IBDS ARE LOSING CUSTOMERS WITHOUT EVEN KNOWING IT Winning In-store Begins Online CONSUMER FACTS Online and in-store are no longer discrete Online and in-store must work in harmony as a seamless experience This holistic experience is called Omnichannel 84% Shop online before or during a trip to a store 71% Expect to view in-store inventory online 39% Unlikely to visit a store if stores inventory not visible online Expect to buy online and pick up products in-store 50% Omni is a Latin prefix meaning all, hence all channels as one Consumers want to freely move into and across channels without friction throughout their purchase path OMNICHANNEL OMNICHANNEL PURCHASE PATHS Browse OnlineBuy In-Store $ Buy OnlinePick Up In-Store $ Click & Collect over 50% of REIs and Wal-Marts total online sales Browse In-StoreBuy Online $ While still in-store up to 10% of national retailers sales After leaving store often leads to buy online/pickup in-store Buy OnlineReturn In-Store $ Convenience: not having to ship returns Piece of mind: if problem can talk to local retailer Buy OnlineShip to Home $ OMNICHANNEL Its about delighting LOCAL customers Its NOT about selling stuff online to anybody, anywhere CEO INTERVIEWS (click logo to open video in web browsers) OMNICHANNEL CONSUMER FACTS Spend More (recent data from Wal-Mart) Shoppers who only buy online spend an average of $200 / year Shoppers who only buy in-store spend an average of $1,400 / year Omnichannel shoppers who buy in- store and online spend an average of $2,500 / year Want Products Quickly 2-Day delivery became normal with Amazon Prime Same-day becoming new normal consumer want immediate gratification More Likely to Buy When Referred from Brand Website to Retailer Website 2x-3x higher conversion rate than other paths, i.e. search engines Brands and Retailers working together create powerful consumer experience OMNICHANNEL, OMNICHANNEL, OMNICHANNEL Its not going away Consumers love it and expect it IBDs must embrace it to be relevant PROBLEM: Only 15% of IBDs are Omnichannel BIG COMPETITORS WINNING OVER CONSUMERS Amazon Going Local Investing in brick-and- mortar Rolling out one-hour delivery Establishing local pickup locations Sporting Goods Chains Leveraging Brick-and-Mortar Stores Online Investing millions to improve Omnichannel experience Showing store and supply chain stock status in website Adding special Pickup Counters for faster service Sales staff with tablets and kiosks show consumers expanded product selection, make special orders easy and fun (Up to 10% of big retailers revenue) IBD AMBER ALERT 85% of IBDs are missing online, consumers arent finding them during purchase path These IBDs and the brands counting on them are losing sales and market share The time for IBDs to think about this has past IBDs need to embrace Omnichannel, be a local repair shop (not a bad thing), or retire! BECOMING OMNICHANNEL ISNT DIFFICULT Use a point of sale system and keep your inventory reasonably accurate Have your own store-branded website Promote your value added services and special events Display products for all brands and categories you sell, show which are available in-store now for immediate gratification and which are available in 2-3 days from your supply chain (this can all be automated) Most consumers (over 90%) will use your website to pre-shop and come into the store to buy Many will buy products at your website and pick them up in your store A few will buy products at your website and request they be shipped You may not want to deal with this but recognize its about customer service, not ecommerce You can ship your inventory, or partner with suppliers that do this on your behalf as a service BRANDS and SUPPLIERS BRAND AMBER ALERT Specialty brands count on IBDs Only 15% of IBDs Omnichannel Hurting brands business Brands need to take action! FOUR OPTIONS FOR BRANDS 1.Stop counting on IBDs 2.Sell direct and share margin with IBDs 3.Create brand microsites for IBDs 4.Insist IBDs become Omnichannel 1. STOP COUNTING ON IBDS Sporting goods chains Big box Amazon Etc. DOWNSIDES OF THESE CHANNELS ARE WELL KNOWN THATS WHY YOU CHOSE IBDS TO BEGIN WITH Change Your Channel Strategy 2. SELL DIRECT & SHARE MARGIN WITH IBDS Local retailers are cornerstone of Omnichannel Their brand needs to be Omni Their unique value needs to be center stage They are in best position to manage customer relationship Takes Consumer Focus Away From Local Retailer Consumers want broad selection and empowerment of choice Want to compare brands thats why independent retailers exist Without broad product selection, consumers will search elsewhere Every purchase elsewhere opens door for personalized marketing by another competitor Limited selection makes it difficult for IBDs to attract and keep customers IBD unlikely to sustain profitability with limited online exposure (winning in-store begins online) Brand Has Limited product selection (even with P&A distribution) Brand must have and hold huge influence with consumers (Apple, Harley Davidson) May work in some markets with small brand franchise stores 3. BRAND MICROSITES FOR IBDS Will retailers will be happy with these websites? Makes sense for a brand franchise store Bad IBDs will like them (easy and cheap) Great IBDs wont touch them Will brand be happy with these websites? Brand gains control of retailers online presence (aka % of floor space and inventory budget) Brand successfully secures online network of worst IBDs Most important question, will consumers be happy with these websites? Same problem as brand direct sales Consumers experience limited by brands product selection Loyalty and lifetime purchases difficult lifeblood for most retailers Difficult for IBD to sustain profitability Brands product line preloaded into customizable microsite for each IBD 4. INSIST IBDS BECOME OMNICHANNEL Gives consumers exactly what they want an Omnichannel experience Leverages power of local specialty retailers against online marketplaces and national chains Creates long-term, sustainable, strategic advantage for brand and its retail partners Growing Omnichannel Isnt Difficult Reward Desired Behavior Explain importance and urgency of Omnichannel to dealers (be a leader!) Make Omnichannel a requirement for dealers to get best pricing (take a stand!) Refer consumers from brand website to Omnichannel retailers websites (win-win) Consequences for Undesired Behavior Set date in future when Omnichannel will become a mandatory dealer requirement Ending relationship with marginal dealers is short-term loss for long-term gain Creates opportunity for an Omnichannel retailer to sell your brand in that market, or for progressive entrepreneur to open a new store with a good brand partner NBDA Outspokin: CAN TREK CONNECT WORK FOR US? by Mike Jacoubowsky Poor retailers should be shown the door rather than coming up with a program that assures some bottom level of customer experience becomes the new standard. Minimize lost sales Have Buy Now or Buy Local Now button on product pages in brand website When Omnichannel retailers exist near consumer, let consumer select retailer and place product in that retailers shopping cart When no Omnichannel retailer exists near consumer, sell direct and keep full margin (dont reward undesired behavior) WHILE GROWING OMNICHANNEL IBD PARTNERS WORKING TOGETHER WE CAN KICK BUTT In addition to Omnichannel we need better business intelligence More Timely More Accurate More Comprehensive More Actionable More Efficient More Collaborative Retailers: Bike shops not meeting consumers needs Only 15% provide Omnichannel convenience SUMMARY Consumers: Now dictate retail requirements Expect Omnichannel convenience Retailer irrelevant if not meeting their needs SUMMARY Competitors: Biggest threat comes from outside the specialty industry Online marketplaces and national chains are taking market share, shrinking specialty industry pie Brands continuing to focus on fighting each other over % of floor space and preseason dollars in shrinking IBD pie looks bleak zero sum gain Brands working with retailers to focus on consumers and growing the IBD pie looks bright positive sum gain SUMMARY Brands / Suppliers: Need at least one Omnichannel retailer in every market Be a leader and grow Omnichannel adoption through good communication, rewards and consequences Consider offering fulfillment as service to help dealers While Growing Omnichannel Minimize lost sales Seamlessly transfer sales to local Omnichannel retailers when they exist Sell direct when no local Omnichannel retailer exists and keep full margin SUMMARY Business Intelligence Needs to be better BI IBDS ARE LOSING CUSTOMERS WITHOUT EVEN KNOWING IT Winning In-store Begins Online PANEL DISCUSSION