a network of ambassadors who make house calls for $50-$100/hour.

I’m not advocating for this. Just saying it’s the way to make money. The Nordic Track method, easy monthly payments, marketing guilt and gluttony.

My local small town bike shop struggles but makes it on service and cheap rent, I guess. He sells mostly $400 bikes.