Editor's note: Following the publication of the article below on Friday, many BRAIN readers chimed in in response, in the comments section on this page and on BRAIN's Facebook page. Giant USA's JT Thompson sent a letter to respond to some of the comments and clarify and correct some of his initial comments. Thompson's full letter is now posted below the original article. Raleigh also has asked that we correct the record on its distribution: contrary to Thompson's original letter, Raleigh bikes have never been sold in EMS and are no longer sold in REI. "It is truly only sold through the IBD channel," a Raleigh representative said.
NEWBURY PARK, Calif. (BRAIN) — Giant USA is calling out several of its U.S. competitors for selling outside the traditional IBD channel. In a sales letter sent to its dealers this week, John "JT" Thompson, Giant USA's executive sales director, included a chart (.pdf) that showed which of its major competitors sold consumer direct, or via sporting goods stores or online retailers.
Of the major brands, only Giant and Trek sell exclusively through brick-and-mortar retailers in the U.S., according to Thompson's chart. For example, Thompson noted that Specialized sells some products (but not complete bikes) direct to consumers from its corporate website. Thompson worked at Specialized for 15 years prior to joining Giant in 2011.
He noted that Electra, which is now owned by Trek, sells through sporting goods stores and outdoor chains like REI. Accell's Diamondback brand is also sold through sporting goods chains and on Amazon.com, while Dorel's GT brand is sold by several online retailers.
"The way I see things our channel (the IBD) is under attack. We face the mega retailers of REI, Dick's, EMS, and big box; also, direct sales and mail order. A key strategy to save our way of life is to support those who work hard to support the IBD channel," Thompson said.
"Think about it, do you support brands that support REI, Dick's, big box, direct sales, or mail order?"
"Every time an IBD buys one of these products, a portion of that profit goes to aid these alternative distribution channels at REI, Dick's, big box, direct sales, or mail order. Help your competition? Do you think that's a wise move? IBD's who support these diversified distribution strategies and brands just don't get it."
It's far from the first time that Thompson and his former employer, Specialized, have clashed publicly, revealing the sometimes-bitter fight for floor space among the top IBD suppliers in the U.S. In 2012, for example, Specialized urged some of its dealers to stop selling Giant products.
Thompson's letter to BRAIN from Monday, Oct. 6:
Dear Bicycle Retailer,
I wanted to provide some follow-up information regarding the story you posted on Friday October 3, which highlighted the email I sent the previous day to Giant USA retailers.
I’m quite pleased the industry has taken this issue on with great enthusiasm; it’s wonderful to see the independence and differing opinions posted to BRAIN’s story.
It has come to my attention there are a few select brands which have changed their distribution strategy recently, and I would like to recognize them for having the courage to do so.
· Surly changed its distribution strategy this past July to IBD only. Kudos to them for making a focused strategy; only excess inventory remains outside the IBD.
· Jamis has ended its relationship with EMS; only excess inventory remains in those stores.
· Fuji has not authorized Amazon as a reseller.
Regarding select comments posted to BRAIN that need answering:
1. My communication to our retailers was targeted to the USA market; Giant USA is 100% focused on the IBD – period!
2. Giant manufactures many of the best brands in the world; each of those brands makes an independent decision to distribute their products as they see fit – independent decisions!
3. Supply performance, consistency, and following the directives of our third-party customers is imperative for Giant’s manufacturing success; Shimano makes independent decisions.
4. All but two Giant Retail Partner stores are independently owned and operated. These businesses are IBD’s through and through. Giant helps these independent operations with signage, design, best practices, energy, and premium service. These specific IBD owners wanted to partner with Giant to make profitable retail environments. Giant USA owns 2 stores; one was a failure by an independent owner and Giant USA is in the process of revitalizing that business. The other was built in a market that had no Giant distribution. But, more importantly, this store was built so we could better understand the retail challenge. Being closer to the retail environment has brought about the following changes in Giant USA retailer benefits: Seven bikes free freight, $250 P&A free freight, early purchase rewards, annual purchase rewards, best-in-class terms, molding our staff to be the most knowledgeable of independent bike retail, and greater execution to retailer’s needs.
5. While all our retail support improvements move our service forward, nothing can surpass the innovative and leading edge product in the Giant and Liv brands: 27.5 mountain bikes, Defy/Avail on-road endurance bikes, Propel and Envie aero race bikes, and more. Giant USA is committed to helping our network of independent bicycle dealers win in the retail environment.
To all independent bicycle retailers: thank you for your dedication to your stores and developing the sport, and its lifestyle, transportation alternative, and fitness benefits. As for the discussion regarding USA distribution – it’s an important one to have and we encourage you to discuss your brand’s specific policies regarding their distribution strategy and how it impacts your store.
Be well!
John Michael Thompson, Executive Sales Director, Giant USA
