From the NeugentCycling Newsletter- thought this was a good take on the Trek move and what it may bring for the industry. Time will tell.
Bicycle Retailer reported that beginning September, Trek will offer bikes for sale online. The bikes will be delivered through their current dealers who will do the assembly and get a service commission. Everyone was waiting for one of the major bike companies to do this. So now the cat is out of the bag it’s only a matter of time for the others to follow.
On the surface, I don’t see any real advantage to the consumer. They will have a bigger selection but they could have special ordered the bike through a shop anyway. Trek now controls the price so getting that special good customer deal from a shop isn’t an option.
Bike shops will make less money but will have lower overheads as they primarily become service centers. It will have a profound effect on the entire industry selling to shops because shops will sell less. If you are a Trek dealer, there’s really not much of an option. Trek by its own estimates sells 30-40% of the bikes sold in bike shops.
Trek will also quickly find out that there is no reason for their sales to increase unless they run promotions – which lower profits. Their competitors will have to do the same. This is the only possible advantage consumers could have.
One of the biggest benefits Trek will have is they will be selling directly to consumers and will have that database for promotion and marketing at a very, very low cost. Communicating a message through independent bike shops has always been a nightmare. Now they can do that directly. No need to go through bike shops or the media to communicate a message when you have everyone’s contact information.
This is, without doubt, the single biggest development in the industry since I have been in it. Let the fireworks begin.