The Retail Bicycle Industry32 Stores
The Bicycle industry has seen a surge in popularity in recent years with participation rates amongst all age groups increasing steadily. The recent National Cycling Participation Survey found that in a typical week around 18% of Australians ride a bicycle for transport and recreation with around 3.6 million people riding for recreation, leisure or sport and 1.2 million people making at least one transport journey.
The popularity is spread over all age groups, with children remaining the largest users of bicycles on a regular basis. Adult users of road bicycles make up a smaller percentage of total users but certainly contribute the most when it comes to the value of the equipment they purchase. Road Cycling clubs and teams have contributed to a huge increase in the uptake of road cycling in 30 – 50 year olds.
The Australian Bicycle Council recently released the National Cycling Strategy, encouraging all levels of Government to invest money into bicycle education and infrastructure improvements across the country. The vision for the Strategy is to double the number of people cycling in Australia over the next 5 years. With the obvious positive environmental and health benefits of cycling, it would seem this goal is within reach.
Even with all of these positive indicators for the industry, traditional bicycle retailers have still experienced mixed results over recent years. Overseas and local online retailers have performed the best in a rapidly changing consumer market which has seen innovative and progressive retailers succeeding while traditional retailers have been left behind.
About 99 Bikes
99 Bikes is a multi-site retailer selling bicycles, bicycle repairs and parts & accessories, with the vision of improving the health of their customers through physical exercise. The first 99 Bikes store was opened in Milton, Brisbane in 2007 by Matt Turner with a passionate team of just four staff keeping the business open seven days a week, twelve hours a day.
99 Bikes has grown rapidly and now has 32 stores across Queensland, New South Wales and Victoria, plus a thriving Webstore.
Matt continues to drive the business forward with passionate sales people, skillful mechanics and exciting products. In an extremely competitive market and, thanks to the internet, highly educated customers, Matt understands the need to provide his customers with the products they need each time they visit one of his stores. With thousands of line items in each store, Matt’s focus is on optimising the best mix of products, from new bicycles all the way through to the smallest accessory.
Challenges faced by 99 Bikes
Motivating Staff To Increase Sales
Matt wanted to build the 99 Bikes business model around the Flight Centre model, an extremely successful brand started in 1981 by Matt’s father, Graham Turner. This involved a heavy focus on the motivation of Sales staff and the careful management of their performance on a daily basis. Matt needed to benchmark each staff member against their peers to develop a friendly yet competitive environment which would ultimately increase the sales revenue for each store.
The existing Point of Sale software did not allow senior managers to monitor staff sales performance in a dynamic way, which was ultimately reducing the performance of the entire business. According to Matt, “We were relying on keeping sales people motivated and they needed to see in real time what all of the other sales people were doing in other stores.” Information from the existing local store based, static Point of Sale system was delayed and often corrupted due to the polling of data, leading to a lack of control over this vital management tool.
Controlling Stock Over Multiple Stores
The rapid growth of 99 Bikes naturally lead to an ever increasing volume and complexity of stock lines in all stores. The stores were having to manage thousands of stock lines in a variety of categories in a very busy and dynamic environment. Staff needed to be motivated to meet and exceed their sales targets, so being able to see which stock was available in each store was mandatory, given that being able to fill a customer’s order may mean the difference between the Sales person receiving a bonus or not. The existing Point of Sale system did not show live stock levels in other store locations. This lead to a heavy reliance on Sales staff making phone calls to other stores, leading to a disruption in the customer service process, something which went completely against the culture Matt was promoting at 99 Bikes.
Software To Grow With The Business
Another result of rapid store expansion was the need to hire additional staff. Matt needed a Point of Sale system that new staff could quickly and easily learn, in order for these staff to begin serving customers and selling products as fast as possible. Above all, Matt needed a fully scalable system that added value to his business, as he had always expected and demanded rapid growth for the group. New stores needed to be operational as soon as possible after a new site location was secured and the existing Point of Sale software could not provide this flexibility.
In addition, Matt’s management of the multiple stores in the group was being hampered by his inability to see live, real-time information about the critical aspects of the business. With this information not readily available when he needed it, Matt was tied to the physical stores, something which was proving harder and harder to maintain with the geographical expansion of the store locations.
Why 99 Bikes chose Retail Express
Real-time Tracking Of Sales Performance
Using Retail Express, the Sales staff in all 99 Bikes stores can now see in real time exactly how other Sales staff are performing against their sales budget. This has had a direct and measurable impact on the revenue generated by each 99 Bikes store. “It means we can now run competitions and sales rewards which lead to improved sales revenue from our staff,” says Matt. Utilising the latest cloud-based technology, Retail Express delivers live, uncorrupted information on all aspects of 99 Bikes business. As a sale is made in any store location, this transaction can be seen instantly by all other authorised system users based on ‘user profiles’, meaning the benchmarking of Sales staff performance is a dynamic and fluid function.
The single central database easily manages data from all store locations and delivers comprehensive reporting to authorised users via the inbuilt dashboard or through reports which can be run at anytime from anywhere.
Simple And Powerful Stock Management
99 Bikes needed a robust and flexible inventory management system to take care of their ever expanding stock holding in each store. Matt says that since implementing Retail Express, the business has seen a considerable improvement in the way that stock is purchased, received and more importantly transferred between locations. “We have become a lot more efficient in receiving stock and keeping track of stock. It’s definitely very user friendly,” says Matt. The re-order function within Retail Express uses intelligent algorithms and takes many different factors into account to recommend the optimum level of each product to order, such as supplier lead time, stock on hand in other stores and average sales volumes. If needed, Sales staff can transfer stock between stores rather than purchasing new stock, leading to a reduction in wastage from over-stocking and significantly improved cash-flow. Stock optimisation typically improves the financial return on stock by as much as 8%.
The cost of administering stock within 99 Bikes has greatly decreased since using Retail Express. The automated nature of many processes within the software means that stock can quickly and easily be replenished either from an external supplier or from another store location. Sales staff can fulfil a customer order at the Point of Sale, requesting the product be fulfilled from another store location in the group. A sales order is then automatically sent to the despatching store by email, with the product being picked and despatched immediately and delivered to the customer’s home. This helps to keep Sales staff in front of customers, rather than behind the counter processing paperwork.
A Fully Scalable Platform
Even with the comprehensive capabilities of the Administration functions within Retail Express, the system remains easy and logical to use. Retail Express has been developed over many years of listening closely to feedback from retailers using the system. As a result, each area of the software has simple to use functions and is backed up by over 50 online video tutorials should any staff require a refresher on a specific aspect of the software.
[blockquote]“We had 60 or 70 new staff join the business in two years and they all had to learn the system. We highly value something that people can pick up quickly,” said Matt.[/blockquote]
Setting up new store locations in Retail Express takes significantly less time than traditional software systems which require on-site technicians to install locally based software. The cloud-based platform used by Retail Express means a new 99 Bikes store location can be deployed in as little as 48 hours, with no need for on-site visits. Due to the cloud-based platform, the software is also perfectly suited to off-site Pop-up stores should the situation arise.
Matt says he was pleasantly surprised to find such a powerful and effective system met the price point he was looking for in a software platform. 99 Bikes currently operates 11 store locations with over 70 staff. Matt can access information on any of his 11 stores by simply logging on to his system using a standard web browser. This means that managing his business is a dynamic and fluid process, with challenges able to be dealt with as they arise rather than at the end of the day or week. “It’s definitely a great financial investment. It still surprises me how much value it is as a system compared to others on the market,” said Matt.
The future for 99 Bikes
99 Bikes shows no signs of slowing down, with new stores regularly being opened in various locations across the country. The innovative nature of the business means it is positioned perfectly to take advantage of the growing popularity of cycling in Australia. As 99 Bikes grows, Retail Express will grow with the business. According to Matt, “Retail Express is something we rely on now and will continue to into the future.”