Trek going direct with new program

[53x12]

Can ship to house or to shop. Shop still gets a small cut. Starts this September.

http://www.bikerumor.com/2015/08/04/tre ... s-program/

[glam2deaf]

It's just accessories to your house, or did I read that wrong? Interesting move from Trek. Good for them, and still helping out local shops in the process.

[53x12]

Correct.

"Consumers will have the option to ship their online accessories purchases to their home address or to a retailer for pickup, a process referred to as “click and collect.” All bikes ordered through trekbikes.com will be shipped to the retailer of the consumer’s choosing for build and delivery or pickup. Trek retailers will receive a service commission regardless of the consumer’s chosen delivery method.

Trek Connect will launch in the United States in September. As a test market, the US will serve as a development program and enable the company to evaluate the potential for expansion to other markets globally."

[grover]

I've heard a lot of hate for the idea straight away. I think it's a great move with the setup how it's described.

Bikes still aren't sold from multiple online sources resulting in a discounting war. The brand retains their value.
But people can shop from home meaning Trek don't miss out on the booming online market.
AND the shop still makes their cut.
It will likely reduce the inventory a shop needs to carry too which is good for the shop's bottom line...as long as they don't lose sales through not having stock/test models.

I think the ideal scenario for the LBS is to carry stock of the impulse buy market (commuters/less than say 1000). Then the rest of their stock is all demo bikes. Just enough to cover the platforms/sizes so people can actually take the bike and ride it properly. Then order in the spec you want.

I think overall it will build sales for Trek, and likely also for the LBS. The LBS still gets contact with the customer and has the opportunity to build a relationship for repeat sales.

[fromtrektocolnago]

Sounds like Trek thinks the retail model is broken and wants to move more in the direction of a Canyon or Bikes Direct model. Trek may be right, however I think the local bike shops won't like it and diversify away from Trek in favor of other brands. Since the point of sale starts with Trek, customers won't be getting the fitting advice of a local bike shop before purchasing which can be a problem for the typical buyer who my not fully understand the fit process. As someone who bought a poorly fitting bike years ago, I don't think consumers appreciate this point sufficiently. I have noticed however that with the most expensive Trek models the stores weren't stocking them anyway, at least in my area, and they had to be special ordered(only so many people are going to buy a $10,000 Madone in a given size at any time) as financing inventory is expensive not to mention the local retailer is in the moving, not storage business.

[mattr]

They seem to have missed the point somewhat.

Direct sales doesn't involve traipsing all the way to my nearest trek dealer to collect a bike that i'll have paid full retail for. To then have to bring it home and spend half a day going over the entire bike with a fine tooth comb to find out what the dealer (who are utterly useless, and always have been) have made a mess of.

Direct sales means a nice courier turns up at the door with a box, then i put the bike together properly (which is generally quicker than correcting a badly put together bike.) And anything i don't have tools for or experience of (nothing) i go to a shop of my choosing to get done.

I'll still not be buying a trek then. Even tho the new MTBs look very very nice.

[Powerful Pete]

@mattr, without getting into the details of what is being proposed, I think you (and most on WW, for that matter) are not the focus market here - the people who buy cheap to ~2K bikes and are not knowledgeable about fit, components, etc are... People who are now used to shopping online and then having the reassurance of knowing who can fix their bikes are more likely who will be enticed by this model, I would think.

I wonder if the cut for the LBS is well though out, it might be workable. I suppose it would help cut down inventory - although that just means it sits on Trek's books as opposed to the LBS?

[mattr]

Not really, I'm in the market for two mid range (one road, one mtb) in the next 18-24 months. Both will be complete, off the shelf bikes.

And people who are not knowledgeable about fit and components etc are exactly those who *shouldn't* be using a service like this. Or we'll see loads of really badly sized treks floating around......

[53x12]

I wonder if the cut for the LBS is well though out, it might be workable. I suppose it would help cut down inventory - although that just means it sits on Trek's books as opposed to the LBS?

I would think the LBS cut would be reflected in that (less than now) as Trek would be taking more of a risk with inventory. Since LBS only has to receive bike and build it, their cut should be less. If size is wrong, customer would have to deal with trek.com I assume since that was the point of sale and not the shop who did so.

Too bad none of these cost savings are passed to the customer. Price just keeps going up and now the shop just has to deal with building a bike for a customer who put the order in and yet still get their 30-40% cut.

[fromtrektocolnago]

The danger in this model for the local bike store is they are not making the sale. In anything sales related the key is to maintaining the customer relationship and having the rolodex card. Because the bike store isn't actually making the sale but reduced to being a delivery contact they will resist the change in my opinion. The stores were always able to contact Trek order a frame and have it delivered to the store. The key is that the customer is now dealing with Trek and not the bike shop. The bike shop is merely assembling and delivering and wondering if the customer will be as likely to continue a relationship with them.

[Powerful Pete]

And people who are not knowledgeable about fit and components etc are exactly those who *shouldn't* be using a service like this. Or we'll see loads of really badly sized treks floating around......

Fair enough.

Having said this, I see plenty of enthusiastic/relative newbies on ~2K rides that are not sized correctly by the LBS.

@fromtrektocolnago, I wonder though - not being in the business I am going on hearsay, but I understand that the bottom line for a lot of shops are basic maintenance, tubes and accessories - wouldn't having established a relationship with the customer (building and handing over their new ride) mean that I, as LBS, have the opening to sell them all the doodads?

Again, all curiosity and speculation on my part...

[MisterNoChain]

I would think the LBS cut would be reflected in that (less than now) as Trek would be taking more of a risk with inventory.

By selling bikes themselves Trek can give discount on bikes that they have on stock in high numbers. If the LBS still has this bike on stock (bought at the regular price) Trek sells their stock and the LBS is stays behind with an old model.
Or if they still have a lot of stock the new model just isnt ready yet , it's always the brand that has the power, and by with this program Trek is just increasing it. That a LBS stays behind with old models is something they dont care about.

[fromtrektocolnago]

@powerfulpete.
I don't disagree with anything you said, bike services and selling small items brings far better profit margins to the local bike shop than selling new bikes, but i don't believe they'd want out of that business either. New bikes draws customers in and helps in building a relationship.

[raisinberry777]

The booming online market they speak of is one looking for cheaper prices. To me it looks as though products will still be sold at RRP to protect the retail model (and not piss off the shops). If it's the same price, then what's the point of buying something online?

The model needs competition to make it effective. To make it effective would also be the death of their current retail structure. Double-edged sword.

[mattr]

Having said this, I see plenty of enthusiastic/relative newbies on ~2K rides that are not sized correctly by the LBS.

Probably been shopping at my "local" trek dealer.