Dynamo Retail Group GM on ‘The Reasoning Behind Experience Centers’
AMERSFOORT, the Netherlands – “In response to the growing importance of direct online sellers we see that brands which were exclusively distributed by dealers in the past, start to approach the consumer directly as well. As Europe’s second largest dealer cooperative I think we should improve our performance for those brands by offering them more stability,” says Dynamo Retail Group GM Maarten de Vos. “The opening of our first experience centre together with a group of our member dealers in the Netherlands offers a solution for that.”
“Consumer direct brands, particularly in the category e-bikes, have increased their market share substantially in the past years. In the Netherlands, direct sellers like Stella and Amslod have increased their e-bike business twice as much as the regular retailers in 2018,” explains De Vos in an interview with Bike Europe. “As Europe’s second biggest dealer cooperative decided to pick up an active role in this development and participated in the first Bike Totaal experience centre based in the Netherlands.”
One of the successful strategies to implement omni-channel distribution comes with the creation of experience centres. Besides the traditional outlets these should give consumers a better touch and feel of an A-brand. In the past years, the bicycle market has seen the opening of a series of those experience centres. Nearly all of them present one label only or just the brands of one company.
Why did you decide to step in experience centres now?
“Recent Gfk market studies show that the market share of traditional brands decreased in 2018. We also see new entrants with e-bike brands at the IBDs, but the category ‘other channels’ shows the biggest growth thanks to consumer direct brands like Stella. They increased their market share from 17 percent in 2017 to as much as 23 percent in 2018. In volume, they expanded their sales twice as fast as the rest of the market. These direct sellers start to open their own stores to provide service and maintenance. They strengthen their competitiveness against the existing brands and with that also against the IBDs. I think we had to respond to that market development.”
Can you explain how Dynamo Retail Group and A-brands cooperate in market today?
“In my opinion, the IBDs cooperating in the Dynamo Retail Group and the A-brands should work closely together to improve our joint competitive strength and enlarge our market position. With our economy of scale, entrepreneurship and our relationship with the customer, we can make the connection between supply and demand much better than suppliers. Our system of product availability based on a permanent collaboration with our contract suppliers, which guarantees the right bike at the right time on the shop floor, is a good example which we must communicate clearly to the market. Furthermore, we also have to facilitate a cross-store brand policy, optimize our omnichannel approach and offer openness to each other. We have to reinforce each other, not compete.”
‘When the big brands opened experience centres, we asked ourselves; why don't we have these in our dense IBD network?’
Why don’t you join existing experience centres?
“When the big brands opened experience centres, we asked ourselves; why don’t we have these with our dense IBD network and A-brands portfolio? It makes much more sense that retailers operate experience stores instead of the manufacturer. We can present the full range of products to customers and introduce people to all the brands, types and sizes of brands that we carry. We can offer customer the ultimate buying experience but also respond to the experience centres of the direct sellers.”
Why did you wait till early 2019 to open the first Bike Totaal experience centre?
“We explicitly did not want to set up a new location, but transform an existing and successful store into an experience centre. That opportunity came late 2018 when on of members Peter Terlouw in the city of Barendrecht did put his store on sale. It gave us the opportunity to open a centre in a densely populated area where many Bike Totaal and Profile stores are located. We developed a concept in which experience centres are based on a profitable and existing store. The new centre is acquired and owned by the Bike Totaal and Profile retailers in the area. We, as Dynamo Retail Group hold a minority stake, in this case of 5.88 percent only. This centre has a total floorspace of 2,700 square meters on three levels. The participating IBDs benefit equally from the direct turnover of the experience centre. If one of the participating retailers sends a customer to the experience centre and he or she buys a bike there, the IBD pays 5% of this margin.
How many experience centres do you expect to open in the Netherlands?
We are now running a pilot with our first experience centre. When the tests are successful we will start more of these them. “We expect to open some 10 to 12 locations in the Netherlands. The setup will always be the same, but in a less densely populated area a smaller group of IBDs will be the owners and the radius will be larger. How fast we will roll-out the concept in the country also depends on the availability of locations. As mentioned, we are not going to open new store, but only take over existing Bike Totaal or Profile stores. This offers opportunities for both IBDs who want to sell their shop and those who want to expand.”
About Dynamo Retail Group
Dynamo Retail Group is Europe’s second largest dealer cooperative operating shop formats like Bike Totaal, Dynamo Retail Service, Fietswereld and Profile de Fietsspecialist in Holland, Belgium and Germany, has some 800 affiliated dealers/members.