How consumer goods brands can learn from the bike business and its rapid shift to embrace DTC.

As the grips of the pandemic set in, we all seem to have had the same idea, to redirect those vacation funds into quality of life purchases with bicycles being high up on the list of popular upgrades.

But while this positive momentum in renewed interest was creating a massive tailwind for the bike industry, the effects of COVID would also create complete disruption of the global supply chain, derailing logistics and making it exponentially harder to fulfill this new demand.

While online shopping has become the norm across every commercial sector, the bike industry began to take notice early, addressing the need to better utilize the digital channel to reach customers more efficiently.

Defining DTC

Before we dive into the Do’s and Don'ts of DTC best practices, let’s take a moment to acknowledge that there are two general types of DTC digital environments – Digitally-Native Vertically-Integrated Brands (or DNVB) and Hybrid. DNVB is defined as the sole methodology in which to connect products and buyers together without the aid or support of the middle wholesaler and distribution layer. These brands have complete control over their brand, marketing, sales tactics, customer experience, and data.

An example of a DNVB brand in the bike business is the German-based Canyon Bicycles where e-commerce is the only way to purchase a Canyon product.

The Hybrid DTC model blends both the ability for consumers to purchase products directly online, while also having the option to have products accessible in store at the bricks and mortar retail level. The upside to a Hybrid model is that it allows a brand to engage with a broader variety of consumer types; those that are highly product educated and interested in a self-guided direct purchase, and those less product knowledgeable who require a greater level of guidance and support service offering along their purchase journey.

An example of a DTC Hybrid brand is Giant Bicycles which provides consumers with the option to purchase online (shipping direct to a Giant bricks and mortar store) or buy direct at the physical retail store.

Sometimes this Hybrid model is a factor of a legacy brand making the shift to DTC, retaining its wholesale business while beginning to sell direct-to-consumer, as it would be very difficult to make this transition immediately and cut off access to retail revenues overnight. In other cases, a digitally-native vertically-integrated brand will launch first with a direct model, and later begin to sell products through retail partners with a network of stores.

So what’s unique about DTC in the bike business?

The answer is two-fold. The first is that from a product perspective, bicycles are increasingly becoming complex machines with greater variations and styles available to customers, thus breeding a more complicated buying environment. So unless you’ve done your own research, are an experienced rider, or have an engineering degree, the DTC model may only serve a specific subset of the overall market.

The second is that bikes typically need to be built once purchased. This Build After Buy scenario requires another level of service support in the form of a mechanic to assemble the product correctly and safely before using.

So when we look to consider a DTC model of bike selling, we need to also evaluate the options in which to provide bike assembly and final delivery to the end customer.

There are two typical DTC model subsets unique to the bike business that might be relevant to other industries:

1 – Manufacturer to end user (DIY assembly)

In this DTC scenario, the bike producer sells directly to the end user, ships the product unassembled, and the end user builds the bike themselves. Once again, the ideal example of this is Canyon Bikes. This type of DTC delivery model requires a customer with significant technical knowledge and confidence and the time and interest to complete the bike buying journey.

A key engagement opportunity here is for the bike producer to provide a level of support throughout the bike building process that moves beyond the simple instructions sheet (think online on-demand access, live support, and an active community).

2 – Manufacturer to delivery partner (Bike shop assembly)

More common within the current DTC bike business model is where the producer ships the bike to an authorized assembly partner for the bike to be built. In most cases, your local Independent Bike Dealer (IBD) is tasked to accept delivery of the bike and schedule the build while meeting expectations of the customer.

The engagement opportunity here is less with the end customer and more with the IBD. One area that could be considered a responsibility of the producer is to support the bike builder with the means to deliver a best in class experience for the end customer through the appointment scheduling process (i.e. online confirmation of delivery, bike build status updates, last minute customer request notifications, and pick-up schedule confirmations).

Additional third-party assembly providers such as the mobile bike workshop brand Velofix are becoming increasingly popular as they themselves are a DTC experience within the bike repair and maintenance sector and have successfully developed a customer-centric model of service.

Keys to DTC e-commerce success

While this could easily spawn several separate articles, we wanted to highlight here a number of crucial aspects for a DTC commerce experience that will enable success when entering into this consumer selling model. One way to think about how to govern your decision making around developing these elements is by defining principles to steer actions.

Principle 1 - Customer Experience Comes First

In most cases, DTC selling is a sole pursuit for the cycling consumer. Meaning that they will be self-guided in their approach to bike product education, selection and purchase completion. With this in mind, ensure that you’ve defined the Ideal Customer Journey for each type of customer you anticipate to serve (Persona Design is also a necessity here where needs and pain points are identified and addressed).

Core Feature & Functionality Considerations:

• Location and language recognition (auto set or manual) for localized product model availability and pricing.

• Product education, guidance and selection tools (Find My Fit/Find My Ride) to quickly steer users on the right first steps of their product selection journey.

• Advanced search for those users who know exactly what they want, and need to find quickly by name.

• Progressive workflow visualization to show where the user is at in their purchase completion path.

• Confirmation alerts and error notices to highlight any steps missed and/or completed in their journey.

Principle 2 - Products Are The Star Of The Show

Seems obvious that your bike products are the essential content elements of your DTC e-commerce experience. But how you present product information can vary greatly depending on the complexity and variety of what’s available to users and their ability to either personalize or customize their selections.

Core Product Presentation Considerations:

• Highlight the key aspects of product features that are most important to the rider. Progressively display the product elements from essential to consequential. Allow the user to dive deeper into the technical and performance aspects of the product revealing more information as needed.

• When showcasing the product, present in high resolution photo detail and provide a variety of image angles that give the rider a fulsome view of the product (be mindful in mobile to scale images for faster loading).

• Provide a Comparison Tool in order to aid decision making in which product is best suited for the rider.

• Allow for Product Filtering based on a set of criteria most important to the rider’s known needs.

• Ensure real-time product inventory availability information - current and out of stock ordering times.

Principle 3 - Purchase Completion Is Only The Beginning

Based on the notion that the most valuable customer is a returning one, it’s imperative that we treat the purchase completion as really the beginning of our longer term rider relationship. What this means is that we need to plan out how we will continue to deliver value to our users “after the sale”.

Key Post Purchase Considerations:

• Institute a highly transparent production delivery tracking (and COVID issue management) system to keep users informed on the product fulfilment process. Over-communication is encouraged.

• Ensure that product warranty and return protocols are easily understood and friction free.

• Give customers an opportunity to provide their feedback on the experience; react appropriately.

• Develop an evergreen Help Centre; a space where buyers can access everything they need in one place.

Beyond One & Done

Critical to success within the DTC business model in the bike business is to look past just acquiring your “first best customers” and consider the Customer Lifetime Value measurement of success. What value as a DTC brand can you bring to the table for your current customers? There are a number of ways in which you can provide further ongoing value that deepens your current rider relationships (and may solicit additional referrals to new riders):

• Ongoing Technical Advice & Support

• Bike Maintenance Scheduling

• Ride Route Recommendations (Localized)

• Performance Coaching (Bike & Body)

• Exclusive Online Content & In-Person Experiences/Events

• Referral & Rewards Programs

• Social Community Building

If you’re looking to shift toward either a pure play or hybrid DTC e-commerce model for your bike business (or any other business sector), at Engine Digital we specialize in helping organizations move through the planning, design and delivery stages of the DTC transformation roadmap. We’ve most recently worked with bike brands such as Fox Factory Racing, Race Face and Norco Bicycles.

To find out more about what this might look like for you, feel free to reach out to us.