Chain Reaction at 25 - BikeBiz

Chain Reaction at 25

How did a small Ballynure bike shop become Royal Mail's biggest customer in Northern Ireland?
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The powerhouse online retailer started life in 1984 as Ballynure Cycles, in the small village of Ballynure in Northern Ireland. The first ever sale was a chain link, sold for 11p.

Founders George and Janice Watson later handed over the day-to-day running of the company to their eldest son, Chris, now MD of the company.

Chain Reaction Cycles went big into mail-order in the when magazines such as MBUK were full of ads from many small, regional IBDs.

"With a great range of stock and growing ambition we started to think about what should happen next," said Chris Watson.

"Reading the bike magazines, they were full of shops advertising all the latest kit, the same kit that we had. We realised that the future was about getting out there into what I guess is now called the global market, spreading our wings further than just Ireland. 

"Adverts were booked, though the price for a page was incredible to us then. We got our best stock listed and we waited by the phone.

"The ads hit the street and the phone started ringing, and because we'd invested in the product, they were able to sell through."

But it was the advent of the world wide web that was the making of Chain Reaction Cycles, now Royal Mail's biggest customer in Northern Ireland.

Chain Reaction already had an efficient database of its products and when, in 1999, this was ported to the web, ecommerce soon started to drive the business.

Chain Reaction's Michael Cowan said success came from transparency:

"On some sites, the stock isn't ‘live’ and relies on the shop ordering from a distributor. This was even more so back at the turn of 2000, when some stores seem to list everything they could get and did not, or could not, indicate to the customer what they actually had in stock. 

"We decided from day one to take a honest approach. We would link our website up to our live stock system and clearly show customers ‘in stock’ or ‘out of stock’. We knew that some of our rivals might pick up some extra sales by selling things they didn’t have and maybe getting it in on time but we were convinced that our straightforward approach would pay off in the end." 

It paid off quicker than that.

CRCs Frank Warwick said: "It went crazy. I remember we had to put a second floor into our warehouse, then a third and then expanded into the warehouse next door. Two warehouses became four and we found ourselves renting half the industrial estate."

By 2004 CRC was again at bursting point.

Cowan: "We had stock in every corner of every warehouse and it was clear we had out grown our premises. The next step was a really big one. We bought some land and spent a year designing and building a brand new purpose built premises complete with 50,000 square feet of warehouses, a customer contact centre, staff canteen, state of the art workshops and a showroom so we could again offer our local customers the service they deserved.

"In 2005 we performed our biggest move to date. In one weekend we managed to move four warehouses full of stock into our brand new warehouse and we were fully operational by Monday."

Now, with 300 staff, Chain Reaction Cycles is the largest employer in the local area. "We have more staff than the newly built ASDA down the road," said Cowan.

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