Specialized to go to Direct to Customer business model.

[GypsyTreker]

Interesting. Fender has gone this route as have others. They must feel their dealers are not providing the numbers or market share they need. Of course they, like other mfgs, couldn't ship. Crazy times for traditional business.

 

[mschwett]

that’s a very, VERY misleading post title. specialized is adding a direct to consumer option to go alongside their many other channels to get bikes to people.

Starting next week consumers who want to buy a Specialized bike will have many options:

1. They can walk into a brick-and-mortar Specialized dealer, including independent and company-owned stores.
2. They can find the bike they want on Specialized’s website and then use the site’s dealer locator to find a nearby dealer who has the bike in stock, and then contact that store about a purchase. Specialized told dealers that the dealer locator will be positioned prominently on the website.
3. They can buy directly from the Specialized website and have the bike delivered to a Tier 1 or Tier 2 Specialized dealer closest to them. The dealer will assemble the bike and the customer will come pick it up. The dealer would get 50% of the normal margin on the sale.
4. They can buy directly from the Specialized website and opt to have the bike delivered to their home in a mostly assembled state, similar to what consumer-direct brands like Canyon offer. Specialized will use facilities in Salt Lake City and Ohio to pre-assemble bikes for this delivery option, and then ship them in larger boxes to the consumer. The packaging will include tools and QR codes that direct consumers to assembly videos.
5. They can buy directly from the Specialized website and opt to have an assembled bike delivered to their door by a Specialized dealer. The dealers will provide “white glove” delivery and fitting, and the dealer will receive 75% of the standard margin for providing this service. This is the same margin now offered to dealers fulfilling click-and-collect purchases.

Specialized to add consumer-direct sales on Feb. 1

MORGAN HILL, Calif. (BRAIN) — Specialized Bicycle Components will begin direct online sales of bikes to U.S. consumers next week, adding a “Rider Direct” option for the purchase of non-electric bikes from its website.The company held Zoom calls with retailers on Thursday to go over the details...

www.bicycleretailer.com

 

[GypsyTreker]

They are offering the option. Not a mislead at all. Essentially they are in competition with their dealer network. Fender still sells to brick and mortar but also online. It begins the downwards spiral ask any Mom and Pop guitar outlet.

 

[mschwett]

They are offering the option. Not a mislead at all. Essentially they are in competition with their dealer network. Fender still sells to brick and mortar but also online. It begins the downwards spiral ask any Mom and Pop guitar outlet.

the title implies they’re going primarily or exclusively to that model, a la canyon, which is what a “direct to consumer business model” generally means. “go to” means to move from something or somewhere to another thing. if you wanted to correctly communicate what they’re doing rather, you’d say “specialized to ADD direct to consumer OPTION.” words matter.

what they’re doing (as you note) is offering that option in addition to several others. a better example would be apple - you can buy direct online, buy in an apple store, or buy at best buy/target/wherever. and because of the nature of bikes, in addition specialized has the click-to-collect and white-glove LBS assembly options.

 

[GypsyTreker]

the title implies they’re going primarily or exclusively to that model, a la canyon, which is what a “direct to consumer business model” generally means. “go to” means to move from something or somewhere to another thing. if you wanted to correctly communicate what they’re doing rather, you’d say “specialized to ADD direct to consumer OPTION.” words matter.

what they’re doing (as you note) is offering that option in addition to several others. a better example would be apple - you can buy direct online, buy in an apple store, or buy at best buy/target/wherever. and because of the nature of bikes, in addition specialized has the click-to-collect and white-glove LBS assembly options.

You say tomato..... I stand by the header. In my world whenever a manufacturer goes directly into the same market space as their contracted dealer network, they are competing. Im not advocating for dealers btw. I am an online buyer. Of course anyone who now signs a dealer agreement with companies with online options thats their decision to live with. My comment was strictly about the changing marketplace. Actually, since I believe we are heading in that direction, independent dealers, mom and pops, will be obsolete. Investment groups will contract with brands to demonstrate, service and repair product and the purchase will be made online. I can even visualize an opt out when you receive your purchase. In the case of a bike, you assemble, set up and ride it you waive warrenty and perhaps liability ( im not a lawyer so Im speculating) if you bring it to the service center , for a set up and assembly fee , they will hand it back and perform all future warranty repair. The sad thing is in the long run this my actually better serve the end user. Recently a friend of mine went to two locations to BUY an eBike. Both had inventory. One told him, after he got there, he needed an appointment, the other dealer had a kid who knew nothing about eBikes, Treks or Giants. Anyway.....the beat goes on.

 

[BEC111]

Interesting. Fender has gone this route as have others. They must feel their dealers are not providing the numbers or market share they need. Of course they, like other mfgs, couldn't ship. Crazy times for traditional business.

When I first saw this story I was in the midst of researching Specialized LBS near me now that Northern Virginia’s Spokes, Etc (where I got my Vado SL) had been sold to Trek. The other dealer near me that I could access from the W&OD (my local rail trail) was also becoming a Trek dealership. That left a dealer about 20 miles away that was not easily accessible from the trail and with whom I had not had the best experiences so far and REI which is also a bit of a challenge to reach by bicycle. So my initial reaction was that buying direct might be a good alternative.

I’m not about to buy a new bike in the near term, so my actual main concern is repairs and other services. Since I don’t ride much during the winter, figuring it out isn’t urgent.

My next thought was that Specialized should consider purchasing one of the other regional LBS chains. Without doing so, they might be closed out of the highly populated and affluent Northern Virginia market. I don’t think a direct to consumer model would address the deficiency of dealers in this area.

This is going to be a time of change in the bike business. It will be very interesting.

 

[mschwett]

…

My next thought was that Specialized should consider purchasing one of the other regional LBS chains. Without doing so, they might be closed out of the highly populated and affluent Northern Virginia market. I don’t think a direct to consumer model would address the deficiency of dealers in this area.

This is going to be a time of change in the bike business. It will be very interesting.

they’ve definitely been trying! they bought my LBS after a failed attempt to buy a regional chain.

 

[PedalUma]

This is a very interesting development. I worked for the online sales department of the largest seller of Specialized. We could have sold nationwide as with other brands but were hamstrung because of Specialized rules. Each bike had to be either purchased in a brick and mortar or picked up in one. They were so controlling that they have lost market share. They also canceled the pre-paid orders of 200 Mike's Bikes customers in Northern California, turning loyalists into enemies right in their own neighborhood. Dealers will be a place to test ride for free. Then customers will order in their underwear at ten at night from Specialized.

 

[PedalUma]

This is what happens when VC Hedge Fund types start calling the shots. The term is Filial Infanticide - the eating of one's own babies. The site is up and running. They will deliver directly anywhere a fully assembled bike with no restrictions weather you live on an island in the middle of lake Michigan, or live in an apartment above a dealer.

 

[GypsyTreker]

This is what happens when VC Hedge Fund types start calling the shots. The term is Filial Infanticide - the eating of one's own babies. The site is up and running. They will deliver directly anywhere a fully assembled bike with no restrictions weather you live on an island in the middle of lake Michigan, or live in an apartment above a dealer.

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Thank you.