ACT issues a huge, thought-provoking mission statement

There were two documents released today: an eight-point Mission Statement written by ACT’s public affairs director Andy Shrimpton of Cycle Heaven in York; and, drawing on this statement, an Annual Report written by Mark Walmsley, ex MD of Madison and now owner of Consult 2000. Both documents also went through the ACT board’s editorial filter.

THE EDITED HIGHLIGHTS

Buying groups don’t work

"During the past several years the ACT have faced the unnecessary and

divisive distraction of so called buying groups. Groups such as COBR and

Bike Force need to generate profits in order to fund management and their

ambitions. In an effort to drum up membership they have sought to negotiate

competing trading benefits to ACT, which has simply served to dilute the

negotiating power of the independent sector as a whole."

IBD sector need nurturing

"Some larger retailers may believe that being a big fish in a sizeable pond

is fine and perhaps even, that if the pond shrinks their market presence is

enhanced. What they overlook is that servicing IBD demands are not simple

or necessarily cost effective for a supplier. Over the past dozen years

suppliers have been able to invest in service to independents because market

share made the potential payback viable, but IBDs, with thousands of

different business formulae do place high demands and costs upon

distributors. Whilst overall market share remains high, these operational

challenges to their businesses can be accommodated, but should they witness

a material drop in IBD market participation as a whole, then all parties

within the sector are likely to be at risk.It is in the interests of all

IBDs that the overall market share of independents remains as buoyant and

resilient as possible.

ACT membership is cost-effective

"A limited number of small IBDs feel that they cannot afford the investment

to participate within their trade association, but the limitations upon

their resources, the benefits of information sharing, free advice &

financial negotiations make membership of ACT essential. Ultimately we are

either ‘A’ sector together and the leading one or we live or die as

individuals."

Do IBDs do enough to promote cycling?

"Do we consistently ensure that consumers get the right product to encourage

regular use, that they know how to simply maintain their bicycle, or offer

them the ongoing service in-store to keep their bicycle on the road;

introduce them to Sustrans or other local cycle routes that will encourage

regular usage, including other family members. We want to be commercial

retailers, but being a quality retailer does not negate this, on the

contrary it develops a committed and loyal customer base, something that

most retailers in the UK & Ireland would die for.

A secure financial footing is the future

"We need to increasingly invest in procurement and stock management to

become more professional and then challenge suppliers, selecting only those

for long-term partnership who can consistently offer us what we need to meet

our financed commitments."

Place greater emphasis on the workshop

"The workshop should be our centre of excellence and a major profit

generator within the business, but we have found huge disparity in the

structure and costs of workshop activity. Moving towards greater unity of

service standards and increasing profitability in this area must be a key

objective for all IBDs."

Bad apples

"Consumers reasonably expect to receive better service in independents than

mass merchants; after all we are proprietor run businesses. Bad experience

in one local bike shop can potentially transmit to lost business in another.

For this reason raising the standards across the board and being truly

confident to promote ourselves as customer focussed businesses is critical.

Only by embracing all independents can we expect to influence the sector as

a whole, impacting upon consumer perceptions."

The trade needs more women employees

"Currently only 15% of members staff are female with an average age of c34,

yet females make up 50% of our potential customer base and when it comes to

high-ticket items, like a bicycle, especially when it is a family purchase,

the wife/mother is fundamental to the buying decision. The corporates

participation of female staff may not be significantly better, but the

corporate retail image and their environments are similar to those that

women are used to. We cannot be surprised if they err towards such retail

chains as with the majority of their purchases, but it is time that we

challenged for this business via relevant investments in our own."

Want to make a small fortune in the bike trade? Start with a large one.

"What interests people in this trade is bikes and cycling. And what really

excites a lot of highly motivated dealers is a wider vision of bikes and

cycling, as in what it "promises . for the future of individuals, society

and the planet as a whole." It is our duty to embrace these themes and to

represent the higher aspirations of our membership. In the past have we

concentrated too much on bread and butter issues contributing to our dowdy

and conservative image."

The future is up to IBDs

"Those of us who want to see the emergence of a broad based cycle culture in

these isles have to contend with the fact that there are few committed

corporate players to create markets for cycle products on a grand scale.

Such an absence makes the independent a key agent in developing cycle

culture. This is great for us, but it also puts a great deal of

responsibility upon our shoulders both as individual retailers and as a

trade organisation. As the primary focus for a fragmented retail sector

the ACT want to work with members to be more proactive in this area. We

want to take the lead in making a much stronger case for cycling on behalf

of IBDs; and cajole our membership, reminding them of their role in the

larger scheme of things. One major initiative already being discussed for

next year is a National IBD Retail Promotion planned to commence at the

start of National Bicycle Week. What better time than when the Government

is actually willing to invest in the promotion of cycling to the consumer?

We will of course, also be looking to the trade press to help drum up the

support and offer advice on the best methodology to mount a very commercial

retail promotion. That will not only get peak trading off with a bang, but

will allow IBDs to directly increase the number of bums on seats and their

future local customer base."

ACT HQ needs a full-time, paid director

"There is an over dependence upon Anne Killick, due in part to the lack of

investment in resources over previous years, but Anne cannot go on forever

and with her potential retirement coming into sight it would be

irresponsible of the Board not to take action now for that inevitable

eventuality..Through the appointment of a General Manager and the right team

there will be less need for consultants and funds will be invested in

permanent staff dedicated to the long-term development of IBDs."

Those are the highlights, here’s the full report:

ACT Annual Report

SEPTEMBER 2002

Introduction

ACT is often viewed as a small group of voluntary workers with good

intentions, but limited in their influence. Whereas in truth ACT is THE

umbrella organisation for Independent Bicycle Dealers (IBDs) throughout the

UK and Ireland and as such it is what the members make it. For ‘ACT’ read

‘IBD’.

ACT exists to serve the best interests of the independent sector as a whole.

Members are dealers who recognise that power sharing can only benefit

longevity and that a small annual financial contribution – comparable to the

income derived from one entry price premium bicycle – is essential to the

provision of the resources needed to achieve something through our shared

market presence.

The ACT Board is made up of bicycle dealers who are willing to invest time,

without remuneration to oversee the strategies, services and investment of

the funds generated through the Association. The Board is open to any

members, but few have historically been willing or able to commit the time

to help manage the needs of the sector. The nature of the membership

itself makes ACT particularly challenging to manage. IBDs are diverse in

their product offering, retail formulae, presentation to the market and, of

course, in their make-up. Being an Independent is about the people in the

business and as individuals we all have different objectives and methods of

achieving them. For this reason it is impossible to fulfil the aims of every

member and we must therefore take ongoing responsibility for our own special

needs whilst striving together, to achieve shared goals.

It is time the often-held myth that ACT members are ‘smaller’ dealers was

dispelled.

The average turnover of an ACT member is in excess of £335,000, more than

double the mean turnover of the 1500 dedicated Independent Bicycle Dealers

in UK and Ireland and several times greater than the average turnover of the

c2500 independent retailers involved in the bicycle market.

ACT is clearly representative of the IBD sector and in considering the

future, the first task was to define our core objectives, so that we might

direct our unified power to pro-actively drive forward and not simply react

to the unusual pressures of our industry or the whims of a minority. ACT

has commenced this focusing of our efforts by publishing a statement of our

‘reason for being’, as laid out on the front cover of this report.

ACT stands for:

ACT

The Association of Cycle Traders is a non-profit making organisation,

representing the interests of c2500 Independent Bicycle Dealers (I.B.D.s)

throughout the United Kingdom & Ireland.

During the past several years the ACT have faced the unnecessary and

divisive distraction of so called buying groups. Groups such as COBR and

Bike Force need to generate profits in order to fund management and their

ambitions. In an effort to drum up membership they have sought to negotiate

competing trading benefits to ACT, which has simply served to dilute the

negotiating power of the independent sector as a whole. Their focus has too

often been on negotiated buying, something that our market – having

polarised dramatically over the past 5 years, to a core supplier base –

simply does not require. Dealers can and in the eyes of suppliers have to,

make their own buying arrangements based upon levels of commitment that we

can each individually deliver, both with regard to purchasing and payment.

Buying from a nominated supplier, who may simply be participating in an

effort to widen their own dealer base or have offered the group a kickback

on volume, is not a sound basis for an IBD to build business upon. The

introduction of buying groups harmed ACT in ways other than dilution and

distraction. We quickly saw plagiarism of ideas initiated via ACT and we

therefore became reticent to openly promote our own activities for fear of

being ‘gazumped’. The openness of this report indicates our confidence that

with your support, we are on the right track and the lack of need for buying

groups is now evident to the great majority of the industry as a whole.

ACT is non-profit making, committed to re-investing in the sector, but that

has not consistently been the case. Historically administrations have ended

their terms with surpluses, it became an inherited sign that a board had

‘performed’ and continually limited by resources, ACT boards have fallen

into a habit of under-investment that ultimately satisfies the balance

sheet, but not the industry. Over time this has lead to a perception of

inactivity and although greatly exaggerated beyond the reality, it has lead

some IBDs to be sceptical about participation in the Association. This has

now come to an end; it is time for us to strongly promote the active

participation of 2500 independents to develop our sector together, our

profitability, longevity and even enjoyment. Profitability, development and

achievement are all key ingredients in enjoying work and we have to strive

to attain this by investing in the continual improvement of our businesses.

ACT stands for Independence

In an increasingly corporate world ACT represents the interests of

specialist bicycle retailers. It is our aim to protect & develop the market

share of service driven independent dealers within the cycle trade.

Every year the market participation of independent retailers in general

reduces and with it so does consumer choice. IBDs have proven more

resilient than most independents and unlike many industries; there is a

single dominant corporate that serves to keep many others at bay, preferring

margin building to extensive discount retailing. IBD profitability however,

remains disappointing. Average turnover levels remain well below where they

need to be for sustainable growth through re-investment, mean

IBD turnover is only c25% of the average Halfords bicycle department. 60%+

of IBDs are funding shared management – at least 2 partners/directors –

overhead and drawings demands remain high. IBDs still contribute 48% of

market turnover – Halfords 30%, Catalogue Retailers 8% and Other Retailers

14%.

This is the fundamental reason why IBDs must work together, pooling shared

market power for commercial gain whilst we retain this position. Some

larger retailers may believe that being a big fish in a sizeable pond is

fine and perhaps even, that if the pond shrinks their market presence is

enhanced. What they overlook is that servicing IBD demands are not simple

or necessarily cost effective for a supplier. Over the past dozen years

suppliers have been able to invest in service to independents because market

share made the potential payback viable, but IBDs, with thousands of

different business formulae do place high demands and costs upon

distributors. Whilst overall market share remains high, these operational

challenges to their businesses can be accommodated, but should they witness

a material drop in IBD market participation as a whole, then all parties

within the sector are likely to be at risk. It will become more viable, if

not essential for suppliers to adapt their operations to suit the needs of

particular corporate retailers, endeavouring to strike new relationships to

protect future volumes and their own longevity. It is not about personal

choice of supply management it is purely market economics. It is in the

interests of all IBDs that the overall market share of independents remains

as buoyant and resilient as possible.

A limited number of small IBDs feel that they cannot afford the investment

to participate within their trade association, but the limitations upon

their resources, the benefits of information sharing, free advice &

financial negotiations make membership of ACT essential. Ultimately we are

either ‘A’ sector together and the leading one or we live or die as

individuals. Independence means individuality, not that you have to be

alone.

ACT stands for Diversity

We are proud of the fact that our membership is not homogenous. Large or

small; urban or rural; sports or utility; cutting edge or traditional, ACT

seeks to reflect all the cultures of contemporary cycle retailing in the UK

& Ireland.

Ultimately individuality comes through people, but so much of it is

transferred to the consumer through width of product offering. Corporates

are simply not able to cater effectively and commercially for regional

demands, but it is also the expectation of the consumer that independents

will specialise and lead a market. If retailing becomes too formulaic then

differentiation will quickly fall only to price. Specialisation of service

and offering not only fulfils individual personal desires and skills, it is

in itself a unique selling proposition, a reason for being and a method

through which to profit.

For the trade association it is a challenge, promoting a network of

retailers that each offers something different, but throughout, it a core of

service and care for consumer needs. We must never stifle width of choice

and flexibility, but we do need to seek an identity and level of recognition

that rewards us with increased sales and business continuity. ACT would love

to see this recognition through the word ‘IBD’ being promoted for adoption

into consumer language, a form of group recognition of what we are as an

alternative to Halfords, JJB etc. Perhaps this is a challenge that the trade

press would like to take on through their wider contacts, endorsed by ACT

and IBDs at large?

ACT stands for Quality

We share a common commitment to the development of true ‘dealerships of

quality.’ We seek to enhance an appreciation of the entire business process

and the robust development of IBD’s to compliment the needs of the supply

chain as a whole.

The perception of quality is critical in differentiating our presence on the

high street, in raising standards and unifying a key element of our shared

identity, but commitment to quality of operation goes much further. You only

have to look at profit levels on both the supply and retail sides to see

that no party is profiteering to the detriment of another. If we jointly

want to generate more margin we have to do so by being quality partners,

retailer and supplier, to improve empathy between the operations of our

businesses, generating additional profits from the supply chain itself, that

we can then reasonably expect to share in. The time has gone for

challenging suppliers on an individual basis; any supplier who does not

embrace sophisticated retailer needs will not survive, whilst IBDs who do

not sophisticate their own businesses will also be challenged.

If we can improve and unify elements of our operations we can provide

suppliers with a more commercial proposition, working together in developing

turnover, market share and profitability, ensuring that the IBD sector

remains the major influence over our industry. If we can up the ante, we

will develop the industry, no one wants to see IBDs suffer and many

providers to the trade are wholly dependent upon not only our longevity, but

also our growth. Quality management, becoming better retailers and more

commercially successful is the critical factor for each and every one of us.

We are however all different, with varying skills and reasons for being in

the industry in the first place. If we are honest, we do doubt the ‘quality

‘ of some of our IBD colleagues and what message they are giving to the

consumer at large about independent bicycle shops. Retailing is not rocket

science, but it is multi-faceted and some of us do not readily comprehend or

have any affinity with some of the multi disciplines involved, but we don’t

always know how to judge our performance or who to turn to for guidance.

The potential downside of independence is isolation and if our business is

not growing satisfactorily or we simply find ourselves unable to retain

staff, we need help before the issues become a commercial challenge to our

future. ACT sees itself as having a critical role here as a central

function that can assimilate advice from within and from professionals

outside of the industry.

For IBDs there are 5 key areas of skill needed: purchasing (stock control),

business management (including financial controls), people management and

development, technical skills (workshop), marketing & promotion. Each of us

is likely to need some help or guidance in at least one of these areas and

ACT is committed to investing in services that will assist IBDs to develop

in all. Firstly however we need to see a greater overall commitment from

IBDs to invest in their businesses, to become quality retail operations. It

is concerning that a large number of IBDs still have minimal knowledge of

how their business turnover is broken down, even between bikes, accessories

and workshop;

55% still don’t have contracts of employment for their full-time staff and a

far greater percentage don’t contract their part-time staff; the lack of

complete insurance cover, particularly with regard to cycle hire; etc etc

ACT is recognised as a leading provider of technical services in the areas

of business administration & service advice. ACT has fully embraced issues

often viewed as negatives to being in retail, in order to minimise their

impact upon your business and time. We know that many IBDs bypass

legislative demands and struggle to come to terms with the thought of any

investment in their businesses, without this how can we be confident of

presenting ourselves as a quality sector of the trade to consumers? We

believe that we as IBDs, provide greater service than corporate retailers,

but do we honestly do our best in promoting cycling alongside our product

sales? Do we consistently ensure that consumers get the right product to

encourage regular use, that they know how to simply maintain their bicycle,

or offer them the ongoing service in-store to keep their bicycle on the

road; introduce them to Sustrans or other local cycle routes that will

encourage regular usage, including other family members. We want to be

commercial retailers, but being a quality retailer does not negate this, on

the contrary it develops a committed and loyal customer base, something that

most retailers in the UK & Ireland would die for.

ACT stands for the Customer

ACT recognises for that only truly customer focussed businesses will survive

and prosper in the 21st Century retail environment and we embrace excellence

in customer service as a primary goal.

Rarely do modern markets differentiate themselves through product alone,

even brand differentiation does not offer a true alternative nowadays. More

importantly, if the retailer is truly King, then the customer offering has

to come from us, not just the product. We increasingly realise that simply

saying we are customer focused and achieving customer excellence are two

very different things. As specialists we should lead the market, our power

comes from being the front-line, our strength from excelling at doing so. In

order that IBDs stay ahead ACT has an increasing role to play accessing

retail knowledge and innovation through services and professional advice for

the benefit of all.

There are 3 central elements to perceived customer service. One is obviously

the people whilst another, too often overlooked is product availability,

delivering the goods that the consumer expects efficiently. In order to

achieve this critical service factor we must seek to put our own house in

order by improving our internal financial management so that we may access

what we want when we want it. We need to increasingly invest in procurement

and stock management to become more professional and then challenge

suppliers, selecting only those for long-term partnership who can

consistently offer us what we need to meet our financed commitments.

The third element of our service perception is the workshop, as service

driven businesses there is no greater test. The workshop should be our

centre of excellence and a major profit generator within the business, but

we have found huge disparity in the structure and costs of workshop

activity. Moving towards greater unity of service standards and increasing

profitability in this area must be a key objective for all IBDs.

Consumers reasonably expect to receive ‘better service’ in independents than

mass merchants; after all we are proprietor run businesses. Bad experience

in one ‘local bike shop’ can potentially transmit to lost business in

another. For this reason raising the standards across the board and being

truly confident to promote ourselves as customer focussed businesses is

critical. Only by embracing all Independents can we expect to influence the

sector as a whole, impacting upon consumer perceptions.

ACT stands for its People

High quality service resides in the abilities and commitment of our people

acting as a team. To this end we are committed to the training and personal

development of all our people – sales and technical staff, managers and

owners.

ACT’s recent greatest achievements have been in the area of people

investment. CyTech has had an industry wide impact in raising and endorsing

mechanic quality standards. It has been embraced by the industry and is an

excellent indication as to what the trade association can achieve with the

full support of IBDs and the industry at large. In Aylesbury Training Group

(ATG) we have a partner committed to ongoing investment in the programme

plus an income stream to ACT that allows continued re-investment in training

needs on our part. The only challenges CyTech courses face at the moment

are keeping up with demand, but once the recently launched mobile training

unit has had an opportunity to prove it’s commercial viability we expect to

see more mobile units focused on a wider geographical provision of mechanic

training throughout the UK & Ireland. Our thanks go to ATG and Alan Finch

in particular for their tireless work in this area. We hope to emulate this

success in other areas of people development, but having learnt the lessons

with CyTech we hope to achieve this goal much more quickly in future.

The CyTech in-store retail sales training courses have proven exceptionally

successful for those that have opened their eyes to investing in their

people. The course programme has been developed and enhanced over the past 4

years and with the aid of sponsorship provided by Madison, the courses held

in 2002 have proved particularly successful. Course assessments enthuse

about a new vigour and confidence of participants to sell and there is an

obvious personal recognition from staff that they have been invested in,

that their management cares about them and that the experience has added a

new interest to their career in the bike trade.

One notable comment from a proprietor was ‘why haven’t I done this before?’

It is too easy to become isolated, bogged down by day to day demands,

introducing an outsider into your business can be a difficult task to

grapple with, but via CyTech in-store training, ACT have created a

competitively priced service through an experienced provider. The whole

process has proven particularly stimulating for the businesses involved;

this applies to the management as much as anyone. The average staffing

levels of ACT members is 4.75 full time equivalents and many

owners/proprietors remain critical to the sales performance of individual

businesses, but how many proprietors have invested in their own development

over recent years?

We are all plagued by the challenges of retaining staff and small businesses

regularly lose 25% of skilled employees to big business. Too few of us have

effective commission schemes for our employees, never mind pensions,

standard benefits, or even contracts of employment. We are regularly forced

to recruit replacement staff that don’t honestly meet our ideals, at pay

rates that are well in excess of our ideals. Why is it so difficult for us

to come to terms with recruiting raw talent at competitive rates and

investing in their development whilst within our businesses? The external

support is available via ACT and all proprietors need to be enthused about

internal people development. In order to underwrite continued growth in

this critical area, ACT have entered into an arrangement with Colin Rees –

who has been responsible for the development of the present programme – to

replicate the achievements of ATG on a national basis in-store, initially

focused upon retail sales, but gradually embracing the wider needs for

retail training. Course extension is wholly dependent upon greater

commitment from the IBD sector to invest in areas of retail specialisation

in-house. The courses are competitively priced and Madison will fund 50% of

one course per dealer – for ACT members and Madison customers – until the

end of 2002. Funding is also often available via your local Business Link.

We can confidently state that several retailers have reported seeing the

value in hard cash, via converted sales that were not happening before the

training, sometimes even before the trainer has left the shop!

We need to see greater and consistent investment in our people. We want to

see a greater contingent of female staff within IBDs. Currently only 15% of

members staff are female with an average age of c34, yet females make up 50%

of our potential customer base and when it comes to high-ticket items, like

a bicycle, especially when it is a family purchase, the wife/mother is

fundamental to the buying decision. The corporates participation of female

staff may not be significantly better, but the corporate retail image and

their environments are similar to those that women are used to. We cannot

be surprised if they err towards such retail chains as with the majority of

their purchases, but it is time that we challenged for this business via

relevant investments in our own.

ACT want to actively encourage the involvement of retail staff in the

Association, what better way to make them part of their industry than

encouraging their involvement in decision making and contributing to our

future. We would ask all IBDs to ensure that your staff access our

communications and website, encourage their contribution and listen to their

views. Our power comes via our people to ignore their involvement is

negating our greatest asset.

ACT stands for Unity

ACT acts as the public face and a single voice for Independent Bicycle

Dealers. We represent the independent retail sector in dealings across a

diverse range of issues with a variety of other bodies including suppliers,

cycling organisations, the media, local and national government, the EC and

the public.

60% of IBDs are affiliated to other organisations, most notably the Chamber

of Commerce, the Federation of Small Businesses, CTC and Sustrans. ACT

recognises that in all that we are striving to achieve we need to play an

active part with these organisations and many others. We have to keep in

touch, use the influence we have as a unit in protecting our best interests,

be proactive in effecting change, particularly where legislative, before it

impacts upon IBDs in any negative form. No one else looks after the

interests of the IBD in these forums and as the influence of Europe grows,

there are more battles to fight, more time to be spent attending meetings

that could ultimately impact upon UK & Irish IBDs. ACT works continuously

with ETRA to keep abreast of European issues. We retain regular involvement

with Trading Standards, BSI, the National Cycling Forum, The Marketing

Working Group of the government’s National Cycling Strategy – delivering

targets for increased cycle usage. We keep up to date with UK legislative

procedure through our support of CPAG. We were involved in the creation of

the Code of Practice for car-rack fitting, to be launched later this year by

Trading Standards. ACT have responded on behalf of all IBDs to the proposed

changes to the Pedal Cycle Safety Regulations, changes that will impact upon

the way we all display and sell bicycles. Having identified that nearly one

third of members offer a cycle hire service, ACT have embarked upon a

working operations manual for hire services, linked to an accreditation

which will be promoted to numerous potential users in order to build members

cycle hire consumer audience.

This involvement is often lengthy and demanding of the ACT, but this is the

unsung work of the Association, the housekeeping that IBDs don’t want to

concern themselves with and generally they don’t have to, thanks to ACT

fighting their corner. ACT actively work with the BA and CTC in promoting

ourselves to the consumer whilst promoting quality and profitability within

the industry. Unification of our interests and operations will make us all

more successful and profitable. We are in perpetual contact with external

providers to provide preferential services to members. The side benefit of

pooling our power is financially favourable provisions that flow directly

into bottom line profits. The list of services is extensive and as a result

of the ACT Census, we will be investigating new and improved services for

members. The 2 core services we would focus IBDs on now are:

The HSBC preferential credit card processing rates. The majority of ACT

members, unsurprisingly, now use HSBC for credit card processing, more than

3 times that of Barclays, the second largest provider. These beneficial

rates are available to all IBDs through ACT membership. The second is the

recently launched Claims Management Insurance Replacements Scheme. ACT has

addressed concerns raised in this area in the most positive way possible.

Insurance replacements have to date been handled by a few IBDs willing to

make the investment and take the risks necessary to fulfil the inherent

insurance industry demands. The new scheme exclusive to ACT, not only allows

members to fulfil insurance replacement demands, retaining their customers

throughout the process, it also allows those involved in the scheme to

promote an insurance replacement service locally, even challenging the mass

merchants for replacement business on bicycles originally purchased from

their stores. If any IBD finds it difficult to come to terms with forking

out less than £200 to support their industry sector, they can rest assured

that these 2 benefits alone will repay their annual subscription several

times over. One member reported being nearly £4000 better off from the

Claims Management service within the first 2 weeks of enrolling!

ACT stands strongly behind the new levy planned for launch in 2003. We will

play an active part in the committee deciding upon the investment of the

money raised to build the industry and will not hold back in making a strong

case for it’s use in promoting IBDs as we increasingly prove our ability to

build the industry through retailing. We recognise that as the dominant

sector of the industry we have an as yet un-harnessed strength of our own to

improve the bicycle market and we will seek whatever assistance and

partnerships necessary to achieve that goal.

ACT stands for Cycling

The wider adoption of cycling promises much for the future of individuals,

society and the planet as a whole. We are committed to raising a greater

awareness of the profound and far reaching benefits that the bicycle has to

offer.

As a trade organisation, first and foremost we represent business interests.

However, very few of us set up in business purely to make a living. Most of

us are in this trade in the first place because we love bikes and cycling

and we wanted to indulge this passion. The charge is that too often our

obsession with bikes prevents us from becoming effective businesspeople,

however this need not be the case. It is said that the genius of great and

enduring business organisations lies in their ability to create a vision for

their employees the aims of which can be summed up as profit and ‘something’

. People are not motivated entirely by money or material interests alone,

but also by higher values and aspirations. Ideally, it is this something

that provides the key integrating factor, the glue that pulls together the 5

disciplines of retail business mentioned earlier. Our passion for our

product (cycling) must continue to be the driver that makes us want to

perfect these disciplines in the first place.

If we are to recruit a new generation of IBDs, we have to present a vision

that goes beyond our material interests. It is a well-proven principle of

marketing to appeal to the instinctive and the emotional being. What

interests people in this trade is bikes and cycling. And what really excites

a lot of highly motivated dealers is a wider vision of bikes and cycling, as

in what it "promises . for the future of individuals, society and the

planet as a whole." It is our duty to embrace these themes and to

represent the higher aspirations of our membership. In the past have we

concentrated too much on bread and butter issues contributing to our dowdy

and conservative image.

For those of us who care about the future of cycling this responsibility

goes much further. We cannot ignore the fact that retailers themselves do

influence the growth of a market. Independent biased retail sectors do not

have the same balanced regional distribution as corporate retailers. There

is no-one planning nationally where the next shop should go, whereas

corporates, who dominate most sectors of retail, have had to carefully plan

their distribution network to fill any remaining gaps. Independents usually

set up where their personal base is, rather than re-locate to a new region.

This is not just a matter of supply of goods; it is also a matter of

culture. Those of us who want to see the emergence of a broad based cycle

culture in these isles have to contend with the fact that there are few

committed corporate players to create markets for cycle products on a grand

scale. Such an absence makes the independent a key agent in developing

cycle culture. This is great for us, but it also puts a great deal of

responsibility upon our shoulders both as individual retailers and as a

trade organisation.

As the primary focus for a fragmented retail sector the ACT want to work

with members to be more proactive in this area. We want to take the lead in

making a much stronger case for cycling on behalf of IBDs; and cajole our

membership, reminding them of their role in the larger scheme of things. A

wider vision of cycling goes further than merely the promotion of greater

usage. It should address the ways in which cycling is relevant to the

solution of many contemporary dilemmas within the realms of Health,

Transport, Culture and Community, and the Environment. In addition to

highlighting the positive and profound contribution the wider adoption of

cycling could make to society, ACT is not afraid of taking a view on the

negative consequences to society of not embracing the bicycle.

With the current absence of any large-scale corporate initiative or

government intervention, cycle culture in the UK in the immediate years to

come will continue to be an emergent bottom-up phenomenon. With a

geographically and culturally diverse network of dealers characterised by a

unique passion for their product, an expanding ACT could enjoy an influence

out of all proportion to our market share.

The Way Forward

Acknowledging the challenges and needs of the IBD sector, ACT have already

defined many short-term objectives and are presently embarking on a 3 year

plan. Some key elements have already been touched upon:

Quality management – the need to develop in-store training and development

services, extending the present retail sales training into areas of stock

control, business management, marketing and promotion, perhaps even to

incorporate a specialised NVQ qualification.

Development of the workshop as a profitable contributor to every business,

incorporating greater unification of services, profitability and of course

continued development of CyTech, until every IBD is staffed by fully

qualified personnel, a true differentiator for the sector.

A continual commitment to raising the standards and provision of negotiated

services and assistance at competitive rates, better enabling IBDs to build

profits through re-investment. Financial and commercial management are

critical to our longevity and ACT are re-examining seminars on business

planning that we hope will initiate processes of more professionally planned

business growth, just as ACT themselves are now seeking to do.

Extended co-ordination with suppliers promoting joint efficiencies through

understanding and operations.

Market research, business start-up and expansion assistance. Following the

success of this year’s census, ACT is committed to taking a leading role in

information generation and sharing within our sector. This will in turn help

us to better support growth of the IBD by directing expansion and supporting

quality new entrants to the market. We want to retain second-generation

retailers within the sector and be able to offer them not only a business

future, but also a career in retailing. This will allow us to confidently

speak for IBDs in areas of industry debate, for example the sensitive issue

of trade shows, which are mounted almost solely for our benefit. Similarly,

we want to encourage and retain good staff in general within the sector and

are committed to developing Human Resource services, benefits and full

appreciation of legislation and the rewards to business. A recently

negotiated service through LPMS, will address the documentation and advice

required for HR and Health and Safety requirements within all IBDs.

ACT is committed to retaining their leading position within technical

service provision. Much of the credit for this provision to date has to go

to the commitment of Anne Killick, not just in being there, but in

consistently investigating the demands and potential threats to IBDs,

continually updating her own personal knowledge in areas such as consumer

rights, trading standards and personnel management. Whether fully

appreciated by IBDs or not many of the elements covered here are potentially

critical to survival and it would be irresponsible of the trade association

to turn its back on this area irrespective of the shyness of IBDs to fully

embrace it. To this end we have recently launched the first in a series of

Business Health Checks, a simple self-auditing checklist to meet legislative

demands.

ACT remain focused upon the ongoing negotiation of beneficial IBD services,

but in doing so we want to see IBDs supporting and buying into these schemes

rather than simply using the ACT’s bargaining power and achievements to

re-negotiate their own deals with other providers. There is no longer the

option to pull the sector apart; we are either together or individual on

these issues.

The ACT Census identified c50% of members who buy into the great majority of

services, benefits, training etc and the remainder who decide not to share

in the benefits available and the investment in quality development. What

we now need to see is a commitment to the whole, because it benefits all

parties. ACT cares sincerely for members’ profits and longevity; we need to

build our negotiating power to full strength to benefit the sector as a

whole. A fundamental change to our approach will be a greater consumer

focus. It is evident that we remain committed to ‘raising the standards’,

but we expect this to be inherent and fast moving given the services

increasingly available. What we now want is to introduce an ever-increasing

number of consumers to a quality network of IBDs.

The ACT website will be re-released imminently under the new

‘www.act-bicycles.com’ site. The new format will not be a revolution, but it

does provide a more flexible basis upon which we can build. For 2003 we will

be encouraging suppliers to use the site for consumer reference of new

product releases, providing an onward introduction facility for consumers to

each participating supplier’s own site and in return we will be seeking

endorsement of ACT members in all supplier materials published to consumers.

We can readily help each other in this manner, cross promoting each other’s

commercial interests. We now have a partner who is helping us to develop a

new and extensive database of retailer information that will make the site

the best for consumer direction to a growing number of ACT members. We

increasingly view the website as the most effective reference point for

information gathering by consumers and dealers alike. Endorsed by the fact

that 90% of members now have internet access and an increasing number favour

e-mail as their preferred form of communication, this media will allow us

all to become more inter-active.

One major initiative already being discussed for next year is a National IBD

Retail Promotion planned to commence at the start of National Bicycle Week.

What better time than when the Government is actually willing to invest in

the promotion of cycling to the consumer? Through NBW organisers we are

seeking funding to promote IBDs throughout the local press with special

advertorials for ACT members. We will be seeking support from suppliers to

make relevant special offers and clearance items available to coincide with

the timing of the promotion. We will of course, also be looking to the

trade press to help drum up the support and offer advice on the best

methodology to mount a very commercial retail promotion. That will not only

get peak trading off with a bang, but will allow IBDs to directly increase

the number of bums on seats and their future local customer base. If IBDs

want to see promotion of their businesses on a national basis, gaining the

level of recognition that they are used to seeing the corporates achieve,

all they need do is commit to run a major promotional event commencing on

14th June 2003.

ACT are committed to embracing all IBDs, raising standards and increasingly

promoting the virtues of those who prove themselves as quality retailers,

committed to cycling. The ideas and opportunities are endless, but what we

cannot do as a sector is simply continue to talk about them, now is the time

for action, but how?

Funding and Partnership

4 years ago the ACT committed itself to the development of training for

IBDs. In order to make this happen it turned to the suppliers and at that

time Madison stepped forward with a sponsorship deal that allowed the

programme to be created, initially with regional seminars and latterly the

increasingly effective in-store programme. Although there was some furore

about the arrangement at the time, it has proven successful and extremely

commercial for IBDs. As that original arrangement runs its course at the

end of 2002, ACT are seeking sponsors from inside and outside of the

industry to help fund the ongoing development of the IBD sector. It was

evident to the suppliers attending the DDG (supplier) meetings 4 years ago

that the sector would struggle to develop without funds and investment and

those needs continue today, but the demands are now increased and the more

of us there are pulling in the same direction so it becomes a more

commercially worthwhile investment for sponsors. Without funds we will not

achieve our goals – this truly is a time for investment.

We will be seeking sponsors for the Association and various initiatives that

we will be undertaking, particularly training where, as Madison have proven

suppliers can personally invest and reward their customers in a more

beneficial long term way than simply promotional discounts. We look forward

to receiving proposals from within the industry and are already working on

external sponsorship opportunities.

ACT wish to promote mutually beneficial partnerships wherever possible. We

cannot be everything to everybody, hence relationships like that struck with

ATG, the promotional relationship we share with Bikebiz, HSBC, Claims

Management and Colin Rees Training will be built upon wherever there is a

benefit to IBDs. The most important part of fund generation however must

come via IBD sector wide support. We want to see all IBDs participating and

benefiting – individually and as a whole – via the ACT. Here the membership

themselves have to play a major part, alongside suppliers and trade press.

We are looking to members to encourage all IBDs to join the Association, so

that we may be far stronger and can together achieve our aims of raising

standards across the board. Full sector membership of ACT would generate

annual income of hundreds of thousands of pounds, accessing this sort of

funding is in our hands.

We appreciate the demands for tiered membership fees relative to turnover as

already established within many trade organisations and are committed to

move in some ways toward this structure, whilst promoting proven dealerships

of quality. We want to see all suppliers and any individuals within – as

some representatives already encouragingly do – participating as Associate

Members of ACT. Associate fees are nominal for any supplier and we propose

a lower fee rate for individual associate members, beyond the fees

themselves it shows a commitment to the sector as a whole through

participation. The more funding we raise, the more that we can achieve

through re-investment.

Achievement and Structure

Lobbying is still quoted as the main function of the: Confederation of

British Industry, British Chambers of Commerce, Institute of Directors,

Federation of Small Businesses and Forum of Private Business and although

ACT continues to recognise it’s ongoing relevance for IBDs, with the help of

industry wide support we want to achieve commercially far more now. This

means increasing our skill base and focus in other areas. In order to do so,

the Board recognise that we have to address the issue of structure. We have

stated that we no longer want to roll along showing a surplus; we now need

to invest in IBDs in line with our statement of shared objectives.

As the Chief Executive of the Institute of Directors said recently ‘ You

have to run an organisation with the same high standards that you would

adopt to run any plc’. Despite the commitment of the board members their

contribution is obviously limited by their own business interests and

demands. A decision making process that requires monthly review with the

Board before action can never be pro-active and fast moving. Investment in

consultants has proven essential to bring on board professional advice and

guidance, but ACT don’t have just a temporary requirement in this area, they

have an ongoing one in order to achieve the aims of IBDs. There is an over

dependence upon Anne Killick, due in part to the lack of investment in

resources over previous years, but Anne cannot go on forever and with her

potential retirement coming into sight it would be irresponsible of the

Board not to take action now for that inevitable eventuality.

The Board have therefore concluded that the priority for investment should

be in people, experienced people with the right skills to move the sector

forward, who can confidently invest funds in developments that will build

the sector and which will perpetuate membership, increased income and

sponsorship. A management structure that can make decisions and take action

in a pro-active manner, responsible to a pre-agreed budget and a board as

now, consisting of a President and a group – probably smaller than

currently – of non-executive directors drawn from the IBD sector. Supported

by a larger and more representative committee of IBDs who will meet

quarterly to assist development, without the sort of pressures and unwieldy

demands that currently exist.

Through the appointment of a General Manager and the right team there will

be less need for consultants and funds will be invested in permanent staff

dedicated to the long-term development of IBDs through the ACT, supported by

contracted partners such as ATG. A plan needs to be progressed that

accommodates this investment along with the forecast new initiatives and

increased income from membership and sponsorship. There are inherent risks,

if investing income into development does not ultimately increase IBD wide

support, then not only will we have together failed in building our strength

and longevity as a sector we will have reduced our resources. However, the

Board believe the time has come for action and a sustainable structure to

see it through, rather than simply re-investing surpluses at low interest

rates with the limitations to development that that entails.

Summary

ACT asks 3 things of IBDs:

1.. That you participate as fully as possible in the aims laid out in the

published statement of objectives, all that ACT wants to achieve with IBDs

developing quality, our market position and the services we provide.

2.. That you actively support and promote ACT membership to every

independent, whether friend, acquaintance or competitor, to the shared

benefit of us all.

3.. That you promote your membership and status actively throughout your

shop, with your staff and to the consumer as a ‘dealership of quality’

endorsed by ACT and all that it means.

http://www.act-bicycles.com