WATERLOO, Wis. (BRAIN) — Trek Bicycle will join other brands in offering a direct-to-consumer buying option after unveiling its Consumer Choice program that will provide 15% to 20% margins to the consumer's closest Partner Level retailer.
CEO John Burke held a video call with retailers to announce the program on Tuesday. BRAIN obtained a portion of the recording. Trek did not respond to BRAIN for comment Wednesday.
"There's a certain segment of the population who buys online," Burke told retailers. "They do not go to stores. They buy online. And, you know, we see it whether it's with Canyon, whether it's with Specialized, whether it's with just about any other brand — Santa Cruz — the list goes on and on. You can buy those brands online. You can't buy Trek online and have it delivered directly to you. So we're going to change that."
Trek begin a variation of click-and-collect bike sales, with fulfillment through dealers, in 2015. But this is the first time consumers can have a bike delivered directly to their home without dealer assembly.
Trekbikes.com will give a customer the option to select for an additional cost of $50 direct-to-home shipping. Trek ships the nearly fully assembled bike to the customer with tools and instructions to complete the build. The margin for bikes from $498.99 to $4,998.99 is 20%. The margins for bikes $4,999 and above is 15%.
The margin for all e-bikes is 15%.
"Now we also have these long-standing awesome relationships with retailers who have built the Trek brand in their market," said Burke, who emphasized the best way to buy a Trek is through one of its retailers. "It's a key to our success. Trek retailers in those markets have had this great relationship with Trek. ... If we sell a bike direct to a consumer, we're going to make sure that you get compensated for that, and we're going to make sure that that customer is in our ecosystem, and that that customer is in your ecosystem."
A premium home delivery option is offered, which will cost the customer $100 plus $50 for shipping. Trek ships the bike to the retailer from its inventory and processes the transaction. Retailers receive between a 35% to 25% margin plus a $100 delivery fee. According to Trek, "Premium home delivery gives you amazing opportunities for hospitality that create lifelong customers."
With in-store pickup for a bike a retailer has in stock, Locally — which processes the sale — is integrated with trekbikes.com, pulling the sale from the retailer's inventory. Trek says it will not double-ship. The retailer receives the regular margin (39% to 27%), minus a 3.5% Locally fee.
If the bike is not in stock for in-store pickup, the customer pays $50, and the bike is shipped to the retailer from Trek's inventory and Trek processes the transaction. The retailer receives a margin based on service commission. With Locally integrated, Trek won't ship a bike that a retailer already has in stock.
