E-commerce grows, but physical stores dominate retailing

The future of retailing

The future of retailing

Internet retailing continues to grow as technology sweeps the globe, a communications and commerce revolution unprecedented in human history, big news, gets lots of attention, exciting, scary, wow.

Or, maybe not so much.

A new report from a company called Timetrade pushes back against some of the hype and e-commerce love. The report notes that physical stores dominate retailing so thoroughly that calling it a mismatch is understating the case to the point of absurdity. And while e-commerce is expected to more than double by 2020 to about $550 billion, the money spent at stores will still be nine times what is spent on-line that year.

The Timetrade report is based on in-depth survey of 1,029 consumers about their shopping patterns and motivations. While the limited sample hardly qualifies it as hard research, the report does make a number of interesting points related to on-line versus bricks-and-mortar.

Some highlights:

  • 87% of consumers say they plan to shop in physical stores in 2015 at least as often as in 2014.
  • 85% say they go into stores to “touch and feel things.”
  • 71% say they would prefer to shop in Amazon’s physical store versus Amazon.com.
  • 65% report that if an item they want is available online or in a nearby store, they prefer to shop in the store.
  • Mobile shopping is cited as a trend, but when consumers are looking to buy something, just 13% use a mobile device to do so. Most use mobile to browse, research products, compare prices, and then look for the nearest store location.
  • Nearly 90% of respondents are more likely to buy when helped by a knowledgeable staff member, and 50% value the expertise of sales associates.
  • 63% say that if an item is the same price at four different retailers, they decide where to shop based on the overall customer experience they have.
  • If a knowledgeable sales associate recommends items the customer may need based on what they know about the customer, 64% said they would leave the store much more satisfied.

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How Washington Punishes Small Business

original_signMembers of Congress like to say nice things about small businesses in this country, but the track record shows it routinely favors big corporations instead, according to a May 7 opinion piece published in the Wall Street Journal.

The article was written by Stacy Mitchell of the Institute of Local Self Reliance, with the NBDA’s Fred Clements listed as co-author. Both are involved in Advocates for Independent Business, an umbrella group of 15 associations representing independent businesses, including bike shops, book stores, toy stores, running stores, florists, hardware stores and others.

“Members of Congress love to evoke the diner and dry cleaner, the neighborhood grocer and local hardware store,” the article says. “Ensuring the well-being of Main Street, we might easily assume, is one of their central policy aims. The legislative track record tells another story.”

The article notes that since the late 1990s, the overall market share of firms with fewer than 100 employees has fallen from 33% to 28%, according to U.S. Census data. There are nearly 80,000 fewer small retailers today than in 1999.

Starting a new business also appears Continue reading

Innovate, Adapt and Prepare to Fail Forward

bikeevolutionInnovation doesn’t come naturally to human beings, according to Stephen Shapiro, author and keynote presenter at this year’s Bicycle Leadership Conference (BLC).

Referring to the work of Charles Darwin, Shapiro noted that human evolution is not driven by survival of the fittest. Instead, it’s all about adaptability, the ability to change. This has a direct parallel to business survival today.

He noted that Sears was once ten times the size of Wal Mart, but is now a shell of its former self. Pan Am was once the number one airline in the west, but failed. Howard Johnson’s restaurants were once everywhere, but not anymore. Closer to home, Schwinn went from prominence to relative obscurity.

All were once robust companies at the top of their games. They failed to adapt in various ways and for various reasons, relying on solutions that had worked in the past and being sure of their own expertise. “Expertise,” Shapiro noted, “is the enemy of innovation.” Or, in the words of Continue reading

Six Trends for Bicycle Retailers to Watch

mobileimageMobile bike repair, e-bike dealers, and private label bikes are industry trends worth watching, according to Scott Chapin, bicycle industry risk specialist with Marsh & McClennan Agency in Minneapolis.

Chapin has a unique perspective on the market as he focuses on insurance for the bicycle industry, both retail and supply side alike. Marsh & McLennan receives between five and 10 new inquiries per week from cycling-related businesses looking for insurance, many of them start-ups and potential start-ups. This gives him some useful insight on what is trending and what the future may hold for the competitive landscape for our industry.

Some of the trends from Scott’s position on the front lines of the bicycle insurance world:

1) Mobile bike shops. Chapin sees a lot more mobile bike shops starting, many run by people with great experience with independent bicycle dealers as lead mechanics. “Obviously, this can be considered a threat to the retailer Continue reading

Bike League Embraces Bike Shops

supportlocalbsIndependent bike shops are an “essential component of the bicycle infrastructure that makes a community bicycle friendly,” according to a March 9 resolution from the League of American Bicyclists.

The show of support for bike dealers was approved by the League board of directors just prior to the organization’s signature event, the annual National Bike Summit, held last week March 10-13, 2015, in Washington, D.C.

This year’s Summit featured an energetic women’s forum, a multitude of sessions focused on infrastructure and equity, and a lobbying day where attendees visited Congressional offices to make the case for bikes and bike safety.

The resolution notes “the critical importance of independent bicycle dealers in providing access to bicycles, bicycle maintenance, bicycling information, and creating a community of people riding bikes.”

It continues, “Bicycle retailers provide tremendous support Continue reading

Independents Battle Internet Competition and Rising Costs – In Many Industries


Internet competition, unfair supplier terms, high health care costs, and growing marketing expenses were the top challenges for independent businesses in 2014, according to a new survey released this month.

Results were based on completed questionnaires from 3,057 independent businesses from a number of industries including bicycle retailers, as well as those specializing in toys, books, running, inns, flowers, records, and miscellaneous others. “Independent businesses” are loosely defined as companies that are locally owned and operated.

About half of the respondents were retailers. The rest were a mix of service providers, manufacturers, farmers, banks, restaurants, and wholesalers. The 8th annual survey included 2,954 businesses in the United States, and 103 in Canada, employing a total of 39,682 people. The survey was conducted by the Institute for Local Self Reliance and Advocates for Independent Business, a group partially supported by the National Bicycle Dealers Association.

Revenue – Sales were pretty good in 2014 for most of the businesses, with average revenue growth of 8.1% being reported. As a group, retailer growth was a little less robust at 5.1%. Bike shops Continue reading

The “S”-Word: Dealers Speak Out

cogsBy many measures, Shimano is one of the bicycle industry’s great companies, consistently bringing product innovation and excellence to a willing marketplace.

But from the perspective of many independent bicycle dealers in the U.S., Shimano has become a huge problem, choking the life out of them by supporting distribution that leads to rampant Internet discounting from Europe.

Many say this makes it increasingly difficult for them to carry Shimano products without looking like price-gougers. Distributors face pressures from Shimano’s policies as well as margins are squeezed, with some even developing their own brands to compete. Bike brands also see their products de-valued as original equipment Shimano components sell elsewhere for huge discounts, the same parts on new bicycles being offered at full price.

Many dealers say they are distancing themselves from Shimano, trying hard to support other component makers, and worrying about a future that allows European retailers to sell to American consumers below dealer cost.

In a recent article in Bicycle Retailer and Industry News, Shimano American management claimed it cannot do anything to control European distribution, a part of the world that doesn’t allow MAP or MAP enforcement. Yet, other companies seem to control European distribution effectively.

The NBDA’s new Supplier Scorecard report, in which dealers rate their suppliers on various criteria, shows that Shimano finished above average in most categories except one. The company earned a C minus grade on the Commoditization Index, Continue reading