State of Giant Bicycles and the Industry w/JT

State of Giant Bicycles and the Industry w/JT

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State of Giant Bicycles and the Industry w/JT:  This week, Giant Group’s U.S. general manager John “JT” Thompson joins Chad Pickard, NBDA Board Member and owner of Spoke-N-Sport in Sioux Falls, SD, to talk about Giant Bicycles and the general state of the industry.

“I’ve always admired the Giant brand for their quality of the product, IBD focus, honorable business methods, and their grand opportunity for growth,” he said in a prepared statement. “As I’ve traveled the world, I’ve seen the Giant brand in a leadership role and I want Giant to have the same role in the USA.” – JT

Support the show (https://nbda.com/articles/donation-form-pg511.htm#!form/Donate)

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JT Thompson

Tue, 8/18 10:46AM • 47:12

SUMMARY KEYWORDS

bikes, retailers, giant, bicycles, brand, retail, people, products, cycling, buy, USA, service, dealers, continue, companies, business, big, days, suppliers, lead

SPEAKERS

JT, Rod Judd, Chad Pickard, Kent Cranford

Rod Judd  00:10

You are listening to bicycle retail radio brought to you by the National Bicycle Dealers Association.

Chad Pickard  00:16

I’ve been looking forward to this podcast for a few weeks. I’m a little bit of a fan of Giant and live bicycles. I have a couple hanging in my garage. In fact, everyone in my family has at least one bike that came from giant bicycles. In some cases, it’s actually two or three. Today we’re going to be talking about giant bicycles. And my guest is JT of giant bicycles. Welcome to the podcast. JT. How are you? 

JT  00:38

I’m great. Chad, thanks for having me.

Chad Pickard  00:40

Good. It’s I am really excited about this podcast. It’s not often that we get to talk to someone like yourself, you’re the GM of Giant Bicycles. That’s an important position and also an important leadership position in our industry. So I’m going to thank you for all that you’ve done so far, and hopefully for a lot of things that are coming up.

JT  00:58

Thanks, Chad. You give me more credit than I deserve.

Chad Pickard  01:01

Well, I’m sure you have some great people working with you which giant USA A lot of people don’t really know. But tell me about your staff you have about 100 people and

JT  01:11

we have 93 people. So we kind of internal joke is where the 93 Spartans, and we’re competing with 10 times that personnel from the brand in Wisconsin and the brand in Northern California. So all of us wear a lot of hats and we’re not afraid to do things that are outside our job descriptions.

Chad Pickard  01:31

Okay, Giant USA out in California, you’re not just a warehouse. What are some of the things that you guys do for giant global I guess is what we’d say.

JT  01:41

So we’re one of 14 giant global sales companies. So there’s giant Germany giant France, giant UK giant USA, giant Canada, and so on. So it’s the local sales companies objective is to connect to the culture Using the products that are created with our engineering and manufacturing in Taichung, city, and dacha Taiwan, and to connect to our market with products experiences, but more importantly, connecting to our retail network, we have a global strategy that is based in retail first. So it’s called retail support. And it’s not just something that we do in Giant USA, it’s the same game plan in giant Taiwan or giant Singapore giant Italy. So it’s something that is a global strategy, that retail first, that’s our connection to the consumer.

Chad Pickard  02:44

And you guys do any product development out in California

JT  02:48

or have a part in that we have a major part in that. So there’s, there’s about a half a dozen of us that are involved in that with all the different cycling gear experiences as well as bike Express lenses and there’s three of us that go back to Taiwan. Usually once every six weeks, obviously, we haven’t been doing that recently, we try to shape design and create products that are right for our culture. So we have a big play. So where we have a global leader, so say gravel bikes, or performance mountain bikes, giant USA is by far the global leader, or also live bikes as well. So, we are the leading product development team for a big number of segments that we provide in this market. Now there are some other global sales companies that lead in other categories. So as per se giant Australia would lead tri bikes because that’s really their forte. So what we use is these global sales companies to lead product development, where that segment and experience is is critical in that marketplace.

Chad Pickard  04:02

Sure, sure. Okay. And for those of you that don’t know the brands under the giant umbrella are live bicycles momentum and as well as Kate x live being their ground-up from kids bikes to adult bikes designed for women by women, which is phenomenal. There have been some changes at giant over the last couple months, a little bit of branding, a few name changes. Is that something that we as retailers will see, will we see different opportunities for us or different programs developing because of that?

JT  04:32

Absolutely. In the past, there was a brand elasticity that was so large for giant and live that we had products that were sidewalk bikes that would start near $100. And we would go up to super professional-caliber bikes that were $12,000 and that there’s just too much brandy less density. You can’t be Volkswagen, Audi and Porsche under one brand you need to create segments for the brand In a clear point of view, recently we launched Giant group is the overall umbrella. And under the umbrella sits the giant brand, the live band, and the momentum brand of bicycles and Codex is a component brand. What this will enable us to do and we’re in that process now and it’s something that will be a journey over the next number of years is you will see recreation, sidewalk bikes that were in the giant family, when they are re-engineered a new platform those particular experiences will move to momentum. So the reason I say that is so giant and life will become exclusive to the sport and performance segment. So creating a very clear point of view. momentum, then becomes our urban recreation, transportation sidewalk. And it doesn’t mean it’s a cheap brand, you’ll see some interesting designs, you’ll see certainly innovative e-bikes within the momentum line. So that enables us to create three separate product lines that have a very clear point of view. And I think will help us do a better job with our messaging and our marketing, which is not one of our best performance areas. It sounds

Chad Pickard  06:27

like a lot of change. But it also sounds like you’ll be able to focus a lot more on those categories and deliver a better product. So does that give Giant USA a little bit more of an advantage or well, things look kind of the same from a retailer to vendor point of view.

JT  06:43

I think it’ll give us an advantage because we’ll have a brand that has clarity. My example before of the whole Volkswagen Audi Porsche, I think you’ll see giant will become the performance and sports brand and that’ll be the real vision. powerplay live will be in the same area. And then momentum, as I explained is more fun transportation. So that clear point of view I think will help us define the brand. And also help the dealer be able to communicate what the brands are about. So there’s less duplication today we have an escape. And we also have in a momentum line, an ice Street and some people would say, Hey, there, there is a similar experience. So what we want to do is create experiences that are more powerful in one family and eliminate them from another to stop duplication, we want to be very focused on our product line. So by having a focus, we can actually be a better supplier because we’re one of the only ones I know of that actually makes the food that we serve the writer and the retailer from raw materials with our aluminum Foundry and our own Carbon Fiber through to the retailer’s door, we control the process and we make where our competitors go to another manufacturing facility and by so that makes us very unique. So we’re that restaurant that makes the food rather than the restaurant that serves fast food per se.

Chad Pickard  08:19

Sure. We’re going to come back to that a little bit later. A few years ago, you guys kind of broke the industry mold and brought us the live brand full line of women’s bikes. This year. You signed Rebecca’s Rusch as a LIV ambassador. So some awesome things happening on that front. What opportunity has this provided for women and why does life continue to push for more women’s bikes and other brands kind of seem to be cutting back a little bit?

JT  08:41

The first one I’d like to make is Bonnie two is our chairperson. She’s an avid cyclist. She’s got a great style. She has really been a major part of driving us to make products that are absolutely pure for women over Yours, Chad, you’ve been doing this for a long time like I have, there’s been a lot of shrink and pink bikes out there. Sure. And that’s not live is about making products that are specific for women, our data is very heavy. And the data that we have is women’s lower leg mass fires much differently than a man. There’s much more power from a women’s side than from the way a man writes different anatomy, obviously, and we are LIV is women engineering. As you pointed out, women design women’s colors and graphics for women. It’s not about making bikes that are just a different color. The bikes are pure to create a better performance experience. And often the live bikes will end up being considerably lighter than the men’s bikes because they’re sized a bit differently. They’re smaller triangles. They have a different layup, stroke. For the carbon bikes, they have a different budding procedure for the aluminum bikes. And I think some of the reasons why many of the competition has backed away from making these bikes that are specific to women’s performances. It’s an ROI issue, making carbon mold. It’s $100,000. When you do it the way we do it, that’s one size. All right, and every size for a giant carbon mold is a different layup, outer diameter, inner diameter. They’re all unique for a specific size rider. So when you see other companies trying to do that, there is a lack of ROI to recover that tooling cost. Fortunately for us, we have that integration of carbon makeup as well as an aluminum foundry. So we can be more specific in quality as well as also saving some costs because we do the work ourselves rather than buying from a third party. I do not see any lifting of the gas pedal when it comes to lifting. If anything, I think you will see more and more. As we talked about how this giant group impact works in the future, that you’ll continue to see more and more performance bikes. So Rebecca rush that girl’s my hero.  I don’t know how else to say other than she’s the real deal. She kicks ass and she’s awesome. And having her with us and helping us design some of our products in the LIV family is going to be huge. I think you’ll see more and more of her involvement with our company, especially here in the USA, but it’s also a global play as well.

Chad Pickard  11:44

When personal requests can we see some of the live colors and marketing come over to the giant side. I mean, the live stuff just jumps off the page in a catalog on the showroom floor. It just screams it wants to be written. I love the color of the designer. it and I know I know some other giant retailers that talk about that as well. But the LIV stuff is amazing looking they do an incredible job with it every year.

JT  12:08

So I created the live bikes are certainly leaders in their outlook. I think that’s pretty important to see that LIV has that unique team. And live is radically different from what you see on the outlook of Giant and the momentum lines. I think you’ll see the giant team raise the bar I think they have over the last couple of years. I think our outlook has really improved and we’re implementing some new paint processes and some proprietary graphic presentations. I think that will help our amazing engineering pop off the page. So people just want to buy it because graphically it’s over the top and inviting. Awesome. I

Chad Pickard  12:55

look forward to seeing that in person and print on the web wherever possible. We’re gonna shift gears A little bit a couple of podcasts ago, we talked about the bike boom and 1973 there were 15 million bikes sold in the US. And the next year that number dropped almost in half numbers went from 8 million to 15 million and then back to 8 million. What do we need to do to continue this bike boom that we’re currently in? What do retailers and vendors need to do to ensure that these new cyclists coming into bike stores are gonna you know, when the weather gets nice again next year or and in some parts of the country stays nice. What do we do to keep them on their bikes?

JT  13:31

But I think we have a little different issue. So I was riding a bike back in those days when there was the gas crunch in the mid-70s. Gas came back at reasonable prices. our human nature is to forget things pretty quickly. Where I think that changes now is I think, now we’re into a quality of life issue, a health issue. I think the fact that you know, we’re having this boom right now, which is what I remember, it’s much bigger right now than it was just the acceleration of where we’ve come. Because I think those of us who have been in the business I’ve seen the last 10 years where the independent specialty stores have been kind of stuck with about 2 million bike sales per year. I think it’s going to be a lot, potentially bigger this year, but the supply channel just can’t accelerate from 20 miles an hour to 100 miles an hour. So that’ll be our challenge. But I think it’s human nature, to want to have some fun. And I think right now, there’s a lot of people having fun on their bikes, they’re able to have separation, they’re able to get exercise. And I think we all know that cycling, the cost of cycling is an amazing value. When I go to the giant factories and I see what we do, and then I see what we price our products for. It’s just mind-blowing that we can make it work with all that goes on pulling together all the parts that makeup one complete bike. So where I think this wins is, America is a very car culture. I think we’re changing that a little bit right now, especially in urban environments, I think mass transit will be less likely to be used. Because there are some health concerns. I think the gym following someone sweat on a machine and then jumping right back on it, I think might be a challenge, where you can just ride your bike and it’s your own sweat, or your family sweat, the fact that people are riding now, I don’t know if we’re going to hold all of the acceleration that we have right now. But I think it would be a really great opportunity if we can hold 20 to 25% of that of those cyclists that are new now that they stay in it. They become our dream, which we all know that’s the cyclists for life, where they buy their second bike, their third bike, they get involved Cycling becomes part of their life, they become that cycling person, which I think many of us in this industry, and I think outsiders think we’re a little touched. But I think there’s going to be more of that. We’re going big. We believe, here at Giant USA that the next 18 months in America are going to be a great opportunity to get more people on bikes and its real challenges supply with the right products at the right time, I think is going to be a big deal. It puts a lot of pressure on us as a manufacturing company to get the proper throughput, get our sub-suppliers who at times control our lead times to perform at the level that we do. So we’re bullish, we’re excited. We think America is going to be more like Europe and a certain degree in which I’ve lived in Europe for a number of years racing my bike, and it was always amazing. The culture, the intelligence, and the health, that really seemed to be a direct connection to the cycling life. And I think it’d be a great thing if America got closer to that.

Chad Pickard  17:12

Yeah, I agree that physical and mental health would be completely different. I mean, I see it in, in my own employees when days that they ride consecutively into work versus, you know, weeks, usually the winter where they drive a little bit more, you just see that personality, it’s completely different. So let’s just hypothetically let’s, let’s just say that I own a bike store, maybe in Sioux Falls, South Dakota, and I’ve got to do some planning for next year. Do I look at

JT  17:37

this year’s number and do the same do I? How can I work with my vendor to make sure that I’m going to get bikes next year? That store that you just described is a unique circumstance and if you have multiple stores, you know, even the store that’s store two is always very different than store one or store three, they’re always unique. So I think it’s up to you to connect to the marketplace. Giant USA is like a big retail store, right? We’re retail support, as I explained earlier, and our decision to buy big, that’s how we’re going to run our business because we think there’s an opportunity out there in the marketplace as America changes and goes more cycling centric. So we’re going to do our best to fill our three company’s own distribution centers that are 150,000 square feet plus, in California, in Illinois, as well as New Jersey. And the reason we do that is so we can feed our customers within two days to 90% of the country. We want our retailers to turn their inventory because inventory term means profit. But Chad, I think we’re in the new world order. I think we’re going to need to be aggressive without risk there is little reward. And right now, I think all these signals, and maybe you say it’s a stock market play or a futures play We as Giant big retail company, we’re going to go fast. Now we’re going to try to supply those sub $1,000 bikes in an aggressive manner. continue to innovate with sport and performance bikes, really push hard on E-bikes that people can afford, really round out our brands. And the most important thing we can do is to help our retailers thrive and make money, again goes back to retail support, and that is, if our retailers are healthy, we are healthy. If our retailers are not healthy, we suffer along with them.

Chad Pickard  19:38

So you guys do some planning some inventory planning, obviously, I mean, I hope where do you see the value from the retailer’s from their planning? Is it I’m assuming you don’t need down to specific skews, like in six, seven months? I’m going to need eight of this specific skew. Is that forecasting more per category is it Do you like To see size runs, like what would your average size runs are? Or is it color? Where do you guys benefit the most from getting information from retailers for long term projections? 

JT  20:11

Okay, this is going to sound hard. But we have made aggressive buys forecasts as the improper term. We have placed firm orders with the factory for size for color for the model. That’s what we’re doing because it’s the only way that we can ensure supply from our sub-suppliers and obviously, the biggest one is Shimano, and number two is SRAM, and there are other opportunities out there as well. So as a manufacturer, being first in line with the sub-suppliers, unfortunately, we are because we’re the biggest global manufacturer and we also do a web business as you’re well aware of. We got to be firm for us. So I would ask really Taylor’s to be as firm as they possibly can buy the bikes they know they’re going to sell. And we’re forecasting an increased opportunity of more than 40%. So when I said we’re going big, we’re going big, but I want to put that in relevance to Giant USA. Were an underperforming brand in America. I don’t think there’s a reason why we should be in the position we’re in. Now I’m not saying that’s bad. I’m just saying around the globe. In most marketplaces giant is the by far our leader by far sports performance brand leader in Australia, in the UK, in France in the Benelux countries in those real cycling centric markets. And what makes me stay awake at night is even our brothers and sisters to the north of the US and Canada. Giant is the number one brand competing with the Same brands we have here in America. So let’s just say holding myself accountable and holding the rest of the 93 Spartans here accountable is we have a great opportunity for growth and the growth will be done the right way. We’re not going to roll the tank over the bodies. And I think we can do some great things with our retailers as partners to win together. But we need those firm orders. Okay, which I’m a huge fan of, I think that you know, with any brand you as a retailer, you sell what’s on your floor, and you order what you’re going to sell. And sometimes I think our customers are not, they’re also not coming in for that specific skew. They’re coming in because they want to bike with their kids. They may prefer red, they may prefer black, but ultimately their real desire is to have fun on a bike and not have fun on that specific UPC number. So yeah, no, I don’t think that was a hard answer at all. What can I Retailers do with Giant to help continue to move this ball forward? I mean, what? Where can we work together? Is it working together by creating programs? You know, Giant has their web link, and they have their Ambassador programs, which have been sounding like they’ve been great for retailers. Are there other programs coming out? I mean, is there or is it just a matter of retailers asking for help in certain areas, we’re always going to adapt. So we have this term here at giant globally called PDCA. Plan, do check act. So we’re constantly evaluating our planning. And we assess those projects or actions, sometimes on a weekly basis, monthly, quarterly, yearly, and then we repeat, to improve. So that’s the plan, do check, act repeat. So we’re constantly evaluating our products or services and some of the key services that we provide Right now, our weblink our click and collect, actually a pretty small business for us chat. Now it’s gotten a lot bigger since March with the issues we’ve all faced. And what I understand from the research I’ve done and with some experts is prior to COVID-19 total eCommerce sales in the US were about 8%.

Chad Pickard  24:26

Is that just bikes or is that bikes and bike gear?

JT  24:28

No, we’re talking all e-commerce. Okay. All goods. So Macy’s, Target, what have you. Okay, so I’m sure that number is a lot different now. Three months later? Sure. So you haven’t seen the numbers come up yet. And some of the very best companies are in their total revenue zone is 20% is done through e-commerce. So we’re in the single digits at giant Group here in America. And I’m sure that it’s going to continue to rise, as more and more young people are involved with capitalization that they have the money. But one thing is going to be crystal clear about whatever we do with our click and collect what we call weblink. In America, we’re going to share the profit with our retailers. So we call that O plus O and O plus O. o is online. So that’s our web link. And then offline is our retail network. So whenever we do online, we always think retail first, how can we support our retail network? You know, the retail network? I think you know this very well. You guys are. Those guys are on the front lines. They’re dealing with the customers have each one has unique needs, different ways of communicating. We want to empower our retailers to remain individualistic To cover every unique human circumstance, holy crap that’s challenging. So we understand how hard the retail job is. Anybody that’s an executive in this company has come from the retail world. And we’re going to do everything we possibly can holding up our part of the partnership. And I hate to use that word partnership, because it’s, it’s used by many who don’t know what it means it’s a marriage. And yeah, we’re not perfect, and we’re going to make some mistakes. And you’re going to make some mistakes at the retail side, too. But the thing is, I think if we know we have each other’s back, and we’re always pushing to help each other. There’s always good intent behind every action that we’re going to be powerful together.

Kent Cranford  26:49

This podcast is brought to you by NBDA, membership, and industry donors, to continue providing education and content like the podcast you’re listening to now. We need your support. Go to NBDA.com and join or donate today.

Chad Pickard  27:08

So, because of my position on the NBA board, I get to know a lot of retailers and retailers as small as I donate in Sioux Center, Iowa is backyard community is 7000 people from woody at Richardson bike Mart, who has 7 million people in the Dallas metro area, you know, to obviously different retailers in different parts of the world. How do you connect with them? And how do you relate to them when you don’t have Interbike? Or a trade show or the giant link event? How do you connect with them to see you know what their struggles are on a daily basis, other than a zoom meeting with everyone which it probably isn’t possible?

JT  27:46

That’s correct. And I’m not a fan of zoom now because I’m on zoom for like five hours a day in a hurry. I believe humans love human contact. Unfortunately, the last three months we’ve had to stay six feet apart from each other We’re going to do our best in this hopefully temporary time to do virtual launches. We’re going to empower our we have 25 account executives on the road. We’ve got three regional sales managers. We’ve got eight inside reps, we’ve got five after-sale warranty people, you know, really trying to connect with each individual retailer in this challenge. Do we know how well it’s going to go? No. Do we have every intention to provide as much information and intimacy as possible? Yes. And we’ll see how it goes. I hope the days return where we can have link launches. Again, be more intimate, but we’re going to try our best with electric launch capability, zoom meetings, podcasts, video presentations. We’re learning ourselves right now. We’re in these new waters and we’re trying to swim as well as we can

Chad Pickard  28:59

get It’s gotta be challenging. I mean, as, as a retailer myself, you know, it’s hard to have those in-depth conversations when you do not face to face. And it’s just a digital connection or maybe just a phone call. But I certainly look forward to things changing, I think, I think everybody has sat there at the retail level, retailers are being told to add more and more value for their customers when a product is bought. And that’s, that’s how we’re going to beat online sales. And I don’t, as you mentioned before, that’s only 8%. But so as retailers add more and more value that comes at the expense of time and resources, which can slowly erode some of the dollars and cents that make a bike store sustainable. How can a retailer add more value without eroding that? How can giant as a vendor or other vendors add value to their product so that the retailer doesn’t carry that full load?

JT  29:54

Yeah, that’s a real challenge. We’re in a business where a profit struggles Sure, and the margins are lean for everybody in the full channel. So it’s like we’re trying to get blood from a stone, our fixed cost, variable cost percentage versus what our profit side brings in, is so tight, it’s alarming. And it’s just like a retail store. A couple of points here, there can make you very, very sad or make you very happy. But that’s so we’re kind of in a very interesting business where it’s so damn lean. So I think on the sales company side, the distribution side, what we do here in America, we got to figure out ways to help. So do we offset home deliveries? Do we provide cash payouts on a web link, which we do now? We provide a 100% margin to stocking dealers do we create different incentives that recover more margin for those areas that we might have a little more margin, and we can share it back with the dealer. But some cases, just like the dealer, when we’re selling $150 bike, when it’s all said and done, we’re doing it out of service. We’re not doing it for profit. It’s really challenging. So how do we offset freight, which is one of our biggest challenges from the giant side as well as the giant retailer side? Right? How do we do that? Because we’re in a freight war. What I mean by the freight war is the freight wars with Amazon with all the e-commerce companies going into the transportation companies that we use and basically bumping us to the back. We’re a relatively small business and I’m talking the whole industry, we don’t command much power. So the transportation companies kind of have their way with us and put us to the back of the line. The rates are not the best for us. So we have to figure out a way To navigate that challenge and to help our retailers as well. And I would say one thing that’s pretty, please don’t think I’m crazy for being so Frank, is we can be pretty stupid in this industry. The fact that we don’t charge the consumer for freight in my mind is insane. I mean, at the retail level, right? When you buy a car, you buy a motorcycle, you buy a boat, you buy any premium consumer good, which a bicycle is. There’s always a destination charger, whatever you want to call it. So, yes, in the 70s, that great brand out of Chicago came up with all their innovative stuff. And I think this industry is falling along with that because we don’t know a better way but I would say if retailers start charging consumers a delivery charge for freight, I think it offsets that it makes a big deal over the course of an annualized business, and I’m just using that as an example. There are other areas that I think we just give away. And we’re giving away when we don’t have to. But on the giant side, right on our web link, we have to set the tone we have to set the standard. So we have to charge the consumer All right, a delivery fee as well. So it’s not all on the retailer chat it’s part our deal as well. So and I think we need to lead that revolution of more profit.

Chad Pickard  33:32

I can get on board with that Yeah, Yeah, I agree with a lot of that, you know, you buy a new car, you might get an oil change, but you buy a new bike and you get one-year free service free, you know, probably a static fit of some sort. discounts and accessories. Yeah, yeah, it’s dollars being given away and just walking out of the door. So yeah, though, that’s for it’s a frank answer, but yes, it’s I agree I would love to see a day where you know whether the weed becomes more sustainable through greater margins or giving away less. I think that’s important for our industry.

JT  34:10

Even more on that, and you got me all charged up on my soapbox right now, sorry about that. Go for it industry. We’re in the service support we provide. So those free tuneups lifetime warranty on frames or wheels or whatever you have you. They are in no other business. I’m not saying it’s wrong, but we have those services, we have those programs. And I don’t think they have much value because we don’t put value to them. So I traveled the country often, except these last three months, and been doing it for 30 years or more. And it kills me when I see service rates of x dollar and you can go to one market. You can see all The dealers in the metro area or small city, you can see all the service rates, the change, I’m sorry, are the same. There’s a vast difference in what some dealers do versus what another does in the quality of service and the way they build their bikes in the way they service bikes in the people that they hire, the expertise, the technicians, and we’re not talking about low tech goods anymore in the bike business. I mean, we have some of the highest tech goods that rival Formula One cars or motorcycles. We don’t treat the business as such. So So going back to my original point is we give service away and we don’t charge enough for it. I have owned an old European sports car for many years, which I rebuilt and fortunately, I can do that on my own. I tried to go to that German car dealer to get my car serviced. I wouldn’t be able to feed my family. So I think we’re just leaving too much undone, especially for those that do it to a very high level. If you do it to a high level, you can charge more and have the confidence to charge more and justify it. I think a lot of this comes from dealers being challenged in the quality of people that they can hire. There’s a lot of young people involved in retail, they’re kind of transience in their job. So I have a lot of empathy for retailers with humans that are working on the floor. It’s so hard to find good people to keep good people pay them enough when the business ROI is so challenging, as we earlier spoke about.

Chad Pickard  36:43

I think you said it I mean, there is an opportunity there to charge the right price, whether it’s service or not. There was my accountant told me he said his competition in his town, which is a small town in Iowa. His competition doubled all of their rates, and their first thought was they’re going to do half as much business and then their second thought was, they’re going to make the same amount of money with half as much work. I’ll never forget that story. And I hope that people look at service that way that you know, right now we’re most bike shops are just booked a month out. If they transition some of their pricing to a little bit higher to what it actually should be, you know, then they may lose a little bit of service, but they’re also going to be able to pay more competitive wages, probably staff that’s less stressed, probably the staff that is truly skilled will probably stick around longer and enjoy their jobs more. But yeah, I agree with you. That’s thank you for that. Appreciate that.

JT  37:35

And Chad, what you just said I think delivers on the end goal of quality, rather than volume and being the best and being quality is should always be your first drive. Right. Going back to your question about plenty of work with a small local 7000 population town dealer or that Richardson bike Mart, you know, in a major metropolis of more than 5 million people my answer Human on human, it’s identifying the unique needs and doing your best. No one plan works for everybody. And we try to put everybody into a general plan. But then I think it’s very important that we have the courage and we have the flexibility and the partnership to flex where it makes sense to build both of that business relationship to return the most reward

Chad Pickard  38:28

I want to go back to so giants you mentioned, you know, you cook your own food and deliver it and serve it in your own restaurants, in a way distributed through your warehouses. So with giant owning that kind of that whole process what’s, you know, from the time that you say we need this product, to the time that can be on a sales floor? Do you have any sort of edge with owning that whole process? Can you get a product to market any quicker? And what is that timeframe? Like? Is it three weeks is it 60 days, 90 days,

JT  38:58

so our lowest lead times Our I’m going to put transportation to our market in there too because we’re talking about 30 days under. Right great for order placement to where we have it in our distribution to get in the hands of our retail family is 90 days is the shortest lead time. That’s not today, because today we’re in it upside down demand cycle and supply cycle as well because still a lot of sub-suppliers are not at full capacity. And then some of the longer lead time bikes, you know, some of the Exotica stuff might be as much as 150 days. So sometimes we’ll make a plan for that Exotica type product, and let’s just say it’s 300 bikes we go to we present the bike and our dealers just get overwhelmed and excited, and they buy 600 bucks, the second half that 300 is not going to be delivered until 150 50 days later, at best, maybe we can put it on an air container and get it in 120 days. So, at certain times of the year, sometimes you miss the whole opportunity because you know that a sub-supplier has a new widget coming that will obsolete, that particular rear derailleur or fork. So it can be a challenging business. I’m less worried about the sub $1,000 bikes because I think we have more flexibility there. Okay.

Chad Pickard  40:33

So as a retailer we have challenges with as a vendor, I imagine is that transportation that shipping time is that one of your biggest challenges is working around that. Is it the value of the dollar? I mean, what are the struggles at your level?

JT  40:49

So the transportation thing is a challenge in the sheer cost. That’s that challenge. The biggest challenge we face is efficient production time, meaning getting all the hundreds hundred little parts to make that complete bicycle, getting it all scheduled to go down the production line. And then getting all the boxing all the employees and people power is a huge challenge because we have this thing called Chinese New Year in Asia. And it’s not just China. All right, it’s whether it’s Taiwan, Cambodia, Vietnam, the Philippines, Singapore, Malaysia, people go away. And there seems to be more of a transit workforce there. And it’s very common for 20% of that workforce not to show back up. So, yeah, imagine your retail store where you know, you had a vacation time when things were lean, and then all of a sudden, you know, those who you least expect don’t show up again. It’s usually RAGBRI week. And they’re laying in a cornfield.

Chad Pickard  42:03

If they’re lucky, yeah,

JT  42:05

 I’d say manpower is probably the biggest challenge. And what we’re trying to do to circumvent that is there is more and more automation coming into play in manufacturing. So in aluminum frames, robotic welding, and on some of the carbon stuff, there are some robotic actions taking place in the cutting of carbon prepreg. And then the pool of carbon prepreg, as it’s laid into the mold as well. So, I mean, there’s a lot of technology and there’s a lot of opportunities to improve. So what it does is the cost is high for automation, but the production throughput all right is more consistent, provided the robot doesn’t break down. Sure, or the operator that is using the robot shows up for work

Chad Pickard  42:58

right different challenges. Have to make sure that our pizza gets delivered on time for our employees and the beer fridge is full-on Friday nights. Well, john was cooking, we’ve covered a lot of things. And I want to thank you for being on the show. We’ve, I’m sure we’ll talk again, maybe on a webinar or on another show. But thank you for taking the time out of your busy schedule and spending it with us today. Any final words you want to add?

JT  43:22

Yeah, I just can’t use words to describe the change that has happened to our business in the last 90 days. The expectation of when you know, these headwinds first started to hit us in February. And then as it just spiked, we thought the business was going to be soft, as many businesses thought, but it actually went the opposite way. Fortunately for us, we took care of our sub-suppliers and continue to keep our orders in place and continue to pay them like the business was going to be as planned. And I think that’s put us in a very good position right now, as some others did cancel and put things on delay. We are really, really focused on retail first, we’re not perfect, we’re going to make mistakes. But our, our integrity in that end is very high. We know how hard the retail network is. And the retail network has experienced, probably threefold of what we have from our side because we’re somewhat isolated. We take a knee per se, and really appreciate what our retailers have done for us because, without them, we would not be here, being able to enjoy the cycling life, because I love to ride my bike every day and I’m just like your employees. When I ride my bike. I’m a happy camper and whatever comes my way I seem to be able to brush the dirt off and when I don’t ride the bike things Things seem to get through my pores and bother me. Closing note again would be, we’re focused on supply. Everything is about supply right now, especially for the next 90 days, July is has been pretty tough because what took place with sub-suppliers in February and March when Shimano was essentially shut down in Singapore and a number of other places were shut down because of governmental restrictions that we’re feeling right now, because of the lead times in June. So we’re doing our very best to spread the bikes around because we want to feed everybody and it’ll get better in July. It’ll get even better in August. And I think it’ll get better again in September. It’ll continually improve from our side on the supply. And we’re confident that there’s going to continue to be more consumers that see the value in cycling and visit innovation. pendant specialty retailers that want service want to love and want to be part of the cycling life, not just buy a bike that’s going to hang from a hook in their garage because they spent $150 on it from a mass merchant.

Chad Pickard  46:13

Well awesome. Yes, I know a lot of retailers are looking forward to you know, opening up the floodgates of bikes and and and hopefully continuing into the next year and years beyond that too with new customers and more customers. So yeah, looking forward to that. So thank you JT. Appreciate your time. I hope Giant continues to thrive and the health of your staff and family continues to be healthy, I guess. Thanks, Chad. back at you already. You take care.

JT  46:39

Okay, my best all our retailers. I want to thank them for their support. They’ve really been everything to us.

Chad Pickard  46:46

Cool. Thank you. Hey, take care.

Rod Judd  46:48

 This has been bicycle retail radio by the National Bicycle Dealers Association. For more information on membership and member benefits, join us @NBDA.com

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Chad PickardChad Pickard
Owner, Spoke-n-Sport – South Dakota (2 locations)

In 6th grade, Chad took apart and rebuilt his first coaster brake hub.  It was that curiosity that kept him working in bike service shops from the age of 14 till buying Spoke-N-Sport in 2001.  Mountain bikes and Hans Rey ignited his passion for technical trail riding a few years later.  Chad’s work experience is almost 100% bike stores but he is always looking to other industries to improve the customer experience in his two stores.  Chad serves on the bike committee in Sioux Falls and has played an active role in defending the rights of cyclists at the state level including the most recent 3-foot / 6-foot passing law.

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NBDA LogoThe NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

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