Leftovers

Only One Customer A Bike Shop Should Care About. Seriously.

When trying to understand who the customer is, I believe there are only three people who could walk into a independent bike retailer. These three customers are not determined by their locality, age, gender, or any other demographic. They are:

Customer 1: Cyclists in your market who have purchased from you before.

Customer 2: Cyclists in your market who have not purchased from you.

Customer 3: People in your market who are not cyclists.

So when building a marketing plan, choosing product selection, or designing the customer experience- who should a retailer focus on? Customers 2 and 3 will take a lot of time, a lot of money, and have a very little return. Instead, I believe they should focus on the people who have already made a purchase, they are the biggest potential growth opportunity.

Thanks for taking the time to read this. If you found value in this piece would you please consider sharing it on social? Thanks again. Donny

One Law Bike Shops Don't Have To Obey

In 1931 William J. Reilly wrote the Law of Retail Gravitation. He determined that larger cities will have larger spheres of influence than smaller ones. Meaning that the larger the city, the father people would travel to reach it in order to buy their goods. In an era when retail was at its infancy the law made perfect sense. It even led to one of the most popular phrases in retail which you can still hear uttered today, “Retail is all about location, location, location.”

In today's retail world there are no city limits. We can purchase a bike from the UK just as easily as we could purchase it from Australia or China or wherever. Which means it is time to update the Law of Retail Gravitation. Instead of saying the larger the city the greater the pull, I will instead say the better the retailer can connect with the customer the greater the pull.

Thanks for taking the time to read this. If you found value in this piece would you please consider sharing it on social? Thanks again. Donny

How Many Bike Shops Serve Beer? You Might Be Surprised.

Many bike shops are expanding beyond the sale and repair of a bicycles. Doing this brings customers in the door when they may not need anything cycling specific.

For a bike retailer, selling a bike is a macro-conversion. But in the US 12% of bike shops have coffee bars, 11% offer spinning classes and almost 5% serve beer. About 1% offer massages, yoga or full-service restaurants. When these shops sell these things they are micro-conversions.

A business can no longer live on macro-conversions alone. Selling items that have a lower price point and are purchased more often are the micro-conversions that bike retailers need to thrive.

Thanks for taking the time to read this. If you found value in this piece would you please consider sharing it on social? Thanks again. Donny

This Is The Opposite Of Showrooming

A customer walks into your store, researches a product, and buys it somewhere else. This is called "showrooming". The opposite is when they find the product online and are inspired to visit your store. The term for this action is "webrooming". Click-&-Collect is the most popular form of webrooming, where a customer purchases the product online but picks up in the store. 35% of Home Depot's online sales are Click-&-Collect.

How does your web and social presence inspire people to visit?

Thanks for taking the time to read this. If you found value in this piece would you please consider sharing it on social? Thanks again. Donny

Which Products Bike Shops Should Worry About. You'll Thank Me Later.

So many retailers struggle with what to order and when to have it in stock. Here is a simple trick to help retailers understand what really moves their business forward.

The Pareto Principle, or the 80/20 Rule, teaches us that 80% of our results come from 20% of the effort. For example, 80% of profit will come from 20% of the products offered. 80% of a technician’s time is spent on 20% of the services offered. Even 80% of sales are attributed to 20% of the staff. The percentages may not always be as clear cut as 80/20 but the idea that a large percentage of results come from a small percentage of work holds true.

Before retailers place an order it is a healthy exercise to run a Pareto analysis of the products they sell. This will help determine where to place focus.

Here is a Pareto analysis that was performed for a bike retailer. It shows that nearly 83% of their profit comes from 4 of the 12 bicycle categories they sell. They earned the bulk of their money, $152,895 dollars, from the sale of 555 bikes and building and extra 189 bikes only brought in $32,016.

Here is a tutorial on how to perform a Pareto analysis of your own.

Thanks for taking the time to read this far. If you found value in this piece would you please consider sharing it on social? Thanks again. Donny

200 Bike Shops Will Close & Other Predictions for 2014

I thought I'd take a crack at making some predictions for the year. 5 predictions for bike retail, and 5 predictions for the world of retail. In no particular order, here you go.

IN BIKE RETAIL

More bike retailers will move to click-&-collect.
Truly competing with online sales means competing online. Retailers will thoroughly build out their click-&-collect sites.

More bike retailers will become manufacturers.
Apparel and small hardgoods will be the first to be made by the local retailer. Once the retailer becomes the manufacturer, they will no longer be limited by MSRPs or territories.

Bike retailers will experiment with pop-ups.
Instead of waiting inside the brick and mortar, more retailers will open 1-2 day stores where cyclists congregate. Coffee shops, gyms, and trailheads will be the starting points.

200 bike retailers will close.
As some retailers grow, they are not growing the number of cyclists at the same rate. Only way they grow then is through market share.

A major cycling brand will go direct.
One of the top 10 cycling brands in the country will cut out the retailer network entirely. Instead selling direct to the rider.

IN ALL RETAIL

Stores will be open on Thanksgiving Day.
This is a no-brainer. For good or bad, the holiday of Black Friday is becoming more relevant than Thanksgiving. Bike retailers will still be closed though, still struggling to capitalize on the holiday.

Apple will update their in-store CX.
The customer experience at Apple is becoming antiquated. They will, again, revolutionize the way people shop. We will all say, “Why didn’t I think of that?” when they do.

FedEx and UPS will announce Sunday delivery.
With Amazon and USPS to launch delivering on Sunday, they will redefine the rules of making a delivery. UPS and FedEx will have to play catch up.

Showrooming will be encouraged.
Retailers are understanding that showrooming is not the death of a sale. They will promote it in store knowing that what the customer finds will match what they have.

Ship-to-store will grow.
Too many UPS packages were late or stolen this year. Customers will opt to ship to the store (or a UPS/FedEx location) giving retailers another chance to convert.

Thanks for taking the time to read this far. If you found value in this piece would you please consider sharing it on social? Thanks again. Donny

Should Bike Shops Be Selling Men's Underwear?

The world of bike retail is changing, and changing drastically. Is there anything off limits for a bike retailer?

Twenty years from now we will look back upon this decade and we'll have a name for it. Much like we named the Industrial Revolution. We will point to this time and say, "That's when it all changed." In the world of retail the way it is changing is from the merger of manufacturers and retailers. The traditional model of manufacturer to distributor to retailer to customer is dying and in many places is already dead. From now on it will be simply, manufacturer to customer.

Many would look at Target, Wal-Mart, or their neighborhood grocery store as the traditional definition of a retailer. They bring in products made by other people and sell them to consumers. Though when looking closer we realize that more than 50% of what Target and Wal-Mart sell, they manufacture. Every grocery store has their own brand of items. Even Amazon, the world's largest retailer, is a manufacturer of electronic goods, kitchen supplies, books, and much more.

What does this mean for the independent bicycle retailer? It means, more than ever, they should start looking to create products of their own. Controlling the entire value chain. Right now nearly every bike retailer is the owner (or manufacturer) of the services they sell. Going forward they will begin to own their apparel, the shoes, the nutrition, and possibly even the bikes.

Some retailers will even expand beyond tradition and start selling items we never expected, but with a brilliant cycling twist. Look Mum No Hands in London sells their own band of men's underwear for example.

What is the next product you really want to own?

Thanks for taking the time to read this far. If you found value in this piece would you please consider sharing it on social? Thanks again. Donny

Want To Be A Bike Mechanic? You Might Want To Avoid This State.

People don't usually work in bike shops for the money, but this is ridiculous. Here are the highest and lowest paying states for bike mechanics.

According to Salary.com the median annual salary for a bike technician in the United States is $22,337 (The website refers to bike technicians as "bicycle repairers". I know, it’s horrible.) Compare the bike technicians’ salary to $24,274, the median salary for someone who repairs shoes, $25,188 for janitors, or $29,962 for a groundskeeper or gardener. While I do not intend to demean those other professions I do want to point out that a bike technician’s skill set is just as varied, if not more so.

When breaking down the median salary by state, California was the leader, followed by New York and New Jersey. Alabama, West Virginia, and Mississippi take the last three spots respectively.

1. California: $26,983 (San Francisco)
2. New York: $26,045 (New York)
3. New Jersey: $25,509 (Trenton)
4. Alaska: $25,285 (Anchorage)
5. Hawaii: $24,548 (Honolulu)
6. Delaware: $24,436 (Wilmington)
7. Massachusetts: $24,392 (Boston)
8. Washington: $24,101 (Seattle)
9. Connecticut: $23,856 (Hartford)
10. New Hampshire: $23,565 (Nashua)
11. Illinois: $23,431 (Chicago)
12. Michigan: $23,409 (Ann Arbor)
13. Rhode Island: $23,186 (Providence)
14. Maryland: $23,074 (Baltimore)
15. Pennsylvania: $23,007 (Philadelphia)
16. Oregon: $22,828 (Portland)
17. Maine: $22,806 (Portland)
18. Ohio: $22,694 (Cleveland)
19. Louisiana: $22,627 (New Orleans)
20. Colorado: $22,381 (Boulder)
21. Minnesota: $22,337 (Minneapolis-St. Paul)
22. Virginia: $22,314 (Richmond)
23. Georgia: $22,158 (Atlanta)
24. Arizona: $22,158 (Phoenix)
25. Florida: $21,912 (Miami)
26. Nevada: $21,912 (Las Vegas)
27. Indiana: $21,823 (Indianapolis)
28. Missouri: $21,756 (Kansas City)
29. Texas: $21,644 (Austin)
30. Idaho: $21,622 (Boise)
31. Kansas: $21,510 (Wichita)
32. Vermont: $21,399 (Burlington)
33. Utah: $21,332 (Salt Lake City)
34. Kentucky: $21,265 (Lexington)
35. Iowa: $21,198 (Des Moines)
36. Oklahoma: $21,153 (Tulsa)
37. Nebraska: $20,907 (Omaha)
38. North Carolina: $20,863 (Fayetteville)
39. New Mexico: $20,684 (Albuquerque)
40. Wisconsin: $20,550 (Madison)
41. South Carolina: $20,527 (Columbia)
42. North Dakota: $20,103 (Bismarck)
43. South Dakota: $20,014 (Rapid City)
44. Tennessee: $19,924 (Chattanooga)
45. Arkansas: $19,880 (Little Rock)
46. Montana: $19,768 (Billings)
47. Wyoming: $19,701 (Casper)
48. Alabama: $19,634 (Montgomery)
49. West Virginia: $19,433 (Charleston)
50. Mississippi: $18,450 (Jackson)

The sample city I researched is in parenthesis.

Where do you stand on the list? Do these numbers seem right or is Salary.com way off the mark?

Thanks for taking the time to read this far. If you found value in this piece would you please consider sharing it on social? Thanks again. Donny

Source: http://salary.com/

Archimedes Took a Bath Before

The best opportunities to learn are when we are perplexed, when we wonder.

Archimedes was born in 287 BC on the eastern coast of Sicily, in the city of Syracuse. He was a Greek mathematician, physicist, engineer, inventor, and astronomer. He was known for his obsessive pursuit to find the solution to nearly any problem he encountered. Among his resume of works is the Archimedes’ Screw used to pump water, a collection of enormous mirrors designed to burn ships at sea, the odometer, and systems to fire catapults more accurately. Despite the meatiness of his resume, Archimedes is most remembered for taking a bath.

King Hiero II of Sicily had commissioned a goldsmith to make a votive crown, for which the King supplied the gold. When the goldsmith returned with the crown the King was suspicious that perhaps the goldsmith used some silver in place of the gold. So King Hiero II summoned Archimedes to investigate the contents of the crown but there was a catch; Archimedes was not allowed to damage the crown in any way. So he could not simply cut the crown in half or melt it down.

Archimedes knew that to solve the problem he had to determine the density of the crown. He also knew that density was a measurement of an objects mass divided by its volume. Mass was easy for Archimedes to determine, he simply put it on a scale, afterall silver weighs less than gold. When he did this he saw that the crown’s weight was correct which meant that either the crown was entirely gold, or the goldsmith used more silver to match. To test the latter Archimedes would need to determine the volume of the crown; this was the tricky part. A crown is an irregular object. You can’t measure its sides like a box or its circumference like a sphere.

Late in the evening, while contemplating the problem Archimedes decided to take a bath and then retire for the evening. As he lowered himself into the tub he noticed that when he sat in the bath the waterline rose. The more of his body he lowered in, the more water would rise. Archimedes realized that this was the key to solving the puzzle. The displaced water was the exact volume of anything lowered into the tub.

This discovery excited Archimedes so much that he ran through the streets naked, dripping of his bath water, and shouting “eureka”, which is Greek for “I found it”. By lowering the crown in water he would be able to measure the crown’s volume compared to an equal amount of gold. Archimedes now knew the volume of the crown and concluded that the King was cheated out of his gold.

Why I love this story is because Archimedes took baths before this day. This wasn’t his first bath he had taken. He had been literally immersed in this solution thousands of times before. The question made him find the answer. The question made him realize that his bathtub was the solution.

There are times when we play the role of King Heiro II giving the opportunity to others to take the stage as Archimedes. We do this by asking questions that help people rethink their bath. Whether people are looking to triple their sales, grow their community, or just implement a simple idea; the right questions will help them see the answers that have been sitting right in front of them all along. Other times we have to play the role of Archimedes, challenged to look at what we have in a new way. Finding the solution within our own walls.

When are you King Heiro II, and when are you Archimedes?

Thanks for taking the time to read this far. If you found value in this piece would you please consider sharing it on social? Thanks again. Donny