This past holiday season saw a record number of smartphones and tablets sold, but this has some people worried in the bicycle industry. Amazon.com has released an app that allows people to visit a brick and mortar bike shop, take up an employee’s time to be fitted, scan the bar code and immediately order the product from Amazon – presumably at a discount. In response, Mike Sinyard, President and Founder of Specialized Bicycle Components, has sent out a letter to its dealer highlighting this new app and Amazon’s plunge into the bicycle market.
Letter from Mike Sinyard (via Bicycle Retailer… stories one and two on the subject)
December 27, 2011
Dear Specialized Dealer,
Is your store a fitting station for your online competition?
Amazon.com recently launched a free app called Price Check that allows consumers to use brick-and-mortar shops for research, then easily buy many cycling products online right from their mobile device.
Here’s how it works: when in your shop, consumers simply scan a bar code, type in the product name or take a picture to see the product and prices from a variety of online retailers. After ensuring they have the right fit by trying on the product in your store, and talking to your staff, they can buy it from somebody else with the press of a button.
Participating brands include Pearl Izumi, Shimano, Louis Garneau, Giro, Bell, Fizik, Sidi and CatEye.
Who loses in this situation? Certainly not Amazon. And, at least in the short term, not the cycling brands selling through bike shops and Amazon. But what about you?
By buying product from brands that severely undercut you, you are supporting your competition. Why finance your own demise?
Please investigate for yourself by downloading the free Amazon app.
Amazon is clearly interested in the cycling space, and is hiring talent from the bike industry (including from Specialized).
In related news of brands that leverage the IBD while simultaneously undercutting them, Easton-Bell Sports dropped the fruitless suit it filed against Specialized before Interbike. Was this legal maneuvering just carried out for publicity?
Whether the current news is mobile device apps or lawsuits, the underlying issue remains the same: some suppliers support the IBD and some do not. For the sake of your business, examine your suppliers’ strategies and vote with your dollars. The entire bike industry is watching.
Click here to see how Amazon’s Price Check App works in store (See video below)
Thank you for your continued support.
Sincerely,
Mike Sinyard
President & Founder
Specialized Bicycle Components
Specialized’s video of a ‘customer’ using the Amazon Price Check app
Certainly visiting a retailer and writing down the product information to just order it from a catalog, online source or another retailer has been around for as long as the Sears Roebuck catalog. The Amazon Price Check app just makes it that much easier, but those shoppers still need to wait for their product to arrive.
What can bicycle retailers do to combat this new threat? Probably not much. Customers who want products from Pearl Izumi, Shimano, Louis Garneau, Giro, Bell, Fizik, Sidi and CatEye will go to another retailer who does carry products from those companies. So retailers ordering from manufacturers who sell to Amazon or an Amazon seller probably will not help much.
Sinyard making their dealers aware of this new app in order to recognize these types of customers and threat to their business will help them make better business decisions. Retailers can certainly escort these customers to the door if they observe the smartphone coming out to scan UPC codes; but that too can backfire, especially if the retailer is caught on video kicking the customer out and it goes badly. Beefing up sales customer service might help a little. Probably the best solution is to improve in the areas of the retail business that Amazon can not encroach – service.