As the industry waits out COVID-19, Andy Budd, director of IBD sales at ZyroFisher, casts an eye to the future to consider how IBDs can increase store turnover and profitability by revamping their approach to P&A
Despite the well-documented concerns plaguing retail in recent years, we’re finding – drawing from a large sample of IBD feedback – that the total revenue from in-store bike shops sales is largely flat. Total sales revenue is often similar due to increasing interest in e-bikes, which command a substantially higher RRP. That heightened intrigue from consumers delivers a considerable opportunity for IBD, yet it’s not one I see shops currently capitalising on. The opportunity I’m referring to is P&A.
Historically, bike shops have been very good at add-on sales, but in recent years we’ve started seeing employees selling rides and immediately moving onto the next customer. There is a fantastic selection of product that lends itself well to e-bikes, and it’s possible that retailers are not making the most of these opportunities. To an extent, we need to go back to basics in terms of cross-selling and upselling those add-ons, be it locks, lights, helmets, shoes or pedals. All of this used to be part and parcel of buying a new bike.
Even more concerning is the resignation of certain IBDs in this regard; so much so that they’re actually scaling back on their P&A investments. These shops are not only missing out on the opportunity of increasing those sales – they’re eradicating them altogether. Such is the mindset that consumers will simply go online to purchase P&A, shops are not even asking their customers whether they need lights, locks or helmets. We’ve got to get back to pushing those things as part of the sale or, at the very least, asking the question.
Enhancing the shopping experience
IBDs are still getting customers in-store and selling approximately the same number of bikes; they simply need to harness that face-time more effectively.
This is one key area where we, as a distributor, would like to help the IBD. One strategy, for example, could be to incentivise in-store staff to sell one, two or three add-on products with a bike sale. If they don’t sell the additional item(s) on top of the bike itself, they don’t receive commission on it. There are lots of seemingly minor strategies such as this that the retailer could be thinking about.
That said, if you sell a bike and then attempt to sell lots of additional individual sales, it becomes very difficult. In my view, what retailers need to be offering are personalised bundles based on the various types of customer that come into any given store. For example, shops could offer a ‘new cyclists’ bundle which may encompass some cheaper, basic tools and accessories to help an inexperienced rider get started. Equally, shops could build three or four different ‘performance’ bundles offering a specific selection of products according to the customers cycling discipline.
I often find that bike shops are keen to get customers back in-store as often as possible, but if you’re able to help people become self-sufficient – for example, including puncture kits as part of a bundle – then when an issue does arise, the customer is grateful to the IBDs all-round service, and their overall experience and perception of the shop enhances considerably.
There are lots of other basics to ensure you’re keeping on top of. As an IBD, you’ve got to make sure you’re a great place to go and buy a product – be it bike or accessory – in the first place. Sometimes it’s just as simple as the cleanliness of the shop, or more consideration of retail science. Merchandising products and making them easier to see and to buy is key, but the most important thing is engagement with the customer.
Taking leads from others
That said, it’s encouraging to see retailers thinking differently. I spend around one week per month out on the road, visiting stores. I see hundreds of IBDs over the course of the year, and there are some really fantastic, forward-thinking retailers attempting to improve their businesses. And with those that perhaps aren’t doing quite so well on that front, it’s usually the case that they are unsure how to change, as opposed to the negative, old-fashioned idea that some retailers refuse to modernise. Looking at how other traditional types of retailers work is a great place to start.
A great quote from retail consultant Mary Portas highlighted that, no matter what shops do, there will always be those that want to shop online, and that’s an idea that we have to embrace. A percentage of people, she said, will always prefer the convenience of online irrespective of the effort physical shops go to. Equally, she noted that a similar percentage of people will always want to shop in-store because they want a real point of contact, or because they enjoy browsing. She predicted this was about a 20%-20% split, with the 60% in the middle open to buying from wherever they get the best engagement from.
If a person walks into a store and doesn’t get any acknowledgement or engagement, they might be discouraged and go elsewhere. People talk about customers walking into a shop, trying something on and then ordering online, but of course, they will if we don’t engage. Most people – if they’ve formed a connection with a shop employee and have already tried something on – will just buy it there and then if they don’t, ask them what would help them make their buying decision.
Speaking of learning from others, in the modern-day motor industry, you can take your car in for a repair and they’ll send you a text to let you know they’ve checked over your car. They may even provide a link to see what your car needs, and what the mechanic will be carrying out. This is absolutely something we can replicate in the cycle industry, and it’s just another reason for people to stay longer and come back more frequently.