Other Specialized going to add Direct to consumer sales on 2/1....

[CRFan1]

SO this is interesting......Specialized is going to add direct to consumer sales as an option starting next month.....

Updated: Specialized Plans to Add Consumer-Direct Sales February 1 - Pinkbike

Specialized is the first major traditional sales brand to offer a consumer-direct option.

www.pinkbike.com

 

[Tim1023]

I can see why they'd be motivated to do that, but if any readers have the flexibility, please support your local dealers. We'll all be poorer once they go out of business.

 

[CRFan1]

I can see why they'd be motivated to do that, but if any readers have the flexibility, please support your local dealers. We'll all be poorer once they go out of business.

Agreed!

 

[rico]

Will this approach prompt specific pricing for bikes bought under this model?

 

[Zimmerframe]

Eck, my experience with Specialized is that if you don't have access to a really good dealer, your warranty is completely worthless.

 

[CRFan1]

Eck, my experience with Specialized is that if you don't have access to a really good dealer, your warranty is completely worthless.

They are not ONLY doing direct to consumer. Its just an option and you can still purchase from a dealer and/or get service from a dealer. Seems they are just adding a purchase option......

 

[CRFan1]

Will this approach prompt specific pricing for bikes bought under this model?

I would assume so......but I guess we will see.

 

[NorthernBloke]

This is a growing trend, unfortunately imo. More and more retailers are looking at removing the middle layer of distribution. LBS's will become service centres only. You'll still have the larger retailers/warehouses but your local independents with either move to service only or go out of business. The person may get a cheaper initial purchase (not including the massive rises due to inflation that are coming 10-15% in 2022) but ownership costs will be significantly more.

 

[Zimmerframe]

They are not ONLY doing direct to consumer. Its just an option and you can still purchase from a dealer and/or get service from a dealer. Seems they are just adding a purchase option......

But as there's a shortage of bikes, for various reasons, what would the need be to try and bypass the existing dealer structure ? Its not like they can't keep up with the number of bikes being sold. Reading between the lines it seems to have been done just to leverage a reduction in dealer margins, especially as people are desperate to find the bike they want, so check on the main website first ?

Already in some countries dealers won't touch your bike if you didn't buy from them, this reduction in margin will only cause that to spread further.

 

[Tim1023]

This is a growing trend, unfortunately imo. More and more retailers are looking at removing the middle layer of distribution. LBS's will become service centres only. You'll still have the larger retailers/warehouses but your local independents with either move to service only or go out of business. The person may get a cheaper initial purchase (not including the massive rises due to inflation that are coming 10-15% in 2022) but ownership costs will be significantly more.

I first saw the term disintermediation as a business trend in the classic Marketing Management by Philip Kotler about 20 years ago. It's been happening everywhere.
I work in the software industry (B2B). The big software houses used to rely on dealers to provide local customer contact and support for which the dealer took a cut of the initial license sales, maintenance and support as well as the service fees for installation & programming around the solution (which is very much necessary for complex software). Now the software companies are moving to a subscription model, keeping all the margins themselves and throwing dealers the bone of a low margin, short-term installation and configuration project. The customers will be the losers too as they are expected to accept completely standardised software.
Like I said, support your local dealers. For whatever kind of product

 

[boBE]

I doubt Spec will include a torque wrench with the "kit bike".

 

[Jackware]

Some car manufacturers are moving to this this calling it the Agency model, whereby you buy the car directly from the manufacturer but it's supplied via a dealer who gets paid a commission to prep and hand over the car and get the future service/warranty income.
In theory this helps the dealers as aftersales is more profitable than new car sales and they don't have money tied up in vehicle stock. Also many potential purchasers dislike the dealership sales environment and a younger generation are happy to buy on line.

Some bike shops seem to be very short sighted regarding taking on work from non-purchase customers, though maybe this is due to lack of warranty support from the bike manufacturers/distributors.

 

[NorthernBloke]

Some car manufacturers are moving to this this calling it the Agency model, whereby you buy the car directly from the manufacturer but it's supplied via a dealer who gets paid a commission to prep and hand over the car and get the future service/warranty income.
In theory this helps the dealers as aftersales is more profitable than new car sales and they don't have money tied up in vehicle stock. Also many potential purchasers dislike the dealership sales environment and a younger generation are happy to buy on line.

Some bike shops seem to be very short sighted regarding taking on work from non-purchase customers, though maybe this is due to lack of warranty support from the bike manufacturers/distributors.

Definitely looks like the Agency model (I work in the Motor Industry and it is being pushed big time by the manufacturer)

They are looking at a time where everything is sold online and there is only an aftersales dealership type network.
It'll only work if they up their warranty games and make it like the car industry where you can take your bike anywhere.
The question 'did you buy it from us' you often get will be replaced by 'yes I can see your Bike is in warranty but... unfortunately wrapping your bike around a tree isn't covered"

 

[jerry]

I can see why they'd be motivated to do that, but if any readers have the flexibility, please support your local dealers. We'll all be poorer once they go out of business.

Profit maximalization, pocket the middlemens' margins! Happens everywhere - seen the Dyson ads "buy it from the maker"?

 

[NorthernBloke]

With my finance head on, it'll take an awful lot of stock out of the supply chain, a one off gain to the supplier and retailer.
With my head and heart I still think it is a short sighted profit max'n exercise, with little regard to the customer.
Given stock is near zero and supply chain times are massive I think many are trying to reset the industry to how they want it to look and operate.
TBH I bought online as I wasn't prepared to wait five months (probably longer now) but I would have preferred my LBS. The local dealer were not my LBS but they actually have been very good in sorting problems with the bike. As a result I will be taking all my bikes there now, not that they can get parts lol.

 

[gbarfoot]

The warranty system will definitely need to get better. It's ridiculous that for a multi thousand dollar vehicle with a serial number and BT reporting you are required to pass a receipt around to prove warranty status. I'm assuming the moto brands getting into this space will push bike brands to elevate their game in this regard.

 

[CRFan1]

Just chatted with my dealer and apparently this direct to consumer thing is not going to apply to any eBikes.....

 

[Harold]

Just chatted with my dealer and apparently this direct to consumer thing is not going to apply to any eBikes.....

Perhaps, but just for now… Direct to consumers will grow steadily within the industry.

 

[leftside]

It's the Tesla model.

 

[Joe_wei]

Riding Spec since 30+ years. But if my dealer will not have spec anymore I go w another brand. Other mothers have hot daughters too. And for me dealer is more important than the brand. And just in case I need to switch to direct sales company, the Canyon headquarter is 10 Mins around the corner. And I will sell all my Spec Bikes because of the ruined image.

 

[randycpu]

My local Specialized dealer is Mike's Bikes. They are the largest chain of bike stores in Northern California with twelve large stores between San Jose and Sacramento. They carried Specialized, Santa Cruz, Orbea, Cannondale, BMC, Giant, Salsa, and twelve other brands.

They have just now parted ways with Specialized due to Specialized's demand for them to become exclusively a Specialized retailer. This is a major blow to Mike's Bikes, but I'm not sure if Specialized will notice.

There are now large gaps in the Spec dealer network in Specialized's home turf.

 

[NorthernBloke]

My local Specialized dealer is Mike's Bikes. They are the largest chain of bike stores in Northern California with twelve large stores between San Jose and Sacramento. They carried Specialized, Santa Cruz, Orbea, Cannondale, BMC, Giant, Salsa, and twelve other brands.

They have just now parted ways with Specialized due to Specialized's demand for them to become exclusively a Specialized retailer. This is a major blow to Mike's Bikes, but I'm not sure if Specialized will notice.

There are now large gaps in the Spec dealer network in Specialized's home turf.

I presume that Spec think they can bully their supply chain.
It's the cheapest way of setting up a dealership based model, all of the benefits non of the risk.
Given the high price point of Spec (eMTB >£7k+ is the norm here in the UK), any dealer will be turning a huge chunk of their core business away.

 

[zrcrazy]

Just chatted with my dealer and apparently this direct to consumer thing is not going to apply to any eBikes.....

Not the way it looks on the USA site... Ebkes shipped right to your house

 

[boBE]

Not the way it looks on the USA site... Ebkes shipped right to your house

How To Assemble Your Bike

www.specialized.com

"*Turbo electric bikes are not eligible for Ship to Home at this time. "

 

[A1000]

How To Assemble Your Bike

www.specialized.com

"*Turbo electric bikes are not eligible for Ship to Home at this time. "

Having looked at the UK Spec website you can get Turbos delivered direct, although with a £75 deliery charge. I hope this is a well thought through adjustment to the business model as the quality of the warranty/after sales support has been a differentiator for me to sticking with Spec for 10+ years.

 

[lumpy]

My local Specialized dealer is Mike's Bikes. They are the largest chain of bike stores in Northern California with twelve large stores between San Jose and Sacramento. They carried Specialized, Santa Cruz, Orbea, Cannondale, BMC, Giant, Salsa, and twelve other brands.

They have just now parted ways with Specialized due to Specialized's demand for them to become exclusively a Specialized retailer. This is a major blow to Mike's Bikes, but I'm not sure if Specialized will notice.

There are now large gaps in the Spec dealer network in Specialized's home turf.

Mike's Bikes signed with Pon Group, which owns at least 10 different brands including Santa Cruz. Why would Specialized sell to Mike's when they're selling the competition?

 

[randycpu]

Mike's Bikes signed with Pon Group, which owns at least 10 different brands including Santa Cruz. Why would Specialized sell to Mike's when they're selling the competition?

Just googled that and see the ownership change. Thanks for the news...
The article said that Spec and Trek both offered to buy them. And that Trek is buying many large cycling retailers in the US.
What changes are next?

 

[Tim1023]

Why would Specialized sell to Mike's when they're selling the competition?

Yup, the big boys can afford to think that way, but it's bad for consumers and the smaller dealers. Same in many industries. I assume that's also the reason that department stores are struggling so much at the moment.
With supermarkets, the market dynamic is a bit different, where the supermarkets have the power and most suppliers are forced to be sold along with the competition.
Sorry to get nerdy, but it's a classic case for some good 'ol Porter's five forces analysis

 

[Tim1023]

Just stumbled across this interview on BikeEurope: Why did Specialized decide to start selling online now?

 

[SwissChess]

Disruptive Technologies-Business-Services Models!

With the Pandemic, the shortage of bikes/parts, and the first only online business showed us, online is the way to go ....... as we all have too much time to be online, and I even don't take my kits in to the account they buy almost everything from the phone.

The key challenge will be to finding a good and big LBS and the S stays for Service. And big for the need all the different parts, as bike industry is far a way of standardization.

Here speaks the family father with xxxx bikes .... hey Dad can you change my brake pads.