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Regardless of how you feel about online cycling retailers and their impact on local bike shops, there no doubt the big online stores are here, and here to stay. CyclingTips reporter Dave Everett recently visited the headquarters of one of the biggest players in the online cycling retail space, Chain Reaction Cycles (CRC), and put together this report.
I like to think I’m pretty well informed when it comes to discussions about online retailers vs local bike shops, having worked on both sides of the ‘divide’. I grew up in a small town in the north west of the UK where my Dad runs one of two independent bike shops in the town. It’s a small business that’s primarily there to service the local community, whether that be the fanatical racing guys who hang out in the back drinking coffee, eating cake and talking about the latest cycling news, or the numerous farmers who live in the area that bring old bikes in that need a a good clean and a service.
The shop’s seen big stores move in to the town — first Halfords back in the ’80s and now Evans Cycles — and these have obviously had an impact on how my dad needed to operate and keep the customer base he had built up.
For many years I balanced racing in Europe during the summer with working in the winter months at a high profile online store that was also based in my home town. My dad was friends with the owner and they’d often cycle together. Rivalry didn’t exist — there was a mutual respect, both aiming at a different market. My dad ended up talking the owner in to giving me a part-time job, a job that I felt never attempted to diminish or destroy my dad’s or any other bike shop.
This was back in 2001 when the online world was just flourishing. The business back then consisted of just three staff — myself, the boss and the manager — and we shipped out maybe 30-40 orders a day. The boss would drive to Belgium, fill a van with cheap jerseys, shorts and components and then we would place adverts in Cycling Weekly or ProCycling magazine. About 70% of the time this kit would end up in Australia.
From the early days I saw the business grow rapidly into a multi-million-pound business. I watched it go from the three of us working in a barn right through to the day it was sold to a large corporate brand.
When the chance to check out Chain Reaction Cycles’ headquarters arose while in Belfast I was extremely intrigued, on both a personal level and from a consumer angle. Unlike the online store I’d worked for, CRC started out as a standard cornerstone bike shop, no different from any number of bikes shops out there. It’s clearly come a long way since the day it first opened in 1985 — the three premises that they now operate out of must be a far cry from what the owners had in mind when they started.
The three buildings are spread across two sites. The main offices are on one site and the two huge industrial units that house everything from warehousing, inward goods, customer services and a very swish looking display shop are all on the second site. My first port of call was where all the goodies were: the main warehouse.
As you’d expect the warehouse is enormous. Racks upon racks covered the two floors, reaching from floor to ceiling, all crammed with endless amounts of cycling products. I’d worked in what I’d always classed as a large warehouse but this dwarfed it. The stock level was incredible — the number of items and the amount of stock boggled the mind. I couldn’t help but think about the sheer cost that must be out-laid to have all that gear on hand.
Usually a business likes to carry as little stock as possible, turning it over quickly and replenishing it just in time for new orders to be made. Here though the amount of items available was like I’d never seen before. There seems to be two reasons for this — they must buy huge amounts of items in bulk, thus getting the best price possible, and they must turn over an amazing amount of stock.
I figured the warehousing must be a giant headache; again I’d experienced this first hand. With a company that employs 500+ staff and a large number of these working in the warehouse, human error could result in orders being mis-picked or -packed, items going missing, and huge discrepancies in stock being created. This obviously would have a knock-on effect later with ordering and supply.
The way CRC gets around this is to have a constant rolling stocktake — a simple solution to a problem that could cost the business money and customer loyalty. I’d been used to a yearly stocktake, where you realise you either have too much of one item or don’t have stock of something you should.
The warehouse backed on to packing and shipping. Sheets of cardboard passed through a machine and after a whirl and a clunk out came a box, ready on the conveyor belt for the next order to be packed in to, taped up and shipped out. Slick and quick. I can see how CRC manages to process orders so quickly; the simple operations system they have in place is extremely efficient.
From here I was taken into customer service and relations, a long room just off the warehouse. Here sat 60 members of staff, all busying themselves, chatting to and emailing customers. A monitor sat on the wall feeding information to everyone about the customers hanging on the line, numbers ticking over letting the staff know how long customers had been waiting.
The atmosphere was friendly and upbeat, much like in the early days of where I’d worked. I got the impression that the top dogs at CRC still understand that human contact and genuine cycling knowledge is part and parcel of a successful cycling retail company.
A book of amusing and inspiring customer stories titled “Random Acts of Kindness” was hanging on the wall; stories about dogs eating Garmins, charity rides and staff going out of their way to help. This seemed a prized possession in the office — several of the staff seemed genuinely happy to be featured in the book. Alongside this was the memo of BBQs and social rides that were lined up for staff.
The shop and show room for Chain Reaction is perched on the front of the warehouse; the very clean and flash-looking building was obviously well stocked. Even though the shop is quite a way from any town — roughly 20 minutes in a car from Belfast — the shop still had several people milling about. Most looked as though they’d just stopped by on their daily training ride to take in the bike porn filling the shelves.
Amongst the kit was a wall full of the latest Vitus frames. This is CRC’s in-house brand. Originally Vitus was a French frame manufacture which sponsored many professional teams in Europe through the 1960s to 1980s. It was purchased and revived by CRC after the once-innovative frame company nearly went bust.
Today the brand is developed and designed just around the corner from the warehouse. A team consisting of engineers and frame builders has been put together to hopefully produce frames and bikes that live up to the once successful company name.
The Irish Continental team AnPost-Chain Reaction — started and run by legend of the sport Sean Kelly — is the testing ground for the Vitus brand. CRC sponsors the team not just with frames but also helps with components through the company’s many contacts.
Up until this year the engineers at Vitus had been developing frames using a standard open mould. The frame/tube shapes would have been used by several brands but each firm that uses an open mould is able to lay up the carbon sheeting to their liking. This is where the research and expertise come in to play. Different types of carbon and different lay-ups result in a bike that may look the same as others but ride completely differently. Just take the Pinarello/Chinarello situation as an example.
For this year’s Vitus models CRC has invested heavily — tens of thousands of pounds have been spent on designing and producing a mould and tooling of their own. For 2015 many of the frames are completely redesigned, from frame shape to carbon choice and lay up. This came as a surprise — any bike shop that has its own brand, featuring everthing from custom steel to rebadged Taiwanese frames, needs some recognition for forging their own path and going up against the major bike brands.
For a shop like CRC to actually invest heavily in tooling and design says a lot — they are clearly in for the long haul with a brand and investment like this. To undertake a project such as this isn’t easy and they could have quite simply carried on producing open mould designs, sticking a decal on and churning out low- to mid-level frames at a cheap and cheerful price point.
For me seeing the inner workings of CRC was an eye opener. To find out that it is still a family-owned business took the sting out of what I’d always classed as a corporate giant. At its core it’s just an extremely well-managed bike shop; a bike shop with an owner that that had the foresight to see what changes the internet was about to bring.