February 12, 2016 at 10:03 am #809113
“NEWBURY PARK, Calif. (BRAIN) — Giant USA’s general manager John Thompson told Giant dealers Thursday that it will sell bicycles directly to consumers who will collect their purchases at a Giant store.
Giant Gear also will be sold online under a similar system, except the products will be drop-shipped directly to customers and Giant will handle returns without involving dealers. The local store will get 100 percent of the regular margin on the accessory purchase if they stock the product and 80 percent if they don’t.
Giant USA is rolling out a beta version of its program in March with a small group of Giant Retail Partner Stores. The company will use a platform provided by SmartEtailing. “Once we’ve refined our tools and processes, by August we plan to implement our omnichannel strategy to the entire U.S. market,” Thompson said in email sent to Giant dealers.
An outline of the program would give dealers 100 percent margin on the advertised retail price (ARP) ordered online through the Giant USA website to those dealers who normally stock the bikes that are ordered less a 2.5 percent credit card fee and any financing costs.
Dealers who have not stocked the ordered bikes in the last 12 months will receive 80 percent of the margin on the advertised retail price. Dealers would also absorb freight costs, the same as if the dealer were special ordering the bike. The dealer can combine the bike shipment with other orders to reduce freight costs.
And dealers who sell a bike online through their own Giant supported website will get the full ARP margin regardless of whether the dealer has stocked that particular series of bikes. And only Giant Race Series Retailers will be eligible to deliver orders of Giant’s top-level race models.
Giant dealers will also receive credit for sales every 48 hours. “No need to wait weeks or months for your money,” Thompson said.
Thompson urged Giant dealers to go to the G-Store home page, log in and download the PDF and to study it carefully to learn complete details of the program.
Last August Thompson told Giant dealers that the company was analyzing the success of its “Click & Connect” e-commerce program used in the United Kingdom and other countries. It has been successful in the U.K., he said. He made those comments following Trek’s announcement that it was launching its online sales program.
“The way consumers buy bikes and gear is rapidly advancing and we want our retailers to win as the environment transforms here in the U.S.,” he said. “Our Giant Web Link is 100 percent committed to helping you grow your retail store’s revenue, profits and business relevance.””February 12, 2016 at 10:58 am #809117
Does anyone know if this is the first time an online sale by the company will still contribute to the local shops bottom line. I like that they are still making it possible for the LBS to survive. Also with a 80% margin on non stock items, that seems like they’re being pretty generous and making holding inventory a lot less risky.February 12, 2016 at 11:15 am #809118
I will not profess to be a business major but this is a very interesting model as stated by @tpratt.
I guess Giant realizes that ultimately it will be the LBS who will be servicing these products down the line and as such they needs to ensure that the LBS is a) still around and b) happy to service products purchased online.
My question would be when it come to product knowledge how many people will go and kick tires at their local shop and then purchase online rather than simply the traditional order through a shop route? Assuming the shop stocks their preferred bike and size of course, will people still buy online? Will Giant be ramping up it’s demo program to meet the demands of people who don’t plan on setting foot in a shop but who would like to ‘try it before you buy it’? Just some thoughts I had.
Interesting times.February 12, 2016 at 1:06 pm #809121
My question would be when it come to product knowledge how many people will go and kick tires at their local shop and then purchase online rather than simply the traditional order through a shop route?
A very legitimate concern and likely one of the principal reasons behind the chosen model. This unfortunately happens quite a bit already with shoes and other soft goods. Guys will go to a shop to try them on, then order from MEC or Chain Reaction. And likely goto the shop they didn’t buy them from come warranty time. Mountain Biking is such a rich sport and we try to act so core but we don’t support the IBD as much as we could.
And since we’re on the topic of the bike business, Wiggle just recently bought Chain Reaction. http://www.bikebiz.com/index.php/news/read/wiggle-confirms-it-is-to-acquire-chain-reaction-cycles/019067February 16, 2016 at 7:31 am #809148
In some cases I can see this being a big help. One example is someone who doesn’t have a bike shop nearby that stocks Giant but wants one. They’d only have to make one trip to get the bike instead of two.
A few years back I wanted a specific frame, but the closest dealer to me was at Yonge and Eglinton. PITA for me to get over there, and I had to drive twice. Would have been nice to just order it and pick it up.
Re: CC and Wiggle: I’ve ordered from Wiggle once, MAYBE twice when they actually had what I wanted. Their prices were usually a little better than CRC for identical items, but they rarely had CRCs selection.
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