Wednesday, June 9, 2010

MEDIOCRE BIKE SHOPS BEWARE!

MEC and the bicycle business

Mountain Equipment Co-op (MEC) started selling mountain climbing gear from a single store in 1971. The company has grown to become a giant in the Canadian retail market, with 13 stores and annual sales of $265 million. The company’s decision to start selling bicycles does not sit well with owners of independent bike stores. Whether it’s a dance floor or a sector of the economy, when someone else shows up to the party, slices of the pie get smaller. MEC’s decision to sell bicycles will put mediocre bike shops out of business.

I like Mountain Equipment Co-op. If I need a new back pack, I shop there. The products they offer are usually of high quality and guaranteed for life. MEC was one of the first companies to hop on the anti-plastic bag train, they donate one per cent of gross sales to causes that support the environmentand they demand that their suppliers cut excess packaging from their products. I have also shopped at their store when I needed an expert opinion on a product and was not satisfied with the answers I received from other sources.

When I want to purchase a new bike or have my existing bike fixed, I head to a reputable bike shop because they understand my needs and offer expert opinions. Bike shops that have knowledgeable staff and offer customers a good product at a reasonable price will continue to thrive. Those retailers that have survived while being mediocre will perish at the hands of discriminating consumers.

Critics of Mountain Equipment Co-op assert that the company is Wal-Mart in a green cloak and that the giant store chokes out small bike shops that are advocates of cycling and the community. I talked to an employee at a local Winnipeg bike shop and he commented that their shop contributes much more to the community than MEC’s one per cent of gross sales.

While it is true that this independent store does a lot to support the community, I think that MEC has certainly done a better job of marketing their charitable contributions and support of grass roots causes. Perhaps it is necessary for this bike shop to print flashy posters touting their commitment to the community to fully compete.

I write guidebooks for bicycle tours for a living and have dealt with many independent bike shops as well as Mountain Equipment Co-op. Mountain Equipment Co-op has been very supportive and professional; they purchased 15 of my books upfront and are now selling them in their Winnipeg store.

From independent bike shops, I have had mixed results. Some shops, like Olympia Cycle and Ski on Portage have been exemplary in their support. They sell my book and give me 100 per cent of the sale, without taking a cut, because they support local initiatives that promote cycling. Other independent stores have taken a quick glance at my book and said, “Sorry, we don’t sell that sort of thing here.”

I don’t get worked up when someone doesn’t want to do business with me, but I do scratch my head. There are no other books in competition with Manitoba by Bicycle; it encourages cycling in our province and if someone purchases a book from a bike store, it is more than likely that they will buy some gear for their next tour.

When I heard that Mountain Equipment Co-op was selling bicycles, I was initially pleased. I pictured them following their successful retail model of selling generic, high-quality products at a lower price than the competition and backing it up with good return policy. Instead, they have entered the high-end bicycle game, and are selling bikes that start at $650 on the low end and $1,400 for their top of the line bike.

From what I’ve seen, MEC is not undercutting their competitors, but selling comparable bikes at a similar price. At this price-point, MEC is going after the savvy, experienced cyclist. This consumer has likely built a relationship with their preferred bike shop and is on a first name basis with the staff. It will be difficult to pry these consumers out of their established buying patterns. MEC has done a good job of creating a community of devoted customers through their website. Log on to Mec.ca and you will find they have created a cult-like following by encouraging their customers to share stories and review products. Also, shoppers can easily browse their on-line store and have the goods delivered quickly and efficiently.

Bike shops that have been doing a good job over the past decades will have no problem competing against large retailers like MEC because they will exploit their strengths and offer to consumers what large retailers cannot. The independent retailers that succeed will be the ones that continue to evolve by carving new niches out of the market and by making their store an important part of their customers lives. The real winner in the bike industry will be the retailers that figure out how to take on stores like Wal-Mart and Canadian Tire by selling a reliable, high-quality bicycle for $200.

Steve Langston is a writer and cyclist living in Winnipeg.

No comments:

Post a Comment