Bike Industry Offers Possible Model to Help Outdoor Specialty Retailers Compete Online

Mar 7, 2012

Topics: Business, Retail

Quality Bicycle Products (QBP), the nation’s largest wholesale distributor of bicycle parts and accessories, has launched a dialog in the bicycle industry about how to best counter growing competition from online-only retailers such as Amazon.com, ChainReactioncyles.com and Wiggles.com.
 
The Minneapolis company, which distributes products from more than 500 vendors to more than 5,000 independent bike dealers, or IBDs, believes advances in local search capabilities by Google and Bing have created a more level online playing field for local retailers. In the coming year, QBP will roll out its Buy Local/Buy Now plan aimed at helping IBDs win business from consumers shopping online.

“The underlying premise of the plan is that the consumer has not really changed that much,” said Jason Gaikowski, director of sales and marketing at QBP.

“They want what they want and they want it now,” said Gaikowski, “and businesses that do a really good job of giving this to consumers succeed.

Some online retailers have excelled at fulfilling certain needs, particularly when it comes to providing competitive prices and the convenience of shopping anywhere at any time on any device. But when it comes to instant fulfillment, QBP thinks local dealers have the advantage. Moreover, Gaikowski believes consumers don’t necessarily want the lowest price, they just want to know they got a fair price.

“At QBP we believe that the local bicycle dealer still can offer consumers the most compelling total value,” he said. “Google and Microsoft may agree with us, because over last few years they have been investing billions of dollars to make local businesses more visible on the web via maps, paid advertising and organic search options to help local consumers connect with local businesses.”
 
With that in mind, QBP President Steve Flagg unveiled Buy Local/Buy Now at QBP’s annual Frostbike dealer conference last month in Minneapolis. The service will allow consumers to find local bike shops that have an item in stock for in-store pick-up or installation or to order the item from the dealers “virtual” warehouse at QBP.

Gaikowski believes that when given the option of buying from a local dealer that offers in-store pickup, trained mechanics, product expertise and connections to the local community, consumers will opt to buy locally instead of online.

In the coming months, QBP will create what Flagg calls the “plumbing” for Buy Local/Buy Now. This includes:

Online platform: QBP is working with SmartEtailing to develop an e-commerce platform that will enable dealers to display both their own in-store inventory and QBP’s warehouse inventory on the shop’s own branded web store for a fee of about $500 a month. (See related story, Equipment Vendors Pioneer Dealer-Branded B2C Platforms.)

Fulfillment/delivery: When a local dealer does not have an item in stock, QBP will pick, pack and invoice an order so that it appears as though it’s coming through the local dealer’s website. 

Local search: The platform will use search engine optimization to ensure participating dealers’ online stores show up higher in local search results produced by Google, Bing and other search engines.

Minimum Advertised Pricing (MAP): QBP will encourage an industry-wide discussion of the benefits of consistent implementation and enforcement of MAP policies, in which vendors set minimum prices at which dealers can advertise products.