We asked bicycle industry leader Jay Townley for his advice on how to make it in today's retail environment. Jay is a regular on the Bike Industry speaking circuit and has helped countless shops get on track. Check out his words of wisdom below:
If you are in the specialty bicycle retail, or bike shop business in the United States. you already know that you are in the middle of disruptions – with a capital “D!”
Unless you are Performance or one of the other large corporate bike shop retailers, you are probably below the Small Business Administrations definition of a “Small Business.”
Consumers, including you and me, are leveraging the advantages that the Internet has given us. Now we demand 24-7 access to retailers and delivery of products to our homes or places of work along with the ability to send back what we don’t like or doesn’t fit!
So…how can a bike shop survive, and actually thrive in this churning retail storm?
The answer is by following the 7 consumer-focused initiatives explained below - all easily within the reach of every bike shop in America.
As you already know, bike shops are not all the same, so each bike shop owner will have to decide the right mix/approach for their particular business. You can tweak the advice below according to your own financial and merchandising situations.
The first step is to sit down in a quiet place, and decide What you Want. I am taking this directly from Marie Forleo and I highly recommend you visit Marie’s website and take her advice. Once you’ve defined your goals, write it down because, as Marie says, ‘Clarity Equals Power’! The clearer you are about what you want your bike shop to be, the easier it is going to be to communicate your Mission and Vision to your managers and employees.
As a suggestion – don’t try to be all things to all people. Ask your customers what they want from your bike shop and focus on delivering the experiences and lifestyle solutions your customers want from you.
BicycleSPACE, Ivy City, Washington DC
Next sort out the Brutal Truths on which brands are benefiting you and which brands are holding your business back and restricting your ability to generate a real and fair profit – and jettison them!
Start with pulling out all of your Authorized Dealer Agreements that you have signed with the bicycle brands. If you don’t have a copy - ask your sales rep for the brand to provide you with a copy.
Read the Agreements and if you need any clarifications ask the brand, and most importantly, question any clause that, in your judgment isn’t beneficial to your business. Getting the opinion of an attorney or financial advisor will be up to you and your budget, but make sure any Authorized Agreements you have signed are fair to your business and will help you make a profit – or, plan for a future without them and prepare a calendar for sending a proper notice of termination.
Do an internal audit to make sure your bike shop is making a fair gross profit margin on the sale of new bicycles.
Remember, your bike shop is the brand in your neighborhood and community, and you have the local branding power to sell only those new bicycle products that provide your business with a fair retail profit.
Increasing your bike shops inventory turn and GMROI starts with selecting and working with brands and suppliers that are as interested in your shop making a fair profit as they are in making a profit for their businesses.
Ordering and receiving merchandise more frequently and no less than 5 or 6 times per year at landed costs that allow your bike shop to make a fair profit is the place to start. You can streamline this purchasing and merchandising process by leveraging your Point of Sale (POS).
It is not up to the brands or their reps to do your bike shop merchandising for you – unless they will help you install a Good-Better-Best system!
For a given new product look at the models in a category and select a good opening price point model, and a better model with a logical step up in features and retail pricing, and finally select a best model with logical and additional step up features and a top of the category retail price.
Make it easy for shoppers to buy from you – and make it easy for your sales associates to sell to shoppers. Install a uniform step up retail sales methodology and continually train, educate, and reward your staff with an incentive system.
Don’t forget add-ons and including add-ons in your bike shops retail sales methodology and your training and education program – and your staff incentives.
BicycleSPACE, Ivy City, Washington DC
Examine what it really means to be Omni-Channel. Again, as a result of technology the American consumer is empowered- they determine the retail economy. Consumers want, and have come to expect, experiences that give them 24/7 access to retailers. Omni-Channel is a term that is often misused and misunderstood. What it means is a seamless electronic extension of your brick-n-mortar bike shop!
This means creating a commerce enabled website for your bike shop! If your bike shop already has a website, but you are not selling merchandise online, investigate providers and resources to take your website to the next level.
If you don’t now have a website, please seriously consider including one in your next budget and business plan. Your physical store and your website should carry and feature the same merchandise and promotions, and your customers should be able to shop your bike shop, by accessing your website anytime, day or night.
Focus on Totally Outrageous Service and delivering extraordinary experiences and lifestyle solutions – and you’ll have customers for life!
By following these tips, we believe you will thrive in this competitive environment. Remember, be your own advocate when choosing bike brands, hire the right people and make the buying experience easy and fun for your customers!
Jay Townley just entered his 60th consecutive year in the bicycle industry in 2017 having began his career as an employee in a bike shop in 1957. Townley is currently partner and co-founder of The Gluskin Townley Group and also co-founder of Future Velo.
Bike Fitting Becky Puritz of BicycleSPACE, Adams Morgan, Washington DC
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