ARE DIRECT-TO-CONSUMER BRANDS KILLING BIKE SHOPS?

Bikes in boxes are changing the bike buying experience

BIKES IN BOXES

By Travis Reill

If you have a favorite mountain bike YouTube channel you follow, you’ve probably experienced swiping through the channels to see a thumbnail reading, “New Bike Day!” The background picture of the thumbnail is usually a box—a big box—with a bike company’s logo on it. Or, perhaps, the logo is blurred out with a large question-mark graphic over the top, further building suspense, clicks and the chance we the consumer will watch longer.

Seldom do you find a video from a popular YouTuber proclaiming “New Bike Day” that shows them heading to their local bike shop, testing several bikes, chatting with employees, and walking out with a new whip.

Let me be clear: this isn’t a dig on these MTB YouTubers; I am subscribed to them all. And, once these YouTube channels become popular, different companies will support and sponsor the channels, furthering the reach of their brand. A sponsorship eliminates the need for the YouTuber to head down to their local bike shop for a new bike. And, let’s be honest, none of us would pass up a sponsorship.
This isn’t to say that your favorite YouTuber doesn’t have a bike shop that they call their own. Shout-outs to bike shops are prevalent in these videos, and I imagine there is a lot of bike-shop wrenching behind the scenes. But, I believe one of the things these YouTube videos do is reinforce the notion that bikes come in boxes.

Direct-to-consumer brands like Fezzari build their bikes in-house and offer spec customization that you don’t always get at a retail location.

 

A COUPLE OF CLICKS AND IT’S ON YOUR DOORSTEP

I think there is a common theme in society with how we consume most things. Convenience has become key. Once upon a time pizza was about the only food item that could show up at our doorstep. Now, with just a few clicks, we can literally have any food we want delivered to our house, place of work, pool, park, etc.

And, we aren’t just talking about food from a restaurant. Groceries can be sitting at our doorsteps in a few hours if you know the right apps. Don’t even get me started on Amazon! Remember the days before the pandemic when some Amazon Prime items would show up on the same day?

An argument can be made that this consumer-convenience mentality has bled over into how we purchase mountain bikes. Bikes now come in boxes…to our homes. We research online, study the geometry numbers and click “purchase.” A couple of weeks later, we have our own little “New Bike Day” without ever setting foot in our local bike shop.

And, if we can make that argument about YouTubers, I don’t think it’s a stretch to come to the same conclusion about direct-to-consumer bike brands. So, we then can ask the question, “How much are direct-to-consumer brands hurting local bike shops?”

Canyon’s showroom in Carlsbad, California, has their full line of bikes and offers bike fits and parking-lot-style test rides.

WHAT IS “DIRECT-TO-CONSUMER”?

For decades, the flow of mountain bike production has been as follows: Manufacturer > Distributor > Retailer (bike shop) > Customer. If you wanted to buy a bike, you went down to your local bike shop, received help from one of the employees and rode out on a fresh set of wheels. The bike shop was, and still is, the place for the mountain bike obsessed, becoming a home away from home for many. Life-long friendships developed. Customers and employees became riding buddies. And sometimes, customers became employees.

Factor offers its bikes and the ability to customize them online.

Direct-to-consumer, or D2C, is exactly what it sounds like. These are bike companies that completely skip the distributor and retailer portion of bike production, delivering bikes directly to you and me—the consumers. Cutting out these two steps typically drops the price, but it also cuts out the local bike shop.
Canyon, Fezzari, YT, Polygon,  Commencal, and now Yeti, are often the D2C brands we think of when discussing the topic. Whether you like D2C or not, it is definitely here to stay. And, while some may think that these brands represent the destruction of the bike shop, many see them as companies adapting to current consumer trends. Still, others don’t find them a threat at all, recognizing a slight change in how consumers purchase with emphasis on “slight”.

The quality mountain bikes we’ve all come to know and trust are still found in our local shops. But, now, we can also find very high-quality bikes that will be delivered to your door. These D2C brands employ bike mechanics and other folks from the mountain bike industry, guaranteeing a well-designed and -built product. With these professionals backing the brand, is the need for a local bike shop diminished?

There are an increasing number of brand “concept stores” that only sell that brand’s bikes and accessories.
Photo by Alex Hoxie

A CONVERSATION WITH CANYON

Many of us can remember when Canyon brought its direct-to-consumer model across the pond to our homes in 2017. What many may not realize is that Canyon has been putting bikes on doorsteps overseas since 2002. While it can be difficult to remember a time before Amazon brought us everything, it can be equally as difficult to imagine buying a bike online in 2002.

Clearly, they were doing something right, finding their way to the U.S. and settling in sunny Southern California. But, not everybody was happy to see them. Brian Allen, the sales manager at Canyon USA, spoke some about those times. “Early on, bike shops felt a certain way about brands like Canyon, but from then until now, I think it is very different.” A dive into the 2017 comment section of articles covering Canyon’s entry into the U.S. market reveals some of this hostility Allen alludes to.

While time likely cooled some of these tensions, Allen also attributed it to the fact that there “are no Canyon service centers across the US. We recommend bike shops to customers every day.” Allen spoke of Canyon customer service representatives helping customers find bike shops in their area for help with building the bike or tune-ups.

Shops like Project Bike not only have new customers, but these are customers they may not have seen without the direct-to-consumer models.
Photo by Alex Hoxie

As time went on, Allen felt that bike shops stopped seeing Canyon customers and started seeing patrons. “The bike shops figured out an opportunity to bring a customer in who doesn’t have that resource through the brand and make them their customer, and sell them on upgrades and accessories. Obviously, there is competition there, too, and maybe they’ll sell them on their next bike.”

But why sell bikes directly to customers rather than go the traditional route? Allen said this decision wasn’t just to capitalize on the market. “Being in direct contact with the customer allows for direct feedback on what is and isn’t working. You can then be faster to make changes, if needed, to the product.” Allen went on to discuss how information and feedback can easily be lost through the traditional model.

Now, I imagine that Canyon probably isn’t making geometry changes based on my cousin in Boise who rides a Spectral, but there is something to be said about Canyon’s connectivity to their customers. Allen compared it to a game of telephone, with information going from the customer to the bike shop, then the distributor, and finally to the manufacturer. Canyon has the opportunity to get information from the source.

We don’t view Canyon as supporting our local businesses. Many folks have strong feelings that the D2C model destroys the local bike shop. With slogans and movements such as “Shop Small Saturday” and “Buy Local,” companies like Canyon can be seen as putting the local brick and mortar under.

Often, we don’t support them, either. When I asked Allen about this very concern, he responded with a very realistic scenario: Let’s say you live in a smaller town with one bike shop. Your shop sells Specialized, but you’ve had your eye on a Giant. So, you drive a couple of towns over and find a bike shop where they sell Giant. This scenario supports a bike shop but not your local bike shop.

Ultimately, Allen hopes that companies like Canyon and bike shops can put the customer first. “Our ambition is the same as the local bike shops: getting people on bikes, supporting them to continue to ride and inspiring others to ride. That’s our goal, and I think we can all do that together.”

The “click and collect” sales model sends the bike to a shop where they get a cut of the sale for bike assembly and hand off to the customer. Photo by Alex Hoxie

THE LOCAL BIKE SHOP

Tension was certainly in the air in 2017–2018 with Canyon’s entry into the US market, but Allen suggested that conflict has cooled down since then. I sat down with Francios Benz, a manager at Pine Mountain Sports in Bend, Oregon. Pine Mountain has been serving Bend skiers and mountain bikers for over 20 years. They are one of Oregon’s top providers of Trek and Santa Cruz mountain bikes.

I started the conversation by asking Benz about Pine Mountain’s perspective on direct-to-consumer bike companies. After a long pause, he responded, “To be honest, I don’t think there are many days here where we’ve really thought about it or have been concerned about it.” Benz thought that this was due in part to Trek and Santa Cruz’s focus still being on bike shops.

Canyon’s California showroom does not offer any sort of service, but the brand’s German location does, so perhaps things will change here as the direct-to-consumer sales model evolves.

With that being said, Benz did acknowledge that both Trek and Santa Cruz have an online presence where bikes can be bought without walking into a shop. However, most direct purchases are sent to a local dealer rather than your front door.

Pine Mountain Sports does get a financial kickback from Trek and Santa Cruz when customers buy online since their policies have the purchases sent to local dealers. While a kickback for handling a bike is nice, it certainly doesn’t compare to what the shop would make if they sold the bike themselves.
If customers can buy a Trek or Santa Cruz with a couple of clicks, what is Pine Mountain doing that works so well? Benz spoke of their shop’s incredible customer service in an industry where some shops don’t always have the greatest reputation. “If you are nice to people and genuine in your approach to educating them rather than just trying to sell them something, they are going to want to be a part of your business.”

Benz also points out a couple of other things he felt the customer looks for. For the most part, D2C brands can’t offer the expertise and experience of having an industry professional help you choose a bike like a local shop can. This is especially true for newer riders. Another aspect was that customers, as Benz put it, “want to swing a leg over the bike.” If I am going to spend $6000–7000 on a new bike, I might want to take it around the parking lot a few times, too.

Ultimately, Benz and Pine Mountain Sports are happy to see the sport grow and to help customers regardless of where they purchased their bikes. “We can be frustrated that the customer didn’t spend their money here or be like, ‘Congrats, that’s an awesome bike. Let us know if you need anything done.’ We don’t care if you bought it somewhere else, we’re just happy you got a bike.” Benz said this no-consequence approach is where they begin their relationship.

Propain is another brand that has chosen the direct-to-consumer sales model.

DIRECT-TO-CONSUMER-ISH

Perhaps in an attempt to keep up with Canyon and other direct-to-consumer bike brands, we’ve seen many different companies adopt a hybrid model of direct sales. Companies like Intense and even industry giant Specialized have adopted a hybrid D2C model alongside their regular sales out of bike shops.

And, there is potential that these hybrid bike brands may be hurting the local bike shop even more. I was able to chat with Paul Keitelman, a manager at Project Bike in Bend, about my hypothesis. Project Bike carries the hybrid brands I previously mentioned, as well as Norco, Transition and Rocky Mountain among others.

Bike shops will always be a go-to for service-related things even if the retail landscape changes.
Photo by Alex Hoxie

Keitelman said they are seeing more bikes coming from the “click and collect” model, where customers buy the bike online and the manufacturer sends it to their local retail partner. The bike is then received and built by the bike shop, with the shop being compensated with a portion of the sale. However, even with the bigger brands, many bikes skip the shop and head straight to the customer’s doorstep.

Where the hybrid model can get especially tricky is when it comes to the local shop representing a brand that is also, in a way, a bike shop. For example, a bike brand may be having a massive sale on products sold directly through them. Often, the consumer will see this sale being offered and go to a bike shop that is an authorized dealer of that brand, expecting to get the same deal. Keitelman explained that while there is often good communication in place between the brands and dealers, there have been instances where a bike shop can actually lose money due to an advertised sale through the manufacturer directly. If nothing else, confusion can be created for the customer who may feel like a shop isn’t honoring a brand’s deals.

Warranties can also be an issue. Typically, when you buy from a shop, that shop will take care of warranty issues that may arise. When a bike is sent directly to a customer’s door but a local shop carries that brand, customers may have the same expectation. “We didn’t make any money off the bike, It was shipped directly to the customer’s door, but they expect us to do it for free. We’re incredibly put out in that situation,” Keitelman explained.

But, it isn’t always bad. Even if a bike wasn’t purchased from a local dealer, a bike shop seems to be the first place a new bike owner visits. They need a helmet or kneepads. They want to get some mountain bike-specific footwear or a hydration pack. “Even those brands that only deal direct-to-consumer, we have people become customers because they put the bike together but still want us to look it over,” Keitelman told me.

Despite the difficult situation, bike shops like Project Bike are in because of the hybrid and D2C models; they are surviving. Keitelman said that they not only have new customers, but these are customers they may not have seen without those models. They bought online, and they now need a shop to call home.

ARE THERE ANY BIKE-SHOP-ONLY BRANDS LEFT?

Yes and no. Sure, there may be different brands that boast on their website that they only sell their bikes through authorized dealers. What doesn’t often compute in our minds is that these “authorized dealers” aren’t just our local bike shops, but Jenson USA and Competitive Cyclists, too. On the surface, is there a huge difference between that and buying from a direct-to-consumer brand? Both end with a bike in a box on your doorstep.

So, how much do these D2C brands hurt bike shops? Do we need to boycott Canyon? Actually, the German brand started as a bike shop, so perhaps they represent the evolution of how bikes are being consumed.

Still, others will say the D2C brands need to go. While it seems tensions have cooled between shops and D2C, I still come across comments like, “Thanks for contributing to the death of local bike shops,” on different Fezzari posts. And, it should be mentioned, there were some bike-shop employees I tried to chat with but who didn’t want to go on record.

Yet, many people and shops have recognized the obvious shift in how we purchase bikes. Pine Mountain Sports and Project Bike, as well as others I’m sure, are happy to service bikes whether they sold them or not. There is recognition of the D2C and hybrid models hurting them, but also a realization of new customers coming in because of these models.

Mountain bikes will always be sold in bike shops. There will always be a place where you can demo a bike for a couple of days, applying it towards a purchase later. Mountain bikes will also always be sold online, packed in large boxes and left on our doorsteps. ❏

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