Last month in Las Vegas, Tom Flierl, VP of Marketing & Business Strategy at Hanson Dodge Creative, was a featured speaker at Interbike for the second year in a row. His session, “Digital Commerce: Strategies for Driving Growth for Manufacturers and IBDs,” explored how digital commerce can capture and engage consumers to increase online sales for bike manufacturers and drive traffic to independent bike dealers (IBDs).
Below, Tom answers a series of questions about the current dynamic between manufacturers and IBDs, the mistakes that must be avoided in order to thrive in a rapidly changing digital landscape, and the role he sees digital commerce playing in the future of the bicycle industry.
1. What role is digital commerce currently playing in the bicycle industry?
Currently, I see a limited role, primarily because the bicycle industry has not yet actively embraced e-commerce. However, the feedback we are getting is that consumers do want to purchase bikes online, and the consumer path to purchase certainly starts online through research. The bicycle industry will need to address this pretty rapidly.
2. How is that different from what you saw a year ago?
What I have seen is a shift in the acceptance of the fact that this is the future on behalf of independent bike dealers or IBDs. Last year, there was a lot of resistance in the room during our conversations around e-commerce and the future of the bicycle industry. This year, IBDs seem to be embracing the fact that digital is going to be part of the future of the bike industry. Digital and mobile touchpoints ultimately drive store traffic.
3. How can bicycle manufacturers and independent dealers work together to capture and engage consumers and drive growth?
From my perspective, IBDs play an absolutely crucial role in the bike industry and the experience of the consumer. Rather than worry about e-commerce putting them out of business, they ought to embrace the idea that the more bike-related information that’s available digitally, the more demand that’s going to be driven to their stores. Dealers should be focused on what they are really good at: providing an exceptional customer experience. They should be holding inventory and capturing the customer information of people who come into their store. They should leverage their strengths of immediacy, experience and community.
4. And from a manufacturer’s perspective, should they be leveraging IBDs or are they trying to cut them out of the loop?
Everything’s omni-channel these days. Two years ago, it felt like one would try to cut the other out of the loop. Nowadays, with order management systems, there’s no reason why manufacturers wouldn’t be able to sell online, allow consumers to pick up in the store and then reimburse the IBD for that purchase. This isn’t happening yet in the bike industry, but it would allow manufacturers and IBDs to be able to share inventory information and partner much more strongly.
5. What about third-party marketplaces like Amazon? How do they play into the discussion?
Brands that don’t have MAP (Minimum Advertised Price) pricing will ultimately hurt themselves and IBDs by being on Amazon. Amazon will always sell at the lowest price and consumers who are searching based on price are going to default to Amazon, not to the IBD. Of course, even with a MAP policy to protect IBDs and to prevent brand erosion, Amazon still owns the customer data, which does not benefit the IBD or brand.
6. In a time in which the digital landscape is rapidly changing, what is the biggest mistake a bike manufacturer could make?
Ignoring what’s happening, not capturing customer information and not using data to make smarter decisions. The world is only going to move faster in the next five years, and if bike manufacturers aren’t investing in an integrated strategy, playing catch up next year and the following year is not going to get any easier. Being prepared for 2020 starts in 2014.
7. What’s the biggest mistake an independent bike dealer could make?
Trying to compete online with marketplaces like Amazon by investing a lot of money in building a web presence. It would be smarter to capture customers on a local level through a local PPC strategy and a nice website that speaks to what they’re trying to do locally. IBDs should continue to focus on things like building community, holding inventory and immediacy, but with more of a digital aspect to their overall marketing plan.
8. How do you see the future of digital commerce affecting the bicycle industry? Any bold predictions?
Order management software used to be very expensive and used primarily in closed systems like big box retailers that have a large online presence and many stores. That software is now becoming cloud-based and much more affordable, and it has the ability to connect into POS systems from various independent dealers. It will allow real-time inventory to be integrated into manufacturer websites, which will only strengthen the bond between IBDs and manufacturers. Also, Google is moving toward including inventory as part of its PLA (Product Listing Ad) segment, so again, having inventory, holding inventory, connecting into other feeds is going to be crucial for the future of both the bicycle manufacturer and the IBD.
Want to discuss how your brand can get ahead? Email Tom or give us a call at 414.347.1266 to get the conversation started.