Perhaps, it’s just unfortunate timing. But last night I got an S.O.S. from a friend who’s local bike shop (LBS) 100 miles north of NYC is in danger of closing due to lack of business. It’s a brutal time to try to do anything in retail. For as much talk of green or local economies, the real business is in discount goods made via mass production in foreign countries.

Most people in this country grew up raised to believed that ‘a penny saved is a penny earned’ and habituated to equate saving a dollar with virtue. Finding the cheapest place to get something was like getting an “A” on an exam.

It was with a big sense of “bummer” that I saw a link to a story about Amazon.com getting involved in selling bikes. This is in addition to the furor over the price checking app. To my surprise it was the result not of some indie journalism on the part of Bicycle Retailer, (Pt. 1 & the more interesting 2) but largely a re-print of an open letter written by the President of Specialized Bicycles to dealers (LBS).

Dear Specialized Dealer,
Is your store a fitting station for your online competition?
 
Amazon.com recently launched a free app called Price Check that allows consumers to use brick-and-mortar shops for research, then easily buy many cycling products online right from their mobile device.
 
Here’s how it works: when in your shop, consumers simply scan a bar code, type in the product name or take a picture to see the product and prices from a variety of online retailers. After ensuring they have the right fit by trying on the product in your store, and talking to your staff, they can buy it from somebody else with the press of a button.
Participating brands include Pearl Izumi, Shimano, Louis Garneau, Giro, Bell, Fizik, Sidi and CatEye.
 
Who loses in this situation? Certainly not Amazon. And, at least in the short term, not the cycling brands selling through bike shops and Amazon. But what about you?
 
By buying product from brands that severely undercut you, you are supporting your competition. Why finance your own demise?
 
Please investigate for yourself by downloading the free Amazon app.
Amazon is clearly interested in the cycling space, and is hiring talent from the bike industry (including from Specialized).
 
In related news of brands that leverage the IBD while simultaneously undercutting them, Easton-Bell Sports dropped the fruitless suit it filed against Specialized before Interbike. Was this legal maneuvering just carried out for publicity?
Whether the current news is mobile device apps or lawsuits, the underlying issue remains the same: some suppliers support the IBD and some do not. For the sake of your business, examine your suppliers’ strategies and vote with your dollars. The entire bike industry is watching.
 
Click here to see how Amazon’s Price Check App works in store (Video here)
 
Thank you for your continued support.
Sincerely,
 
Mike Sinyard
President & Founder
Specialized Bicycle Components
 

 

 

To clarify, the app only searches for your item and then finds it on Amazon.com – not like a google search or any of the other price matching apps out there. But the pairing of getting into selling bikes and the app is rather like a dark heavy cloud for LBS just as sales to new riders (those most likely to freak when discovering a decent entry level bike is $500+). Then there’s all the accessories, as the video demonstrates with the helmet. Of course the bicycle community already has an Amazon, one that knows our basic needs, our predilections and weaknesses. It’s called Bike Nashbar.com  and their customer support is exactly 1o million times better than Amazon.

In doing some light internet research I was pained to come across this video of Andreas Weigland (former ‘chief scientist’ at Amazon.com), who while wearing very artsy and approachable white glasses extolls the key points he’s recently presented at ‘World Marketing Forum.’ He’s in front of some colorful art that looks like he’s sitting in a wonderful elementary art room. Such a safe, trustworthy yet creative setting!

  1. Help Customers Make Better Decisions
  2. Customers are Individuals
  3. Create Social Playgrounds
  4. The Mobile is a Two-Way Device
  5. Context is King

His points seem educational and completely positive. “People trust people who like them and people trust people who are like them.” (He nailed me on the video styling) But the empowerment and emphasis on the individual is completely lacking a social context. I tend to dislike most dentists and bike shop owners, but I really appreciate that when I need them, they’re there. And I don’t even want to think what would happen if they weren’t.

It is very likely (hopeful even) that the local bike shop as we know it needs to evolve – and fast. It needs to be a nicer and more inviting place that helps people who might never have ridden a bike before. It’s possible they will need to change up expected product offerings (since everyone will buy multi-tools online) and become cafe style service centers, boutiques and educational centers.

To get there we need a lot of people in the bike industry -like Specialized’s President- and everyday people to join in a national discussion on how to nurture and grow a bicycle economy that benefits everyone.

 

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4 Responses to War in the Bicycle Economy

  1. JohnS says:

    If a small business can’t sustain itself through changing market conditions, than maybe that business needs to change it’s business strategy or close shop.

  2. [...] On February 1, 2012 · Leave a Comment · In advocacy You might recall a recent post War in the Bicycle Economy from January, and it looks like the fall out has gained some momentum already. Momentum not in the [...]

    • phutry says:

      It was in Mt. Gilead, Ohio in 1955. My Dad took me into the Moore Store’ and there set the most beautiful bike in the world. A 24 inch Monarch boy’s bike in puprle metallic paint with a tank on it that had dual headlights and a horn built-in. I fell in love on the spot. It was $29.95 and I asked my Dad to buy it for me. He said if I wanted it I would have to work for it, he would put $5.00 down on it, and I would have to bring my allowance ($1,50) each week along with any other money I could earn doing lawns or errands. I worked my tail off and was there every Saturday morning to make my payment. The store owner would let me ride it around in the parking lot for a few minutes each week. I paid it off in 8 weeks. I remember walking the 3 miles to the store that last day so I could pay it off and ride it home. I was in Heaven, even though I had to ride it down the railroad track to get home. The bump-bump-bump across the ties was grueling but soon I was home and showing off my new bike to all my buddies and for awhile I was the talk of the neighborhood getting a new bike back then rather then a hand-me-down was pretty cool!

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