• For those not familiar, this is an excellent video about the future of retailing and how physical dealers fit in. It appears that Trek is well placed with this move: https://www.youtube.com/watch?v=XCvwCcEP74Q

    • tim

      That was intense. But very interesting – great share Wade.

  • horses

    One of the reasons I buy online is that I hate visiting bike shops and want to save money; this solves neither of those problems.

    The fact that they charge you more to have parts delivered to your house is also pretty funny. It seems like they’re more interested in keeping their dealers happy than actually providing a worthwhile service to customers.

    • It’ll be interesting to see if the Trek Connect program will push prices down, since online purchases will not offer discounts. Customers almost always get a discount by playing dealers off one another (and using comparison shopping sites like BikeExchange). Fixed online prices could incentivise discounting behaviour by retailers by them competing for the sale.

    • Steel

      I think they’re trying to ensure they don’t cannibalise their dealers while providing an additional option to consumers.

      It’s a toe in the water approach.

      I suspect if you don’t like shopping in bike shops, you’re probably not a Trek customer anyway.

    • OverIt

      One of my pet peeves is a poor retail experience. I hear you on that.

      However, I think this model encourages dealers to provide good
      service as they won’t get their % if people start asking for delivery to trek
      shops further away from their “home” dealer. It would provide direct
      stats on what dealers are performing based on sales vs location of customer. In
      the end they have to keep dealers & customers happy as otherwise who will
      sell & service and then buy their bikes & accessories?

      Maybe someone with a business can confirm?, but shipping from
      warehouse to a dealer can be written off as a business “expense” but
      shipping to a customer is providing a “service” and cant be written
      off perhaps?

  • dcaspira

    Great article Wade. I guess it works for Rapha, only thing about Trek is the story of the company is still tied with Lance, I guess we’ll wait and see how they persuade us differently. BTW – just to add the conversation, interesting to note that the govt. is now open to talks in reducing the $1000 import threshold.

    • Thanks. You’ll notice that Rapha has always needed to work with retailers so people can touch and feel their product. They’ve always been careful with getting too deep in with them however. Now they’ve pulled out of all retailers and only stock at their own stores. When I interviewed the CEO of Wiggle a few years ago, he confirmed that they’re looking into physical outlets also. The main point is that retailers will always have a place. I think what Trek has done is remarkably simply and keeps the dealers happy.

      • velomonkey

        Wade, not sure who you are talking to, but I did 2 shop rides with Trek dealers. Not a single nice word came out of their mouth in regard to this announcement. Sure, some dealers might do better by not having to stock inventory – all the years I worked in the shop we made money not by selling bikes, but by selling accessories – kickstands, bottle cages, bottles, helmets – you remove the option of the dealer selling that (and this does, significantly) and dealer isn’t happy. Plus Trek said it was 80% of normal margins – you know the math used for that is as favorable for possible, ergo, most dealers will be less. “But it’s a free sale” you might say – see above – it’s not the bikes where a shop makes money.

  • Brandon Bishop

    I like companies that do things well or are at least trying to. Treks website is clean, efficient and has lots of information about their bikes, I can go to YouTube and see a video about a specific model or a Bontrager accessory. I can go to a dealer and see the bike and chat with someone who has sold them and seen them in action. However, I tend to stay away from local shops because of inept and rude employees and the fact that I can’t look up reviews and other prices while in a store, at least not as comfortably. Trek Connect gives me another option, it allows me to be an online shopper and a local shopper at the same time. I typically search for an item and then find the best price, then feel the guilt of not supporting a local shop and cycling community. Now I at least have the choice to have a bit of both the online and local world.

    • Bartoli

      That’s tough Brandon – I have an awesome LBS here in Adelaide Australia, highly competent and polite employees interested in building a long term customer relationship and word of mouth referral network. They’re a (the?) Trek dealer and, if I didn’t ride Colnago, I’d be on a Trek due to amazing range, customer support and warranty speed. Good LBS’s dedicated to evolving as the marketplace changes are here to stay and thrive! It’s bad luck your experience is so different where you’re from.

    • Blake

      I feel the exact same way. Bike shops cry poor when you mention online, but it seems many of them have never thought to ask how they could add more value to customers. Why should you live? I only get simplistic answers geared to the mass market when I ask a question, half your employees appear never to have turned a wrench and are unable to give me rudimentary product information (maybe i should ask for a blinkie and they can lead me to the rack), and I can’t trust your mechanics to replace a bottom bracket. And I’m supposed to pay full retail to help you? I learned 10x more from the internet than from that shop.

      Fortunately a new shop opened up a year ago, and i can hang out there for hours learning from four highly competent mechanics and asking questions. The internet gets a lot less business now, and my days of squinting at technical diagrams, fluff reviews, and message boards are much fewer. It’s just disappointing that so many shops believe the LBS must live because… They’re an LBS! Those shops will die whether I shop there or not. The good ones will live alongside the internet for many years.

  • Khalid Ahmed

    As someone who works in the commercial strategy of a pureplay online retailer this is a very interesting business model. One of the biggest challenges of being omnichannel is the threat of cannibalising your own business and interesting to see how Trek addresses this through TrekConnect. Will watch this space very closely.

  • Geoff

    I wonder what those Australian Trek dealers who had to give up their other brands to open Trek “concept” stores think about this? On the other hand, I can imagine what the (ex) long term Trek dealer in Melbourne’s CBD who told them to stick it is thinking.

  • Geoff

    I wonder what those Australian Trek dealers who had to give up their other brands to open Trek “concept” stores think about this? On the other hand, I can imagine what the (ex) long term Trek dealer in Melbourne’s CBD who told them to stick it is thinking.

  • Short memory

    Every time I go into a Trek store I wonder why there are no pictures up of Armstrong. They wouldn’t be where they are today without him.

    • They’re damned if they do, damned if they don’t. I’d prefer that they don’t.

      • Ghost World

        Yes. And I’ll go buy a Lemond bike instead.

    • AMK

      Wouldn’t you rather see pics of Fabian Cancellara or Emily Batty?

    • smw

      Lance Dance in your Pants Armstrong

  • Don Cafferty

    If you don’t satisfy the customer, it does not matter how you channel the product. Recently, I had poor shopping experiences at 2 local bicycle stores and excellent experience at 2 bicycle stores that are 2 hours away. The Trek model would provide commission to one of the stores that failed to follow up with my request. From my perspective, it is the customer who is more important than the “local” LBS. The Trek distribution model needs to recognize this.

    • Bike Guy

      You can choose what dealer to have the bike sent to!

    • Janet Orr

      While the customer is more important than the LBS, businesses also have to be careful about how much to allow the customer to dictate their business.

      Losing shops is a huge risk for the long-term viability of cycling. Sure there will be racing and high-end customers even if local shops disappear but that’s not enough to support an industry long-term. Golf is dealing with the same challenge. If you want to have an industry, someone has to make it available to the masses. That’s the one thing the Internet isn’t going to do.

      Customers have unprecedented power in the current marketplace and that may very well be a great thing. However, time is starting to reveal that there may be some real negative consequences of consumers placing their role as consumer above that of citizen.

  • Hugh Davis

    I guess I am just posing this as a open ended question, I am not saying I dislike or disprove of local bike stores, in fact I genuinely enjoy going into my LBS to talk to staff, purchase products and examine future purchases. But could an argument be made that as soon as a company (such as Canyon or Trek), brings the direct selling model to Australia they will have a overwhelming advantage in terms of sheer price? For example of Canyon can offer a top end road frame, raced in the World Tour, with 9070 Di2 and Zipp 404’s for significantly less than anyone else, wouldn’t that force the rest of the market to adapt? I mean I understand that personal preference plays a huge part, but value is value at the end of the day.

  • Nikita

    This is similar to what Performance Bike does already and where large retailers are probably going to move in the future. I hear a lot of people commenting on bad service they receive and have had some myself. When shops pay a meager wage to shop employees with no benefits to boot (in the US), it’s not really surprising there are so many bad customer satisfaction stories. If you want some sales talent, you generally have to pay for it. If you want them to stick around, you need to give them a reason to. Love for bikes goes only so long when you are having a hard time paying rent.

  • DJP

    I do with bikes that I do with everything else online – research on the web, physically check out the goods in a store, then shop around for best price and mostly buy online…


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