Direct to consumer (DTC) sales are a really big deal for small brands that have an online presence, but not a brick and mortar one. It’s a g
Direct to consumer (DTC) sales are a really big deal for small brands that have an online presence, but not a brick and mortar one. It’s a great way deal directly with buyers, sure, but mostly it serves to keep prices low for brands that can’t compete on volume, can’t lower their costs based on scaling up production. My favorite bike, for example, the Hudski Doggler, and my favorite wetsuit, FERAL, are brands each owned and managed by two people. If they had to sell in stores, there’d be a markup on their bikes and wetsuits, and they’d be more expensive than necessary.
Cutting out the middleman makes more profits for them, cheaper prices for us, etc.
But big brands don’t necessarily have the same incentive. They can produce at huge volumes, buying supplies at scale, keeping their manufacturing costs lower. They’re often household names, so being in stores pays off, as people know their brand and are willing to pay top dollar right there on the shop floor, including any retail markup baked into the MSRP of their bikes. Surely, however, they’re seeing the success DTC brands are having and are starting to wonder how they may benefit from that model too.
Maybe that’s what’s motivated Specialized to announce their new “Rider Direct” system, effectively a DTC model for one of the world’s biggest and most successful bike brands. It’s now live on their website.
The system offers a few ways for buyers to get their hands on a bike from the Big S:
They can order a new bike direct from Specialized’s website and have it shipped to their house mostly assembled, the way most DTC bikes are sent out now.
Or, you can order the bike and have it delivered to your house completely assembled and ready to rock, a white glove service you will pay a small fee for.
The one your local bike shop (LBS) would probably prefer is ordering it from Specialized, having the bike delivered to a LBS that is an authorized Specialized dealer, and they assemble it for you, with the shop getting only 50% of the traditional margin they’d get if you just bought a bike from the racks, but better than nothing.
The “old fashioned” methods of walking into a shop and buying a bike, or seeing a bike you want from Specialized’s website then using their dealer locator to see a LBS that has it in stock, will still be around—for now.
Specialized, like all bike brands big and small, have seen massive supply chain problems, increasing the cost of manufacturing a bike. Perhaps a DTC program will keep costs lower for consumers, though one has to expect prices will remain the same across their catalog.
Will this hurt the beleaguered brick and mortar LBS down the street? They’ve already likely realized the future of bike shops means lots of repairs and assembly of online-purchased bikes, so perhaps it won’t make much of a difference. And sure, it’s nice to have everything, bikes included, shipped right to home. But would any of us trade that convenience for the joy of hanging out in bike shops? We’ll find out how many of us would in the coming years.