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Cervélo Integrates IBD in Internet Sales

Published October 12, 2010

TORONTO, Ontario (BRAIN)—Cervélo will introduce a new online sales strategy whereby its local bike dealers will fulfill orders placed on the company’s Web site.

Starting early next year the Cervélo Web site will allow customers in North America to choose and order their Cervélo of choice right there. This bike will then be delivered through their Cervélo retailer of choice. Outside of North America, Cervélo will roll out options specific to each country.

Cervélo’s 2011 and future model year products will no longer be sold online via its existing authorized Internet retailers. It had previously sold through Competitive Cyclist, R&A Cycles, All3Sports, Inside-Out Sports, Excel Sports and Nytro. Those Internet retailers with a brick and mortar store will have the option to provide in-store fulfillment.

“As Cervélo we’re taking a risk by saying goodbye to a fair chunk of business we do with our current online retailers, but we’re confident that this focus will attract more consumers to
Cervélo and that this will be good for Cervélo and for our retailers,” said Gerard Vroomen, Cervélo co-founder.

In 2011, a consumer will have two ways to order a Cervélo in North America: in their local Cervélo store or at cervelo.com, but not at individual online retailers. For orders placed online, the local retailer will then arrange delivery with the consumer, usually directly out of their stock. If the dealer doesn’t have the model in stock, Cervélo will ship the product to the dealer; it will not ship directly to the consumer.

“The program is designed as a collaboration with the retailer,” said Vroomen. “The system will be such that the fulfillment will always be handled by the Cervélo retailer, either from their own stock or from product they get from us. It is between the retailer and the consumer whether it will be in-store pickup or if the retailer is nice enough to drop it off.”

Cervélo currently has around 300 stocking retailers in North America. Vroomen expects the vast majority of those retailers to opt in to the online fulfillment program.

Vroomen said retailers will incur some transaction cost for an online sale, to cover the credit card payment fee for example. “There’s a small fee for taking those costs and that effort away from the retailer, but by and large the margin that the retailer would expect to make is there,” he said.

Vroomen said the Cervélo Web site will drive increased traffic to retailers. And, he added, the Web site will not cannibalize sales from existing IBD customers.

“It would be very rare for an online customer to already be a retail customer,” said Vroomen. “For a retailer it is an almost certain sale they get from us, and not a sale they would get otherwise. We’re bringing those unlikely customers into the store, with the store making the vast majority of the normal margin.”

To support Internet sales, Cervélo is investing heavily in customer service, doubling staff and providing continuous training on product and technical issues to educate consumers.

Vroomen said Cervélo is working with a third party on its Web site backend functionality with the goal of launching it in February. “We’re still in the middle of this process. We’re working very hard on training and setting up the structure,” said Vroomen. “Before the selling season really kicks off we’ll have this new system up.

—Megan Tompkins
mtompkins@bicycleretailer.com

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