The value of a solid marketing strategy is something frequently underestimated throughout the cycling industry. An extension of said issue is that beyond helpful articles offering advice to the IBD, there’s a limit to the impact such feedback can have. Foremost, however, believes it has the answer.
Foremost Golf was founded back in 1984. CEO and co-founder Paul Hedges started out as a qualified PGA professional working at Winter Hill Golf Club, where he remained for 13 years. “Winter Hill is owned by the John Lewis Partnership, so those years gave me a fantastic insight into the way the retail business works, customer service and strong supplier relationships, so it was a great bit of groundwork for me,” says Hedges.
Hedges very quickly recognised the challenges of being an independent, and, together with five other golf professionals, created something of an informal buying group. By 1990, Foremost had established around 100 members, and it was at this point that the company decided it was time to kick on with a more formal business plan. “We’d previously been growing organically through word of mouth,” says Hedges. “I became a full-time employee, and we actively went out into the marketplace to seek members. We grew quite rapidly to around 300 members within a couple of years, and by the turn of the millennium, we were up to 1,000.”
Picking your battles
Ironically, Hedges first perused the cycling industry several years ago when he believed it to be a threat to the golf market. At the time, it became apparent that people were putting down their clubs in favour of cycling adventures, so Foremost began investigating its potential competitor in an attempt to counter that trend. “To my surprise, I found just how similar the industry was to golf,” says Hedges. “The expert – the IBD – is the absolute heart of the marketplace, just like the club professional in golf, whereby they came to the industry not because they were retailers or that they knew business very well, but because they had a passion for the sport.
“These experts, however, have limited resources and are facing many challenges in an ever-evolving marketplace,” Hedges continues. “The internet is a particularly notable example, and the experts in these positions often don’t have the tools or the resources to compete against it, so they very often end up fighting the wrong battles.”
Hedges says that instead of utilising their expertise, IBDs often spend too much time attempting to compete on price alone. Having spent decades fighting the right battles, he believes Foremost can transfer into the cycling market and deliver the added values and benefits for the IBD in the same way that it has for the golf professional.
“Foremost is a brand new company with 34 years’ experience,” states Hedges. “The whole point of trying to associate ourselves through Foremost Golf is to recognise that we’ve been there and we’ve done that. There is an element of credibility and established business practices, rather than being a brand new company trying to do something where we don’t know whether it’ll succeed or not.”
Refining the business model
You may already be thinking about how previous buying group attempts within the cycling industry have failed, but that’s an issue Hedges is more than aware of, having had the point raised from day one. “My understanding is that they were buying groups, and buying groups alone,” he says. “Foremost is so much more than that. Being a buying group is something of a prerequisite – we have to ensure we’re getting the best terms we can – but it’s integrating the buying marketing and selling together that is going to make all of the difference. We cannot have a successful business model if all we’re trying to do is lower the price people are paying for goods.”
Hedges highlights the irony that simply buying at lower prices often means the retailer passes on a lower margin and lower retail prices. “Our business model is about working closely with the brands and distributors and demonstrating how we can improve the efficiency of their marketing and their selling aimed through the retail channel. If they don’t see the value in what we offer, it isn’t going to work.”
He continues: “If you simply try to match price alone, it’s a form of slow suicide. What we’ve got to do is to make it absolutely clear to the cyclist that what we can provide them with is better added value. Equally, IBDs have got to understand that they’re not selling bikes. What they’re selling is enjoyment, performance, expertise… and those are the core skills that they need to have – not just buying and selling.
“The passion and the expertise that the IBD has – that’s their unique feature, and it’s something that the internet will never have.”
Foremost Cycling soft launches on 1st October, with a full rollout planned for 1st January 2019. Having already put the feelers out, the initial reaction to the Foremost concept has been overwhelmingly positive, according to Hedges. Foremost Golf allocated one of its business development consultants to begin visiting IBDs, and so far, the pitches are seeing one in three shops climb on board. By the time this article is published, Hedges expects to have around 50 shops signed up.
“A further one in three have stated their interest, but want to see how the idea develops first,” says Hedges. “At the moment, sign-ups are based on an element of hope value, because we’re not active yet, so there’s an understandable element of scepticism out there.”
Hedges originally set out a programme of 100 IBD sign-ups within the first 12 months, so to get 50 in its first two months represents a gigantic step in the right direction.
So, how exactly does the Foremost concept work? From its soft-launch date on 1st October, the company will launch RIDe, an online, members-only trade portal providing education, opportunities, campaigns, selling advice, supplier information and brand details.
“RIDe will be a trade portal, but everything we provide to the IBDs will be made available, and we’ll create a weekly bulletin that will go out to the members, highlighting activities, new propositions and offers,” explains Hedges. “There will also be a members forum, a wanted section, and other added value propositions – whether it’s till systems, shop insurances, etc.”
Foremost Cycling will also be delivering an integrated marketing platform to its subscribers. “The concept begins with the brand and distributor, identifying what the best products, offers and promotions are, and delivering that to the IBD by way of campaign or proposition.” Hedges pauses to note that these add-ons will always be optional, and that there is nothing compulsory in anything that Foremost does. “Every IBD will choose what they do and don’t want to take as a service or benefit,” he says. “These services will be delivered through the digital community, be it email, newsletters, social media. We will follow this up with in-store and Point of Sale (POS) material. The real power here is that when a consumer hears of something via the internet, he sees the same something in the shop. It’s fully integrated, right to the extent of having monitors in-store that will be displaying promotions, campaigns and activities.”
The group plans to have its business development consultants on the road regularly. These retail experts will head to individual IBDs and give them unique feedback and advice on the business. This encompasses fundamentals such as merchandising, better displays and better signage, right through to more case-by-case issues such as creating a more welcoming shop, and delivering better customer service.
“I’ve been to dozens of IBD stores, and in virtually none of them is there any proposition about servicing, maintenance, or any of the added values available,” says Hedges. “We’re really missing an opportunity to explain to people the difference. Given that we want people to buy bikes that are suited to them – ones that are individually tailored, customised and fitted for any given customer – we need to be better at explaining this as part of the shop display, rather than having dozens of standard bikes lying around, most
of which won’t suit a specific customer and are little more than wallpaper.
“With that in mind,” Hedges continues, “we’re going to be talking to the IBDs about how they merchandise themselves and their services, how they can communicate better, how we can provide financial plans, cash flow analysis – the whole picture. We’ll be working closely with EPOS providers so that we can interpret data, because the data coming out of these systems is fantastic.”
The financial aspect
Whether in our professional or personal lives, we’ve all been in a situation – likely on multiple occasions – where we read all about a product or proposition, find ourselves completely sold on the concept, only to be disappointed by a gigantic price quote at the bottom of the description.
Foremost Cycling, however, is offering itself to IBDs for £25 per month, with no joining fee or hidden costs. Moreover, if an IBD is to sign up now, it will receive free membership until January 2020. “The entire Foremost concept is about supporting the IBD,” says Hedges. “We don’t tie people into membership; they pay each month, and if for any reason they didn’t like what we were offering, they can leave in that same month. That’s something I
feel is very important, and highlights our confidence in what we deliver.”
In addition to being supported by the independents, the Foremost Cycling business model will need the support of brands and distributors, which will implement Foremost’s marketing services and, (hopefully!) decide that those services are the most cost-effective way of supporting the IBD. “We’ll also be generating income from our associated relationships, where that’s directly from the services we provide or through sponsorships and advertising,” explains Hedges. “There will be add-ons for the retailers to buy into,
as well, but these are strictly optional.”
Rather than simply working with the IBDs individually, Hedges is also keen to bring together workshops and seminars for bike shop owners. “This is another thing I believe is missing from the IBD – there’s no “bike shop school”. Many owners have been playing it by ear since day one! There’s a huge amount to be gained by networking and by bringing IBDs together.”
Foremost’s vision is to host regional workshops where 10-15 IBDs get together and receive practical business advice. “This would mostly be in the form of advice they can take away from us and apply in their own stores immediately, but we’d also like the shops themselves
to share best practice, detailing what works best for them, and why,” Hedges says. “One of the big pictures we’ve got to convey to the IBDs is that they are not each other’s worst enemy; they’re really not the big competition for each other.”
Offering a preview into the sort of advice Foremost Cycling hopes to offer, Hedges states: “Lots of IBDs have almost abdicated from selling bikes. They claim they can’t make a profit on the rides themselves, so they’re going to stop pushing them. I worry that they’re missing the bigger picture. When you sell a bike, you are also selling a platform on which to sell many other things. Maintenance, service, lights, extra fittings… the list is endless. You need to live with the small margin on bikes because that’s what encourages sales elsewhere.”
He concludes: “You don’t need to be an expert IBD to sell accessories, but you do to be able to fit somebody with the right bike. We mustn’t move away from our core competency. If we can avoid that and build real relationships, establishing
loyal customers, overall, we have a very, very healthy business.”