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Guest Editorial: Information needed

Published January 4, 2012

 

Editor's note: John Neugent owns neuvationcycling.com and a bike shop in San Luis Obispo, California. He wrote this guest editorial in response to recent articles about the Amazon Price Check app.

I must admit that it doesn't surprise me that this is a hot button for bike shops. I have both an Internet site and a brick-and-mortar retail store. The brick and mortar store requires vastly more time to make a retail sale than the online store and for someone with only a brick-and-mortar store it's easy to be disappointed by the fact that they lose sales to online retailers. But there is something missing in the equation and that is the cost of getting an online customer to the online site. It's not free. In fact, it's expensive.

A much better discussion for the industry would be to deal with the specifics of marketing for both types of stores. At the end of the day, whether or not your store is online or a brick-and-mortar retail store it's your marketing that will determine if you are successful or not because we all really have the same things to sell — bikes, parts and service. I will briefly use my experience to make my point. For my online store I spend a disproportionate amount of money in advertising (about $150,000 a year for a very small store) to generate sales. The result is that it takes less time to generate a sale but I would argue that it doesn't cost any less.

For my brick-and-mortar store I now spend nothing in advertising but rely on my top-notch customer service and attention to customer needs to generate sales. I look at time spent with the customer as my advertising. Some of it will work and some of it won't. End of story. No different than the advertising that doesn't work for my online store. If brick-and-mortar stores would embrace this concept of looking at time spent with customers as their advertising most would be happier about doing it but more importantly it would give them a tool to use in considering their overall marketing strategy rather than an axe to grind against their competition.

The industry is going through a period of change and the brick-and-mortar dealers and their suppliers are slinging as much mud at Internet retailers as possible, but they are doing so without accurate information or in most cases without any information. At the end of the day the focus needs to be on what consumers want. Not what the supply side wants. Our job, whether or not we sell online or from a brick-and-mortar store, is to deliver that and what we need to be focused on is how to provide that to customers and how to measure our performance and costs. The Internet is here to stay and so are brick and mortar stores. It's only when we get beyond the mudslinging that we can have an honest discussion of how this new retail model will really work.

 

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