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ANA releases new omnichannel program for IBDs

Published January 19, 2018

KENT, Wash. (BRAIN) — Late Thursday, Accell North America unveiled a new omnichannel distribution program designed to entice brick-and-mortar dealers to fulfill online bike orders, while requiring the stores to carry few — or no — ANA bikes on their sales floor. The company said the program is in line with current shopping habits and market realities and will help IBDs modernize.

Accell North America is still in a restructuring phase triggered by the collapse of its sporting goods sales channel late last year, and it's no secret that its sales through the IBD channel have declined as well.

But ANA was a bit ahead of other major U.S. brands in developing a robust online bike sales program and has learned a few things from those sales. One lesson has been that an online sales program without an IBD (or mobile service) element is far from ideal.

“We’ve learned that the IBD is an integral part,” said Larry Pizzi, the head of sales for ANA and president of its e-bike business.

While ANA offers “Ready Ride” assembly for consumers who opt to have bikes delivered directly to their house, a bike in a box isn’t the best option for all bike buyers, Pizzi said. Maybe not even for most.

“For some people, like some enthusiasts of higher end bikes who have mechanical aptitude, it’s fine. But for the most part, it doesn’t work very well. It turns into a mediocre-at-best customer experience,” Pizzi said. “It’s sort of like the Ikea experience: For some people it’s OK, but for most people that’s a dreadful experience. So yes, we need a qualified retailer in the middle, be it mobile or brick and mortar.”

That’s a problem because ANA has lost dealers in recent years as the top tier brands have locked up sales floor space. While some ANA stores have made money assembling online bikes, many have complained that online discounts have continually devalued the bikes in their inventory. Many also point to frequent restructuring chaos at the company in recent years.

So the solution had to make it worthwhile for IBDs to fulfill ANA online orders in their stores, without requiring them to carry a lot of ANA inventory.

The new program offers brick-and-mortar dealers three entry points:

Tier 1 dealers are non-stocking IBDs who agree to assemble ANA bikes sold online in exchange for an $80 assembly fee plus a small percentage of the retail sale (3 to 7 percent, depending on price, with bikes over $1,500 earning the highest percentage).

Tier 2 dealers need to stock a minimum amount of ANA bikes on their floor — about $5,000 worth — and earn 25 percent for fulfilling an online bike order. There is no need for the dealers to stock the models that are sold online, so shops could stock bread-and-butter Raleigh and Diamondback bikes while fulfilling orders for the brands’ pricier offerings.

In a move that ANA said will eliminate dealer concerns about online discounts, the company will provide “price parity” across channels. It is adopting a minimum advertised price policy that equates MSRP with MAP and which is monitored by Oris, a third-party price monitoring service. ANA said it will offer dealers a chance to buy discounted inventory before its four planned online promotions this year and will give dealers access to end-of-life product that will earn the same kind of margins as inline product.

The third program ANA is offering IBDs is the opportunity to buy a Beeline mobile service franchise. ANA owns a significant share of Beeline and the company said the combination of a mobile and brick-and-mortar business is stronger than either on its own. Beeline’s online scheduling and appointment platform can be used to efficiently schedule work in stores as well as in vans, Pizzi noted. And brick-and-mortar dealers who add a mobile component can gain new bike and P&A customers while offering a new service to their existing customers, Pizzi said.

All three offerings help retailers build relationships with customers who are shopping in news ways, the company said. “This new model positions the retailer to actually prioritize and serve today’s connected end consumer — no matter what their interest or ability level — successfully,” the company said in a statement.

Pizzi noted that many dealers are suprised when he shares ANA's online sales totals in their market. The company has invested in developing performance triathlon and carbon full suspension bikes under the Diamondback brand, in particular, and those bikes have received positive reviews from consumer media for their performance and value. Since few dealers stock the upscale offerings, most sell online. 

Pizzi has been hitting the road since November, visiting dealers around the country, often accompanied by Beeline co-founder Pete Buhl and Neil Macc, Beeline’s chief innovation and product officer.

He said that as he visited stores, the components of the new program began to jell.

“I saw that retailers are facing the same challenges all over. You go into any market and you hear the same story over and over,” he said.

“I started as an IBD myself, and I’ve really struggled to come to terms with the fact that the very business model that has brought the industry to the point it’s at today is no longer relevant. It was a huge relief to watch our new blueprint emerge over the past couple of seasons, and I cannot wait to offer this exciting way forward to IBDs across the country,” Pizzi added.

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