Shimano starts to sell directly to consumers (AUS)

Shimano Sells Soft Goods Direct-to-Consumers In Oz

An interesting article in CyclingTips a couple of days ago had an interview with the folks at Shimano Australia and reported that Shimano has just started selling directly to consumers in Australia, initially only with indoor bike shoes.

This follows Shimano-owned brands Lazer (helmets) and Pearl Izumi (apparel) also being made available on a B2C basis in the USA

Why is this interesting?

Shimano specifically states that they have no intention of selling hard goods (bike components) directly to consumers. Yet, local bike shops will clearly have concerns that these are the first steps toward such an eventuality.

The benefits to Shimano selling direct are clear in that they can better control selling prices and retain a larger profit margin despite a costly and more complex order fulfilment & returns process. Superficially it’s also better for consumers as it’s likely that a single Shimano warehouse will stock every size/colour combination (SKU)…no more wasted trips to the shops only to find those red cycling shoes are not available in your colour.

However, the worry for your local bike shop will be that their challenging trading conditions will be made progressively more difficult if brands continue a drip-drip approach to deny them margins and capture the business elsewhere. But what will ultimately stop Shimano and others from such a strategy is that a dealer network is required to maintain and, to some degree sell, bikes & bike components. One end-game would be that dealer rationalisation still happens and larger dealer points could emerge to service an extended geographic area, that probably will happen in some cases but I don’t think it will become ubiquitous.

If you want the convenience of a local bike store then you/we need to act and stop buying things online. The evidence from Amazon suggests we won’t do that en masse and so bike shops need to take their retail business online too and offer competitive pricing, perhaps even running the store on a pseudo-break-even footing (for UK readers: apparently Sigma Sports makes very little money from their shop despite it seeming expensive…their profits come from the volumes they get from their online business).

Shimano?

Going back to Shimano I would expect that they will expand the breadth and scope of the soft goods (apparel) they sell both increasing the number of SKUs and the geographical reach…hard to stock products and hard to profitably serve customers.

Local(ish) dealers will be here to stay augmented by mobile services and online services.

source: CyclingTips