Canadian bike company Cervélo likes to think of itself as an innovative company, and it can make strong claims given some of its frames. But it’s now trying a new idea that’s not related to carbon fibre or aerodynamics: centralised ordering and distribution via recognised dealers.
In a press release, Cervélo outline a new distribution model. Here’s the juicy bit:
Starting with the 2011 model year, Cervélo will take this commitment to customer satisfaction to a whole new level…
…the Cervélo website, which will allow our customers to choose and order their Cervélo of choice right there. This bike will then be delivered through one of the Cervélo retailers near them.
What this means is that customers can’t buy a frame over the internet from any outlet in the world for delivery to home. Instead they’ll pay online to Cervélo and then head to the nearest recognised Cervélo dealer to collect. When a company issues a press release promising better service, expect higher prices.
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The idea says the company is to offer new service, to ensure the bike fits. This is fine for many customers who might want their local bike shop to give advice. It’s also handy for the approved retailers who will gain in footfall, a customer coming in to pick up a new frame is likely to buy some bar tape, if not a whole groupset.
But many cyclists are able to understand geometry charts and might find it better having the frame sent direct. Above all, this means Cervélo is going to have rigid control over the distribution and pricing of frames. Given the centralised ordering, this presumably means centralised pricing. Indeed if you wanted to buy a frame in another country because it’s cheaper then mail order is out of the question. It’s also potentially advantageous for Cervélo on accounting terms given they should sit on the cash when the internet order is placed.
All in all it means the company gets a tight grip on distribution. There’s the potential to offer better service but if someone orders a 54cm frame from cervelo.com, who’s there to tell them they actually need a 56cm?
I for one find the idea interesting but it’s a step away from frame manufacture and into brand management. No longer is the company just making frames and letting anyone sell them, now the distribution and retail is being controlled. It’s like buying a new car where the brand can be reflected in the showroom rather than just sold alongside many others. All that is fine but it’s designed to protect the manufacturer and its brand, potentially at the expense of the customer. It suggests Cervélo are hanging out with management consultants, not engineers.
EDIT: UPDATE: 12 October – Cervélo have issued a new release which states the scheme is now only going to work in North America for the time being.