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Going Shopping
What's happening to bike shops, and why should you care?
Recently I read a story about the future of motorcycle retailing. It was well written and very interesting, but there seemed to be something missing. After reading for a bit I realised what it was; the story was written from the point of view of the retailer. It was about what would happen to him (or, rarely, her).
But (sorry, bike shop folks) this is not what I was interested in. I wanted to know what’s going to happen to me!
So I went off and talked to a bloke who’s been involved with motorcycling for as long as I have and has seen it from just about every side.
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Vince Tesoriero got into the bike industry in 1968 when he became secretary of Willoughby Motorcycle Club. Being a club secretary might not seem like being in the business, but Willoughby was an amazingly active club that promoted rider training and motocross and road racing, as well as running one of the biggest rallies Australia has ever seen — the Clubman.
He was full-time secretary for six years and in that time and later did just about everything it was possible to do in connection with bike racing, including starting Mr MX. And it was not just bike racing, either. Vince marketed the V8s at Bathurst and acted as consultant for the Seven Network on its race coverage. Much of the time he worked in advertising, using his position and experience to promote racing and get coverage for it. It’s not too much to claim that Vince was one of the people responsible for Australian motorcycle racing’s golden age.
But unlike a lot of the others who were involved in racing, Vince stayed in contact with the retail industry as well. Involved with Sydney shop Procycles since 1974, he has kept a close eye on the retail side and developed some pretty detailed ideas based on his long experience.
I’ve known Vince for more than a quarter of a century and trust his judgement. He has his own barrow to push, on behalf of Procycles, but he was also pretty obviously the right bloke to ask, in my own interest and on yours, just what the future holds for us.
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| | My first question was simple — what’s happening?
"It’s no secret that a lot of the little shops have gone," says Vince. "They just haven’t been able to comply with manufacturers’ demands for appearance: they couldn’t afford the corporate image and the overall quality. But we now have a whole generation of motorcyclists that wouldn’t want to go to a traditional motorcycle shop with its dirt floor anyway.
"People are used to the standard of shopping malls and they don’t see why they shouldn’t have that everywhere, including bike shops. The industry is going to have to match that expectation.
"At the same time, the car sales groups are getting involved. The likes of Alto and Trivett will offer a sophisticated environment. But of course then you get to play the game of ‘spot the impostor’, although not everyone will have any memories of what a traditional shop was like."
So on the one hand the little traditional shops were grubby, but on the other hand they had credibility?
"That’s right, and a shop needs history to have credibility. Even motorcyclists who buy their bikes from a car dealership will go back to the roots with their second or third bike. They’ll gravitate back to the legitimate shop. There is more to motorcycling than shiny bikes on shiny floors. There’s the camaraderie, sound advice, the social side.
"The car dealers like motorcycles because the retained margin on a sale is about 7 per cent as against 3 per cent on a car, but they treat them as a commodity; they’re just units."
But of course there’s more to modernisation of the retail motorcycle business than just the invasion of the car dealers. Bike shops themselves are upgrading, too. The Procycles shops are a good example.
"We’re real motorcycle shops and we try to reflect that in different ways. We have our displays of memorabilia, we employ qualified people and the shops look like bike shops. And we’re not the only ones; there are plenty of others, look at Fraser’s. But the small shops will continue to have trouble surviving except in the country, where they’re solidly involved in the local community.
"But even there they have problems. Their customers use the internet to buy things, especially accessories and clothes — that’s had a huge impact on the industry — or they drive to the city."
But you can’t rely on the internet when you’ve got a problem, or need something done, can you?
"No. There are many problems with the internet, including backup and warranties. And isn’t it nice to know that there’s a bike shop down the road when you need it. But if you don’t support it…"
One reason why customers don’t support their local bike shop is discounting. What’s going to happen there?
"A lot of new entities and chains are coming into the market and trying to buy customers by discounting. But now they are beginning to realise that they need to be profitable, too; bulk turnover alone is not enough. The cowboys won’t be there long if all they make is $200 profit on a sale.
"We’ll see less discounting in future. On the one hand, the car dealers will just quote the recommended retail price anyway. On the other, customers want the genuine relationship, access to a quality workshop and so on that only a profitable bike shop can offer."
So would you say that Procycles, just for example, is pretty much the typical “real” motorcycle shop of the future?
"Even we will continue to become more professional and shops everywhere will be more brand-specific. Sole franchises will increase in number as the manufacturers put more pressure on shops to carry their entire range. And they will be genuine sole franchises, not just shops with more than one frontage.
"It can work because motorcycling will continue to grow. The market has increased by 35 per cent in recent years. Motorcycling makes sense.
"And there’s more to sell than just bikes. Customers are interested in branded clothing and some of the bike manufacturers have high-quality ranges that are fantastic. People turn to branded goods when they are sick of failures with cheaper stuff."
Talking of growth, what’s going to happen with scooters?
"The scooter market has a long way to go. It’s still struggling with small time operators, but it will mature into a stand-alone business just like the motorcycle industry. Big business will continue to become involved there, too."
So there you have your future according to Vince Tesoriero: fewer shops but bigger and more sophisticated ones, but they will still be genuine bike shops. Down the road bikes will be available from car showrooms and that will keep the bike shops honest and keen. It doesn’t sound too bad.
At least that’s what Vince thinks. He should know; let’s hope he does!
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