Direct consumer sales (DTCs) are a really big deal for small brands that have an online presence, but not just one. Sure, it’s a great way to communicate directly with buyers, but it mostly serves to keep prices low for brands that can’t compete in volume, can’t reduce their costs by increasing production. My favorite bike, such as the Hudski Doggler, and my favorite wetsuit, the FERAL, are brands owned and operated by two people. If they needed to sell in stores, their bikes and wetsuits would have a markup, and they would be more expensive than necessary.
Disabling the middleman gives more profit for them, cheaper prices for us, etc.
But big brands don’t necessarily have the same incentives. They can produce in large quantities, purchase materials on a large scale, while keeping production costs lower. They often use titles, so staying in stores pays off because people know their brand and are willing to pay the highest dollars right in the store, including any retail markup laid down in the MSRP of their bikes. Sure, however, they see the success that DTC brands have, and are beginning to wonder how they can benefit from this model.
Perhaps this is what prompted Specialized to announce its new system “Rider Direct”, in fact a DTC model for one of the largest and most successful brands of bicycles in the world. It is now available on their website.
The system offers buyers several ways to get their hands on a bike from Big S:
They can order a new bike directly from the Specialized website and deliver it home mostly in assembled form, as most DTC bikes are now sent out.
Or you can order a bike and deliver it home fully assembled and ready to go, for a white glove service for which you pay a small fee.
Your local bike shop (LBS) will probably prefer it – order it at Specialized if the bike is delivered to LBS, which is an authorized specialist dealer, and they will collect it for you, with the store only getting 50% off the traditional margin they would get if you just bought a bike from the racks, but better than nothing.
“Old-fashioned” methods go to the store and buy a bike or see the right bike on the Specialized website and then use their dealer locator to see the LBS that has it available as long as it will exist.
Specialized, like all large and small brands of bicycles, have faced massive problems in supply chains, which increases the cost of bicycle production. It is possible that the DTC program will reduce costs for consumers, although it is to be expected that prices will remain the same throughout the catalog.
Will it damage the precipitated brick and mortar LBS on the street? They’ve probably already realized that the future of bike shops means a lot of repairing and assembling bikes purchased online, so maybe it won’t matter much. And, of course, it’s nice that everyone, including bikes, is delivered straight home. But could any of us trade that convenience for the joy of hanging out in bike shops? How many of us will be, we will find out in the coming years.
Photo: Tom Austin / Unsplash