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Commentary: What Canyon’s U.S. presence means for consumers and bike shops

How will the German manufacturer's consumer-direct sales model affect things at the local bike shop level?

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The wait is finally over — almost. Bicycle Retailer reports that Canyon Bicycles will enter the U.S. market in early 2017, offering direct-to-consumer sales of its German-built bicycles. It’s great news for eager U.S. customers, and another daunting sign for local bike shops.

Here’s how it works: Customers who order a Canyon receive the bike almost completely built out of the box, with minimal assembly required. It’s a model that has helped Canyon become one of the biggest bike brands in Europe.

For its U.S. business, Canyon will still sell bicycles manufactured in its facility in Koblenz, Germany, however the company will warehouse additional inventory in the U.S. Canyon has plans to open a customer and technical support center. The company has yet to choose a location for these facilities.

This is a big moment for U.S. consumers who have long lusted after Canyon’s high-end bicycles, which traditionally are easy on the wallet. The news is also another example of how the U.S. bicycle market is rapidly adopting the consumer-direct model. Last year, Trek launched its own direct-to-consumer program, and Giant announced its own program earlier this year.

Both of those programs still ship bicycles to traditional brick-and-mortar shops. The Canyon model, however, cuts the bike shop completely out of the transaction. The question is what this push toward the consumer-direct model has on brick-and-mortar bike shops.

Is this the end of bike shops?

Full disclosure: I’m a bike shop guy. I’ve spent the better part of two decades working in shops and think they are an integral, if not immeasurable, part of why bicycles survive in this country at all. They are more than sales floors: They are community centers, educational opportunities, and rallying points for the cycling community.

Canyon’s entry into the U.S. market undoubtedly marks a turning point for these businesses. For years, local bike shops have feared the growth of the consumer-direct bicycle market, since it largely cuts bike shops out of the mix.

Trek and Giant both created business models that give business back to their dealers. Canyon’s model, however does not.

The alarmist opinion that I’ve heard is that the shift toward consumer-direct bicycles like Canyon marks the death of the bike shop as we know it. Canyon’s sales model has been wildly successful in other parts of the world, largely because customers are conditioned to online shopping: lower prices, convenient shopping, all from the living room couch. The sales process couldn’t be easier. How can brick-and-mortar shops ever compete with this?

In this stark scenario, more bike companies switch to consumer-direct, and eventually, nobody buys bikes at bike shops anymore. Traditional mom-and-pop bike shops simply fade away into history, like CD shops or independent hardware stores.

Could consumer-direct create opportunities for shops?

In a more optimistic scenario, the growth of consumer-direct creates business opportunities for shops. Remember the “any ol’ wrench, or proper torque wrench” issue? Imagine throngs of consumer-direct customers banging on their bikes with the wrong tools. In this scenario, the service-centric model may be the best opportunity for the independent bike shop to survive. Those bicycles will still need tune-ups well after they come out of the box, after all. Shops might gravitate toward having smaller showrooms with beefed-up service centers.

Shop employees are taking this seriously; just look at, the nascent homepage of the Professional Bicycle Mechanics Association (PBMA), a group dedicated to setting professional standards for the guys working on your bike.

Could Canyon’s model create an opportunity for shops to compete on customer service and product availability? Consumer-direct businesses compete on price and convenience, but can they make a customer happy if something goes wrong? As we all know, if you break a chain the morning of your ride, a consumer-direct business cannot compete with a local bike shop. Sure, it’s cheaper to buy on the Internet, but you’re going to have to skip your ride.

Plus, there are going to be hurdles to Canyon’s model. Already, the company says customers can expect the bike to be delivered within 2-6 weeks after the initial order — and the potential hassle of shipping. And while Canyon promises minimal assembly, the consumer will still need to pick up a wrench.

A realistic middle ground

The reality, which probably lies somewhere in the middle of those sentiments, is that the best bike shops will survive, while others will close. The best shops are often run by businesspeople who enjoy bicycles, rather than bike nuts who happen to run a business. As more and more brands go consumer-direct, an optimistic view is that consumers will see the wheat separated from the chaff: Strong shops will survive based on customer loyalty and a strong service department, not to mention online sales from a well-maintained website, while weaker shops will perish based on reluctance to adapt.

Look, I’m a bike shop guy. But I honestly can’t fault Canyon or Trek for seeing an opportunity to cut costs, make more money, and streamline sales. You also can’t fault shop owners for their anger toward a rapidly changing sales paradigm that largely excludes them.

In simple Darwinian terms: Those who don’t adapt perish. Trek and Canyon have adapted.  Bike shops need to do the same. The local bike shop has had a magical resistance to free market realities, largely based on the notion that shops are the center to the industry’s survival. That’s changing, for better or worse, and Canyon’s arrival is hastening that change.

It is vital, in my opinion, that the best shops survive. It is reality that those best shops are the ones that adapt.

Is there a solution?

OK — time to get on my soapbox.

Manufacturers, I’m talking to you. Don’t be a bully here. Yes, your bottom line matters, but remember how easy it is to build a reputation as the company that put the nail in the coffin of poor ol’ local bike shop. Next thing you know, you’re Frank Underwood pushing the local bike shop in front of the D.C. metro train. Ultimately, cycling is about more than a product. Your customers want an experience, and bike shops can provide that. Make that work to your advantage.

Bike shops, now I’m talking to you. You’re Dumbledore. Your presence is important, but in the end it’s not always central to the story. There’s a scenario in which the industry survives without many of you. Please act accordingly: Do what’s in the best interest for your business, which means realizing you are mortal. Please understand that people like you, but will continue riding bikes if you’re not around, and remember that while you will be missed if you’re gone, someone will step up if you don’t. Tradition goes a long way in the cycling world, but you cannot rely on it as the cornerstone of your business. Make your website a functional store (try Smartetailing because you quite simply don’t have time to do this yourself) and listen to what your customers want, not necessarily what you already have.

And consumers, now I’m talking to you. Stop being precious. You live in a magnificent time and have access to amazing high-tech bicycles. Support your local bike shop, even if it costs a few bucks more, because they’ll be there to get that chain link for you or fix your bent derailleur hanger (yes, the one you bent by leaning your bike on the drive-side). And understand that the reason your bike shop can’t give you a better price on that shiny new bike is because you keep buying stuff online instead of buying local.

We all have skin in this game, so we’re all responsible if suddenly there’s no such thing as customer service. And let’s be honest: It always feels better to yell at someone in person about getting the order wrong, than to someone on the phone an ocean away.

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