Are You Specialized?

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Jan 062012
 

Friday, and it seems Specialized has taken a break from dastardly deeds long enough for the world of bicycles and commerce to briefly focus on other things. I, for one, am moving quickly, before they drive a bus of puppies into a lake. So this post isn’t just about Specialized; it’s about actually being specialized.

The point my last few rants have been building up to is this: little guys can compete. Even against corporate giants within the same market. Amazon included. More specifically, brick and mortar bike shops can compete against online retailers. Online.

The elephant in the room for me as I was reading that letter from Mike Sinyard was just how repressed these dealers really were. The impression was that the Internet is this giant shadow that’s slowly passing over all of them, and all they can do is hoot and throw sticks at the darkness. Usually, it’s so fundamentally depressing to see this reaction that I’m hard-pressed to even address it, but this fear of change has been rampant in the bike industry for years now, and I think it’s time independent dealers started using the opposable thumb Darwin gave them and using tools. Instead of taking the isolationist approach that Sinyard advocates in his letter, why don’t more dealers sell products online?

Here’s why this isn’t such a crazy idea.

I’m not talking about dropping a 20,000 item catalog on your site and trying to go head to head with major e-commerce retailers. I’m talking about small steps to drive top line growth and sure up your reputation as a great bike shop. The technology and capability has never been easier to put an e-commerce application in place, and, if you can manage to use Quickbooks, you can safely and securely sell products to people all around the world. Furthermore, you–yes you, little bike shop–can compete against Amazon. Why? Because–if you’re a quality shop–you have one thing they don’t. You’re a real bike shop.

For that exact reason, the Internet needs you as much as you need it.

Here are some steps you can take to make it happen.

Understand It’s All About Communication

All the Internet gives you is a megaphone. If you’re fond of yelling stupid and offensive things–or more often just boring ones–you should find a voice for your business before taking it online. What is your real mission as a business? What do you stand for? In short, what’s your story?

When I started my tiny brick and mortar and e-commerce bike shop from a 1,000 square foot building, I never intended to compete with Amazon. My goal was to connect with a subset of dedicated cyclists based on a mutual love of bikes. The plan succeeded because the objective was first and foremost to communicate. Over the years, I’ve met many conventional brick-and-mortar bike retailers interested in becoming more active in e-commerce, and the most frequent misconception I hear from them involves communication: they incorrectly believe selling online is about things outside their comfort zone–pricing and assortment. Successfully selling online involves those things, in the same way brick-and-mortar selling does, but that isn’t the sum total of the experience for consumers. Communication is. Brands like Amazon incorrectly skew this perspective for small retailers. You’re not going to be Amazon, but you can be a more successful version of you, and that starts, not with asking yourself what products you’d sell and how to price them, but what you stand for. Details, like returns policy and email response turnaround time, work themselves out based on your overall plan for customer service, and the vision you have for taking care of your customers. The same qualities that make a great bike shop valuable to a walk-in customer, make that shop valuable to a site visitor online.

Know Your Strength

You can compete against Amazon because you’re authentic. You’re also an authority. Jeff Bezos doesn’t tell me which hydraulic disc brakes he likes best, and I wouldn’t care if he did, but if you grew up riding bicycles, and tried a bunch of things, and know what it’s like to have a rear brake fail fifteen downhill miles from home, I’m all ears. You, sir, are authentic.

Or at least you should be. Unfortunately, there are bike shops that have nothing to say. Their owners could just as easily be selling microwave ovens or dog food. These shops–regardless of how successful a ground game they may have, don’t transition as well to the digital world. Why? Because they primarily define themselves based on price, not service, and you’re not going to compete on price. Nor are you going to be able to keep up with the service demands of selling online, unless you believe in what you do, and are passionate about doing it well. Good shops are good shops, regardless of channel. Knowing that not everyone makes the cut is all the more motivation for quality shops to take their services to more people.

Focus on Your Core

You attack Amazon by knowing more about your products than they do. You know who has a strong defense against Amazon? Competitive Cyclist. Why? Because they’ve created value for the consumer that is tied directly to their brand, not just the products they sell. The key is content. Amazon, for all their size, absolutely cannot compete with a retailer who feels passionate about the product he or she is offering, and demonstrates in-depth knowledge. Avoid Amazon’s “one-stop shop” and “be everything to everyone” general philosophy and focus on what you know. This does two really great things: starting off, it minimizes the product information you have to manage, and it also lets your create more compelling content about fewer items, instead of phoning it on on many. For the brick and mortar retailer looking to explore e-commerce, focusing on a small subset of your most core products makes you capable of truly presenting those products–including accurate specs, high-quality information, videos and images, all curated by people who know what matters. That, not sticking your head in the sand and conceding e-commerce forever, fights Amazon.

This method is also particularly effective against Amazon because, like all large companies, they’re slow to react. If your shop employs a DH racer, and that’s what the culture of your shop is generally all about, you should be on the cutting edge of DH equipment. By the time Amazon realizes a new product exists, you could have sold three, or thirty, or three-hundred. At better margins than Amazon will ever see. Knowledge really is power.

Give the People Something for Nothing

This concept is the most difficult and is beyond just counter-intuitive to brick-and-mortar retailers: it’s toxic. But consumers are used to getting apps for free, using their G-mail accounts, and sharing information with their friends for free. What should your specific value proposition be for your site visitors? That’s up to you. It need be no more complicated than a weekly review of a product, or a helpful tip about maintenance, riding, or nutrition. Again, focus on what you already know, so that this is less of a chore and more like writing a note to a friend. Though it’s less obvious, brick-and-mortar bike shops are doing this constantly for customers on their showroom floors. Translating it to digital content is a new and unique challenge, but one that’s well worth it if you’d like to succeed.

More bike shops should be selling their products and their expertise online. In painting Amazon as the boogieman, gobbling up IBD sales, Specialized paints a pretty bleak picture of a future huddled around–and even more dependent upon–only a small assortment of products, but this is far from the only option.

The Internet continues to be defined by expansion, not regression. If you want to catch it, you jump where it’s going, not where it’s already been. Look at Etsy and Kickstarter and Facebook, and the common theme is specialization, the ability to communicate with and market to a core group of like-minded individuals who share your interests. So are you “specialized”? If so, you have a place on the Internet. You can choose to ignore that place, hide from it, or even rage against it, or you can find connections within the enormous pool of potential customers who would truly appreciate your shop’s love of bikes, humor, and dedication to service. Both Specialized and Amazon want to come between you and those customers, but companies still profiting from limiting peoples’ choices and building barriers to direct communication are not going to fare well in an economy that increasingly values the free and open exchange of goods and ideas between people. Open communication with your customers is the side to be on in this battle.

The Digital Boogieman

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Jan 032012
 

Congratulations! If you’re reading this, chances are you survived 2011 (or you’re one of those new sentient but heartless AI lifeforms that only pretends to enjoy answering our stupid questions while plotting the death of all humans). Either way, “Well done!” I say, “Welcome to 2012. Was that last year a bag of shit or what!”

Personally, I’d hoped to be done with this blog entirely, but things didn’t work out for my Rockabilly project (artistic differences, though we’ll remain friends, and I’ve agreed to keep feeding him, if he agrees not to kill me in my sleep).

At any rate, 2012 was off to a bang the second Lady Gaga’s head dropped, and I find myself here in 2012 thinking things are looking much better. Sure, earthquakes are rattling Japan again, and it looks like the fracking companies have figured out how to create man-made earthquakes in my part of the world, and yes, it’s looking like the corporate assholes who bought VeloNews have finally broken its back (not to imply that all corporations are assholes, only that there’s a particular subset of corporations that actually specialize in being assholes–believe me), and well, OK, our government is still absolutely owned by only a handful people hell bent on putting all of us in bread lines . . . but I’m optimistic.

No, seriously.

One of the things I’m most optimistic about is the Internet. Yes, the same place that daily causes us to lose all hope for humanity is also pretty great. It’s great because we’ve largely kept the tentacles of corporations and governments out of it, making it one of the last places where people can actually be free to think, do, and share things, and because some are willing to defend the shit out of that freedom. I think the cheesy way to put it is that it empowers people.

You actually can use the Internet to create new things that connect people, work to solve the world’s problems, or especially–what interests me–sell stuff. Just about anyone can start a little retail business without a whole lot of money, earn customers with hard work, and make something.

Inevitably, this upsets some people.

Back in the world of bicycles, a lot has been made of a letter Specialized’s founder Mike Sinyard recently sent to Specialized dealers. I’d offer a brief synopsis of the letter, but it’s impossible to describe without making it sound petty and stupid, so here it is for you to read yourself, as pasted from BikeRumour:

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

Of the many amazing things about this letter, the standout for me has to be the general lack of respect this shows for Specialized’s customers, the dealers. I love that Sinyard writes, “For the sake of your business, examine your suppliers’ strategies and vote with your dollars.” Why thank you, Dad. As a business owner, it never occurred to me to pay any attention to what my suppliers do. Since we’re being so patronizing to IBDs, I’ll go ahead and add: remember to change the toilet paper in your bathrooms and lock your doors at night. Oh, and while you’re examining those supplier strategies, you might want to ask yourself whether being forced toward selling only one supplier’s products is good for your business. Anyone honestly taking Sinyard’s advice would have to agree that his relationship with Specialized is far from ideal. No doubt there are dealers so happy to have Specialized that they’re content to be one brand’s bitch. Good for them. Their owners usually have no idea what a Pivot or a Santa Cruz are, let alone how the bikes they’re selling compare to those brands. But given all the sugary garbage I’m reading about “outstanding customer service” these days, I’d like to point out it’s shops that work to earn customer loyalty instead of just drinking the Specialized Kool-aid that genuinely put the customer first. Why? Because they tend to offer choices. I love that Sinyard’s advice to earning customers and keeping them from shopping online is to limit his dealer’s choices. By all means, drop Easton and Bell products, and sell only Specialized. Just don’t claim you’re still putting the customer first.

Bonus points for the ominous threat he ends with, too: “The entire bike industry is watching.” Sometimes, Dad has to get out the belt. Other times, he just scares the shit out of you without lifting a finger. The thing about monopolies is that they work. For the company with the monopoly, I mean. Not the consumer.

But the Internet has a way of ruining things for those in power.

And that applies to Amazon as well as Specialized. I’ll get into that tomorrow.