What makes a successful bike shop? Apart from the ability to spin multiple plates at the same time? Seriously, we put it down to three fundamentals: Genuinely putting the customer at the heart of what we do – and that doesn’t mean constantly offering everyone big discounts or ‘special deals’.
We fear that’s short-termism, sometimes even desperation, and it could lead to ruin for many shops. Genuine customer service is about establishing trust and credibility in every single interaction, even if it means sometimes telling the customer what they don’t really want to hear. Many of our customers have bought multiple bikes from us (upgrading each time, we’re delighted to say!) and we put that down to the fact that with Criterium, customers will get superb but honest advice, not just before they buy/during the buying process, but long after they have bought as well. If someone buys from us, we are committed to them forever.
One such issue where honesty and integrity is a critical issue is with regards to bike sizing. We have lost count of the number of people who have come into the store over the last five years with aches and pains, asking if there is anything we can do. Sometimes they are on a bike that is simply the wrong size for them, never mind badly set up as well. They’ve bought the bike in good faith because they got a ‘deal’ and the nameless retailer just wanted rid of the stock. We find that shocking; if we haven’t got the right size in stock we will say so and we will not, ever, sell the wrong bike to someone simply to get a sale.
We were very lucky, from the outset, to be able to work with people who have the same values and approach as we do – with Trek. It has been the best single decision we ever made. They are a superbly professional company with great products and they have the systems and professional management required to underpin what they do. Every brand we have developed a great relationship with since is because they have the same outlook as we do. Trek, Bianchi, Gore, Exposure, Restrap, Frog, Hope and Kask to name but a few are all very different to each other, but they all have the same focus on quality, performance and customer-focused attention to detail. There are also a few brands where it hasn’t worked out in the last five years and being prepared to shake hands, part as friends and move on is a vital discipline for both brand and dealer.
Keeping commercial and financial discipline is vital – we have made many mistakes in the last five years and it has taken us that long to really work out how this industry operates and how we can be successful in it! We’re still learning and fully expect to carry on doing so forever, but the one thing we have always had from the outset is a laser-like focus on cash, margin and other fundamentals. No business ever went bust from having too much cash.
It is still a frustration that some bike shop owners treat their business as an extension of their hobby. That’s fine if you are happy running a lifestyle business and set your future expectations accordingly, but if you think your lifestyle and hobby business is also your pension, then you need to be prepared for a nasty shock!
Moving with the times
Focusing primarily on the bricks and mortar retailers, we think the market has been gradually diverging into three core segments over the last few years, with what appears to be an acceleration of the process more recently.
First, we have the large-scale multi-channel retailers, many with a considerable number of retail outlets regionally and/or nationally and who have either brought to the sector (or are adapting to) 21st-century large-scale retail norms. They tend to be volume players, willing to work at reduced net margins because they have the scale to generate the volume (and therefore cash flow) and the purchasing power to keep their Cost of Sales very competitive. They may appear from the outside to be involved in some sort of nihilistic ‘race to the bottom’ but they are very professional, working to a clear business model and have got the budget to mid-range cycle market pretty much sewn up.
Second, there are those IBDs who have created a clear narrative for what they are about and developed a fundamental point of difference to support that narrative. It may be a community-based proposition, or a cycle cafe culture or perhaps a specialist focus on maintenance services. With Criterium, it’s premium to high-end bikes where specifying the bike and then building and fitting it to the requirements of the individual is central to everything we do. In the end, it doesn’t really matter what the point of difference is, as long as the shop has a clear strategy for differentiating themselves from the large-scale volume discounters.
Third, there are smaller independents who haven’t yet worked out what they want to be and how they fit into this new world. Many bemoan the fact there is oversupply in the cycle retail market, and the fact that online merchants and large-scale retailers have come in and hoovered up a good chunk of previous IBD business, but this third group seem too preoccupied in moaning about the failing high street, the rise of the internet and the behaviour of the ‘big boys’ without trying to redefine their own position. Members of this segment need to decide quickly what their strategy is because standing still and hoping for the best is unlikely to be successful.