When Ryan Zagata moved to Brooklyn, bicycling became his main mode of transportation to explore and expand the radius of his community. Focused on urban mobility, Ryan launched Brooklyn Bicycle Co. to bring the ease of commuting with bikes to urbanites. In this episode of Shopify Masters, Ryan shares the lessons learned from his showroom, managing a 600% year over year growth, and the importance of feedback.
For the full transcript of this episode, click here.
- Store: Brooklyn Bicycle Company
- Social Profiles: Facebook, Twitter, Instagram
- Recommendations: NetSuite ERP, Candy Rack (Shopify app), Judge.me (Shopify app), Klaviyo (Shopify app)
The infrastructure behind 600% year over year growth
Felix: You decided to start this business after moving to Brooklyn, what inspired you to start this business?
Ryan: In 2008, we were looking for a home to start a family, and anyone who's familiar with New York knows that the economics of finding a multi-bedroom home in Manhattan doesn’t make a lot of sense, so we started looking to Brooklyn. We left Manhattan kicking and screaming. Within about a week of moving here, we realized it was the best thing we could have ever done. We were really embraced by the community, and for me, the community was probably a 10-block radius of where I would walk to a local coffee shop, a local gallery, or a local restaurant.
After living here for about a year, I was looking for a bicycle because I wanted to expand the radius of that community. For me, I never looked at a bicycle as being something I would race on. I'm not into mountain biking. I do some road biking, but it wasn't really about the bike itself as much as it was about expanding the radius of my community. The bike just happened to be the way to do that.
It was about experiencing the community. About giving people an opportunity to expand further, to learn about new cafes, new galleries, new public spaces to take our children. That was 2011. Fast forward to today and we have 450 partners that carry our bikes. We focus exclusively on urban mobility, so we design and manufacture bicycles focusing exclusively on urban mobility, and we have two channels. The ecommerce platform where we leverage Shopify, and we also have a wholesale brand where we have about 450 partners in the United States and Canada, distribution in South America and Europe.
Felix: You mentioned urban mobility, can you speak more about that?
Ryan: We're in a unique time right now with the global pandemic, so it's actually taking on profound new meaning for everybody, but how do you move people in and around major metropolitan areas? More and more, people are turning to bicycles. If we were doing this podcast a year ago, we would have all sorts of hopes and aspirations that the city would continue to increase and enhance infrastructure, not just in New York but in every major metropolitan area.
"We're in a unique time right now with the global pandemic, so it's taking on a profound new meaning for everybody. How do you move people in and around major metropolitan areas? More and more, people are turning to bicycles."
Earlier, we sold an entire season's worth of bikes between January 1st and probably about April 15th, and we had run out of bikes. This is a total phenomenon as far as bikes are concerned, and my hope is that a lot of these major metropolitan areas, these urban areas where people are commuting to and through will embrace these new commuters, really throw their arms around them and help them to feel safe and continue to look at bicycles as a way of commuting around the city. It certainly makes economic sense and I think a lot of people are going to be reluctant, again, not just in New York, but every city to jump back into public transportation.
Felix: A year's worth of sales in one quarter. What was the exact reason that you saw that huge spike in growth over the first quarter of the year?
Ryan: I'd love to pat ourselves on the back saying we're doing a tremendous job, and as a team, there are certainly some things that we've done and focused on that have moved the needle substantially. But by and large, this is a little bit of luck, being in the right business at the right time. You have three phenomena going on, here. I spoke to one, which is public transportation, but the other two also played a big hand, one of them being that every fitness studio, gym, spin studio, pool in America has been shut down. People are looking for a way to exercise and get out of their house when they're on lockdown. Then, the other one is that people in suburban areas are looking for some form of recreation with their families. Playgrounds are shut down, parks are shut down, beaches are shut down in many areas, amusement parks, water parks. It seems like there's not a lot of opportunities for children to get out and do things. Bikes have satiated that need for people to get out and have some recreation.
Those three phenomena collectively, hitting simultaneously here in the United States. The federal government also set out some money to some individuals who are below a certain income level, and we certainly saw a spike there, but by and large, it's just those three phenomena: recreation, fitness, and transportation coming together simultaneously. I don't want to take away from what our team has done to really help grow the business. We've certainly busted our butts to get in front of a lot of magazines. We feel quite confident about our product and the quality of the product and the service that we deliver, so we really put ourselves out there to have the bikes reviewed. I don't think you can type "Citi Bike" or "commuter bike" without us showing up on one of those lists, and hats off to our team here, our marketing team, for really working their butts off to get our bikes out there in front of people. Just having the confidence that we put out a good product and letting it speak for itself.
Felix: How do you plan to extend this demand given the newfound interest in buying bikes for commuting and for exercise?
Ryan: I think there are going to be some long term benefits. Of those three phenomena, I referenced, commuting is probably the only one that's going to have legs. Some of the people who are buying these bikes for recreation, 12 months from now, they may be sitting in the garage collecting dust. I certainly hope that's not the case, but there's a strong possibility. As far as commuting, we're taking it upon ourselves, working with some advocacy organizations; People For Bikes, Transportation Alternatives here in New York, and just really trying to get in front of people who make the decisions in major metropolitan areas that there are so many new people on the road.
We put around 10,000 people on the road in New York alone earlier this year. How do you embrace those people? How do you make them feel safe when the city kind of "gets back to normal?" How do you make sure they feel safe? How do you help them commute without feeling that their lives are in danger? There are things that we can control, but there are things that we cannot control, and that being the infrastructure in place. A lot of what I'm spending some time on now is speaking to local council members here in New York City, writing to council members and mayors in other major metropolitan areas and Department of Transportation commissioners in major cities and just encouraging them to do the right thing, make their city more livable. It makes economic sense. Less vehicular traffic makes a city a great place to live, so I've put on my advocacy hat now that we've blown through a bunch of inventory.
I'm also mindful that we're losing a ton of opportunity now. Every day, we're getting tons of traffic, but also, probably 20 or 30 phone calls. Frankly speaking, it would have been pretty cavalier of me to have some aggressive forecast and buy three or four times the number of bikes we would traditionally sell in a year. If the pandemic didn't hit, it's like predicting an earthquake. We would have been bankrupt. It's certainly disappointing to not have bikes to fulfill a lot of the demand that's out there, but the other side of the equation is equally as important. Who knew this pandemic was going to happen? I think a lot of people would have done things differently, but if we had gone all-in and brought in a ton of bikes and nothing like this happened, this would be a much different conversation.
Felix: How did you deal with the logistics? What was that like when you started seeing these bikes fly off the shelves at four times the speed?
Ryan: Speaking specifically to the month of April, we were up 600% year over year. That month alone we were doing 7X the number of units we were doing last year. We were quite fortunate earlier this year. We opened up a little operations center in the Philippines, so we have some team members there who are helping us. We staffed up a little bit here in New York as well. Everyone's working from home, so we're able to capture a few operational efficiencies by people not having to commute each way, so we picked up some wins there. We really rely on our partners. We rely on the 3PL, the third-party logistics warehouses that fulfill our bikes and we are in communication with them every day of the week, "What are your plans? What happens if someone gets sick in the facility?" Really understanding what can go wrong here. In 2018 we opened a physical showroom in Greenpoint. We brought a lot of bikes into our showroom and left them there in case something happened with our warehouse. We had like a trauma center and said, "What could possibly go wrong? What can we do in advance of it going wrong to circumvent that should something go wrong?" Most of it was logistics.
"Speaking specifically to the month of April, we were up 600% year over year."
We also did a post-trauma, so once we ran out of a lot of inventory, we looked back and said, "All right, what happened here? What did we do right? What broke? How do we prevent that from happening again?" We implemented NetSuite as our Enterprise resource planning (ERP) in 2018, and It's been an awesome solution. We have been taking baby steps, but more or less overnight, we dove right into NetSuite and started leveraging a lot of the power to help communicate with our customers, let them know when they can expect their deliveries, and when bikes are going to be back in stock. Communicate with our wholesale customers, let them know when bikes are going to be back in stock. Having that infrastructure in place was great, but being able to flip those levers and turn different parts of the solution on in a very short order was also helpful.
Lastly, the Shopify infrastructure that we have in place and how it plugs into everything, really that was probably the biggest one for us. How easy it was for us to go and update our customers or snap in a pre-order app, for example. How do we keep our revenue flowing even though we don't have products to sell? We started implementing things like a pre-order app and other applications to inform people when things are going to be back in stock. We use some different mapping applications on the platform, so how do we let people know who has inventory? Who doesn't have inventory? Just really relying on all of the infrastructure that we had in place, and most of it being technology, to keep ourselves above water. It was overwhelming to say the least, and I don't anticipate we're going to see that level of growth, but organic growth begets organic growth. We feel confident we put out a good product. We give great experiences to customers and word travels fast.
Six or seven years ago when we were more in our infancy, not a lot of people had our bikes. There wasn't a lot of word of mouth out there, but when you're putting 10,000 bikes, 20,000 bikes a year out into the street, people talk. They have a good experience. They tell their friends who are looking for bikes, "You should get a Brooklyn," and that's really been a big source of traffic for us. Most of our web traffic now is organic, predominantly from “best of” lists. We had a pretty aggressive campaign over the past few years to get our bikes out in front of major publications, The New York Times, Bicycling Magazine, Cool Running, a lot of different publications out there who do bike reviews, Forbes, and Business Insider. Just sending products, letting them come to the showroom, test ride our bikes, experience our Buy and Ride program. Bikes are a little bit different than many other products that you sell online in that they're big, they're durable goods, and they require assembly, and arguably, professional assembly. If you simply send someone a bike and say, "Good luck putting it together," two things will happen. Number one, most customers are going to have a pretty bad experience. Not many people are excited to get a bike in a box on their front porch, and certainly, we don't want the liability of someone self-assembling the bike with their friends over a bottle of wine on a Friday evening.
Creating a mutually beneficial Partner Program for distribution
Felix: It's not Ikea furniture.
Ryan: Yeah. What’s the worst thing that happens if you assemble a nightstand incorrectly? It's a little bit wobbly, right? That's something you can probably live with. If a bike is assembled incorrectly, you can roll into traffic, and the best thing that might happen is you'll fall off your bike. The worst thing that can happen, let's not even go there, but there are consequences.
One of the challenges that we faced early on in the business was everybody wanted to see the bikes. It's not like Nike sneakers that are everywhere and your friend has them. We didn't have the scale yet where our bikes were out there in the public domain. Everyone wanted to see and touch and feel the bikes, so simply throwing up a website and selling bicycles wasn't really the solution. We had to go out in stores and look for partners who would stock our bikes or at least put them on their floor for people to test ride. Everyone’s calling, "Where can I try your bike?" I'm just like, "Why do you have to try a bike? It's a bike."
That was an ignorant thought on my part, but it really pushed us in the direction of, "How do we get the infrastructure in place where people can touch and see?" That was the beginning of our wholesale program, now over half of our business is wholesale. We have a Buy and Ride program, so every single bike purchased on our website is shipped to a bike shop for professional assembly. That's baked into the price. Nobody's paying for shipping, nobody's paying for professional assembly, and it's also good because these bike shops are getting a new customer walking in their door who will pick up a bike, but then they also turn around and buy a helmet, buy a lock, buy a bell.
Of the 450 partners that we have that do assemblies for us, over half of them have become dealers through the Assembly Partner Program. They learned about us through assembling our bikes. They liked our customers, they liked our product, and now they subsequently are stocking our bikes in their showrooms. It's been a great source of wholesale business for us as well to put our bikes out there.
Felix: While setting up this supply chain for customer testing, were you doing anything to overcome some of the hesitations your prospective customers had before purchasing?
Ryan: The biggest thing for us that we continue to do to this day is to make ourselves infinitely accessible. Everywhere you go on the website, something's going to pop up, "Call us, chat with us, set up a concierge." We hadn't done this at the time, but one of the things that we also implemented is people can do a video call in and we'll walk them through our products. We're about to start taking advantage of Shopify's 3D, so you can actually do a VR and drop a bike in front of you. You can walk up almost as if you're there, so we're taking advantage of different technologies.
In the very near term, it was just scheduling phone calls, consultations with people, and walking them through, understanding what their needs were. You walk into a bike shop and they're going to push the first bike they see at you without asking too many questions. I tell the team that we're very much like doctors. It's our job to diagnose what these people need, ask the right questions, and then prescribe something to them. The example I always give is to imagine if you walked into a doctor and he just handed you a prescription before he even talked to you. That would be a pretty awkward way to visit a doctor if he just handed you a prescription.
The thought process here is it is our job, it is our obligation to understand what these people are looking for before we go out and start selling. People all of the time are so quick to just, "Oh, this will be great. You need this, you need this." Maybe they don't need that. Maybe they don't need our $500 product, our $450 product might work. Or maybe they need our $800 product. What sort of accessories do they need to go with it and to have a successful and great experience with the brand?
I don't want to not sell someone a lock and then find out their bike was stolen a week later, so we use solutions like Candy Rack to offer add-ons on a product-by-product basis that we think are appropriate for customers to use. To take a step back because this goes to how we got where we were from a design process, I am not of the bike industry. I was actually in technology. I sold software for many years, and prior to that, I worked in finance.
When I bought a bike and realized how it had changed my life and had the idea to start the business in 2011, I had a couple of prototypes made. I didn't know a lot about bikes, but I humbled myself and went to about a dozen bike shops here in New York City and I said, "Look, this bike, it's not my child, it's not my wife or my mistress or my friend. I don't care about this bike. All we care about is making a better product. To that end, what can you tell me? Would you carry this bike?" Without fail, they all said, "No way, I wouldn't carry this bike."
As I said before, I don't have any relationship with this bicycle. It's a widget for me. I just want to make better products, and so they all gave me feedback and I went back to our supplier at the time who was making our prototypes and we implemented those. Fast forward 90 days when our first container of bikes land and I went to some of these bike shops and they became our first four or five bike shops early on to start carrying our bikes. It was just putting your idea out there. I'm not a believer that there's really any original idea in the world. I think a lot of this stuff is just rehashed old ideas that have been rehashed based on what today's circumstances are.
Nobody's singing NDAs and this is a bicycle, so there's nothing overly crazy about it, our commitment as a team was to put the best product out there as we possibly can. Not being from the bike industry has helped me infinitely just by not ignoring a lot of the original ideas of the bike industry and focusing on what I thought would be appropriate. One way it certainly posed a challenge is that I didn't know what constituted a good bike or a great bike or an amazing bike. That's where we set out to design our product by just putting these in front of everyone we could possibly get in front of in the industry.
They were really receptive and the unplanned effect of that is we ended up getting some early customers who did end up putting our bikes in their showroom or buying some to sell to their customers, so it ended up working twofold.
Accepting imperfection and refining products overtime
Felix: Your ability to divorce yourself from the product gave you more honest and valuable feedback. Any advice for anyone out there that is really married to their product and has a hard time taking that kind of advice when it feels like it is their baby?
Ryan: Three years ago, I saw somebody riding our six-year-old bikes, so I was happy it was still in the street, but we had gotten so much better as a brand. Our products were so much better, our QC was so much better. Our fulfillment was so much better that I wanted to do right by this guy. He'd been supporting us or riding his bike for six or seven years, so again, I was delighted that it lasted, but I knew that we could do better. I don't know if embarrassed was the word, but I was more or less like, "I want to do right by this guy."
He's been riding this bike that probably wasn't the best bike we could have put out there, but again, we wanted to get to market as quickly as possible and our way of getting to market quickly was going to these bike shops, taking that feedback, and putting it out there. Subsequent to that, we've made boatloads of improvements based on customer feedback. My advice would be: acknowledge that somewhere along the line you're going to put a better product out there, by marrying yourself to your original product and thinking that's going to be the end of the world, that's a losing proposition.
"My advice would be: acknowledge that somewhere along the line you're going to put a better product out there, by marrying yourself to your original product and thinking that's going to be the end of the world, that's a losing proposition."
We’re always in the pursuit. As a brand, there's three different ways you can compete. You can be the least expensive of something, and you could be the best of something. Those are two ways, the cheapest or the best, and I find both of those ways to be fleeting because anybody can undercut your price. There's always someone willing to go out of business to sell more of something. It's inevitable. It happens. Look at the bankruptcies right now. There's always someone willing to drive themselves out of business to show an increased top line and completely disregard their margins.
There's always someone who could put a better pedal on a bike or a better handlebar or better grip or a better saddle, from a “we make the best” perspective, that's also a little bit of a fleeting thing to keep trying to one-up the next company. For me, the way I have always been taught to compete is by being different. That's something that nobody can replicate. If you're different, if you give someone a different experience if you care about somebody. We give a damn about what their experience is, we do very much care about everybody's experience genuinely.
"The way I have always been taught to compete is by being different. That's something that nobody can replicate."
I don't want to go to bed at night knowing that somebody got a bike and had a bad experience at a shop. I can't prevent every bad experience out there, but when someone tells them they had a bad experience, we can certainly drop what we're doing and make it right for them, so that's something we also spend a lot of time doing. Inevitably, it becomes fewer and fewer, but people have a bad experience. A lot of times it has to do with an assembly partner who may have hastily put a bike together. How do you make amends on something like that? That's a long way of saying don't be married to your product, and a couple of other tidbits in there.
Felix: When you were in pursuit of product feedback, why did you go to the bike shops instead of going to the end customer?
Ryan: It would liken it to if I was creating pots and pans. Do I want to go to someone who cooks at home? Or would I want to go to a professional chef who knows pots and pans inside out and probably will make a much better story when you go to market? I wanted to go to experts who aren't just necessarily riding bikes, but also they're the one who see when these bikes come in. If somebody purchased a bike at Target or Walmart or a $79 bike online, they're the ones who see these bikes when they come in. They see a lot of the missteps that brands have made.
I was like, "Well, I would rather go to a bike shop who is repairing these things subsequent to somebody purchasing and doing at-home assembly of the bike. What are they seeing with these products? How do we avoid those from the jump?" That was my methodology, "Let's go to someone who is servicing this product, who's working with this product day in and day out as opposed to someone who may be riding it, because someone who's riding a bike may want to tell me, "Hey, you know what? You should get a really nice saddle and really nice grips."
Those are important, but let's not forget that a bicycle is a functional machine. It needs to roll and stop and go slower and faster and keep you safe and do a lot of different things at once. It’s not something that just needs a visual appeal to somebody. If you see our website, you know we focus a lot on visual appeal, but that's something we can do on our own. This is a functional machine so I want to go to someone who knows this machine inside and out, and that's why we went to the bike shops.
Felix: Let’s talk about the design process, how did you begin designing the original prototype?
Ryan: Hindsight is 20/20. Would I have done a bicycle again? Who knows? We're having a lot of fun now, but that's certainly a very valid point. The seed was planted in 2008 when I moved to Brooklyn, but the light bulb didn't really go off per se until 2011 when I was traveling in Vietnam and everyone around Ho Chi Minh City was riding around on a bicycle, and not just for transportation, but they were vehicles where they were carrying cargo and they had stacks of wheat or linens or packages, whatever it was they were working with, stacked up on the back of their bike. I looked at my wife at the time and I said, "That's the exact bike I wanted."
Before we had even left Vietnam, I was just online Googling bike manufacturers. There happened to be a very small bike manufacturer here in Brooklyn. I was ordering a prototype before I even left Vietnam literally, so we had our first prototype quite quickly, and that's where we ultimately ended up bringing that around to bike shops. It's finding someone who could put together a prototype for you. It's very easy to show sketches and drawings and things like that, but I find it much easier if you have something tangible, even if it's not perfect. There’s a saying out there that I use all of the time, "Done is better than perfect." Having something tangible to bring to someone to show someone is always going to be much better than showing someone some sort of digital 3D model.
Not being from the industry, really relying on the supplier to tell me what will be important here, what will be important there, and then having the humility to go to bike shops and say, "Look, I don't care about this product with the exception that I want to make it better." That was phase two of that after I had the initial prototype built.
Felix: Once you had that initial prototype built, how long did it take before you had a version that was good enough to go to market or into production?
Ryan: Yeah, great question. We set up the LLC in February of 2011. The prototype was April of 2011, and our first container of bikes was late August 2011. I happen to be married to a publicist, and when I told her I was going to start a bike company, she said, "Who cares? There are a million bike companies out there. Who cares? What's different? What are you going to do differently?"
That really helped me to step back and say, "We need to think about, 'What's going to make us stand out as a brand? What is going to be our story as a brand?'" That was something that really has always stuck with me when we're designing new products when we're implementing something when we're opening our showroom. Are we going to give a different experience? What are we going to do differently?
"What's going to make us stand out as a brand? What is going to be our story as a brand?"
Those words that she spoke to me have always resonated with me when we're designing something. It's like, "What's newsworthy about this? What are people going to care about?" If we simply put out a new color of the bike and all of a sudden we have a green bike and now we have a blue one, that's not newsworthy. You want to do something different and move the needle and push it. For me, it’s really stepping back and thinking, "What's different about what it is that we're doing that would make this newsworthy and appeal to people?"
Felix: Is there some research process that you go through to understand what is something that's newsworthy to put out?
Ryan: We have what I would call a secret sauce, and that's our showroom. Before this, a lot of it was talking to people in the industry, talking to all of our dealers. We do a lot of customer surveys. We don't just survey customers who bought bikes. To be frank, a lot of the best feedback is from people who didn't buy our bikes. What we've learned is obviously there's a lot of bike brands out there that we compete with, but we compete more with somebody not buying anything. They don't buy any bike as opposed to somebody buying a bike. We don't lose to another brand as much as we lose to somebody not buying anything.
When I talk about the secret sauce, we opened a showroom in Greenpoint in Brooklyn here in 2018, and the first thing I said to the team is, "Look when someone walks in those doors, it is a win, whether they buy a bike or a helmet or they buy nothing at all. It is a win. It is an opportunity for us to watch them interact with our product." We had been a wholesaler and an E-commerce brand. I don't really get to see very often people's first experience with our product, and I would imagine a lot of E-commerce brands are the same way. You ship somebody something, you don't get to see them unboxing it, you don't get to see them using that pan or that knife or putting that hat on for the first time.
We opened our showroom in 2018, it was, "This is like a flood of changes as far, as what do we do for product improvement?" It's a win when someone walks in because we're learning from them. I'm watching, "What do they grip first on the bike? What do they look at first? What are the top 15 questions that people are asking? How do we answer those questions?" Now, our website is really an extension of our showroom. It's like an online showroom. We'll do, as I mentioned before, virtual showroom visits, lots of different things. The showroom is really, "How do we take this showroom experience," so we have probably 60 or 70 five-star reviews from people on the physical showroom, "How do we take that experience we are giving people in the physical showroom and bring that over online?"
We rely on a lot of tools for that, but to me, that is our secret sauce now in what we're designing in our new product pipeline. We’re very quickly now learning what's missing from our portfolio that probably would have taken us two or three years to learn before from speaking to our dealers because they're sourcing those products from other brands. Now, when people come into our showroom, our brand is the only one on display. It's very quick to see, what are the gaps in our portfolio that people are continually asking for?
It’s a great place to visit. We have a bar card. We have a great music system. We have a playlist that we jam out to in there. We have our design studio, so people can see how the bikes are designed and meet some members of the team. While we sell bikes through there, we only fulfill through our partners, so we don't send anybody out of the showroom with a bike, but selfishly, we are learning so much about our consumers, what they're looking for, what we don't have, what we do have, what other brands they're looking at.
It's been a tremendous asset, far exceeding anything we could have ever expected by opening up that showroom. With the pandemic, there's going to be some opportunities for us to open up other showrooms in major metropolitan areas across the country and that's something we're starting to look into.
Integrated quizzes for lead generation and product development
Felix: If anyone out there doesn't have a showroom or maybe doesn't have the means to get one, are there ways they can replicate this online to get feedback from people that specifically didn't buy?
Ryan: For people who don't buy, there's a couple of things we do. One of our biggest lead generators is a quiz to help people find the right product in our portfolio. Bikes can be a little bit confusing. Not everybody knows a lot about bicycles, so we try to be very educational, but we do offer a quiz. Three questions, quick quiz. What style bike are you looking for? What's your terrain like? That’s a huge source of inbound leads for us.
They get our newsletter, they fall into a little bit of a campaign early on to onboard them and introduce them to the brand and give them some educational information and share more about us. Just again, trying to be generous as possible. Whether somebody buys our bike or they don't buy our bike but they use us to learn more about bikes, at the end of the day, it's all a means to an end.
What they did do is people who are guided toward a certain bike, we capture that. Felix is guided towards this Bedford model, which is our Citi model. Six months later, Felix didn't buy that, so we'll send you a survey and say, "Hey, we noticed you didn't buy this. If you're interested, we'll sell you this free set of lights if you end up buying it." If you didn't buy we'd still love to send you some lights if you bought another bike, but just let us know. Here are three questions. Would you mind taking a second to answer that?"
We get pretty good feedback on that, and it costs us whatever a set of lights cost us, but at the same time, the information you get from people who didn't buy a bike is invaluable. That surveying people, capturing the leads, and then also, how do you find out when people don't buy your product, what they did. Did they buy something else? Are they still saving up for it? We got all sorts of answers.
The pandemic has forced people to evaluate their business and do things in real-time instead of plotting and testing. Our virtual showroom visits have been phenomenal. I have a little stand there. I set up a camera. I stand in front of the camera. Someone gets a Zoom link and I walk them through our models and I ask questions. I get on the ground. I'll pick up the bike. I'll move the camera into the bike. I'll sit on the bike to let them see the riding posture of the bike.
It doesn't really cost you anything other than your time. And it instills in your customers the fact that you give a damn about them and you want them to have the right product. At the end of the day, if it's not the right product, that's fine, but it provides that same experience I mentioned before. You're getting to understand, what are their questions? What are their concerns?
Then, you can go back and edit your website to make sure you're addressing those because a lot of people aren't going to call, but you better believe they're going to have the same questions that that person on that virtual visit had. It’s a good opportunity also to expand upon your FAQs or your product page, what information you're putting forth there on each individual product page.
Felix: How did you know that these were the questions to ask? Obviously, it's to help recommend a bike, but does this data help the business in any other way?
Ryan: At the end of the day, we aggregate all of this data, so we start to see like, what's the demand for different height ranges? What's the demand? What's the terrain like? Do we need to offer bikes with a wider gearing range? Are we offering bikes that have too many gears? It really helps us to go back and see based on all of these people. Then, we try to capture where somebody is so we can start saying, "Hey, we're seeing a lot of demand in this metropolitan area. We don't have a showroom partner there." That also becomes part of our pitch to bike shops in those cities. "Hey, we've seen a sevenfold increase in traffic in the Los Angeles Metropolitan area and we only have two partners there. We'd love to run out of our portfolio and pick up somebody in Orange County or over in Santa Monica or Downtown Los Angeles."
There's a couple of things that that data helps us to pick up. We continue to refine. The team, we always say, "We're never done." We're always looking for more opportunities to expand the quiz. I know now we're having another quiz to help guide people toward the right model and the right size. Before we'd recommend bikes based on your particular riding needs and what sort of style you're looking for, but now, we're going to take that into consideration along with some other information, not just given to the model but also saying the model and size, so we're trying to take it a step further.
Felix: Are there any examples of changes you made to the website that was based on the survey feedback that resulted in a noticeable difference in sales?
Ryan: There are two things. One of the other huge things that we do is there's an app called Post-Purchase Survey that we use, and it really gives us insight into where our strengths lie, how people are hearing about us. One of the things that we've learned, we use judge.me for reviews, is that 60% of our customers in these Post-Purchase Surveys are suggesting that the reviews are what ultimately led them to purchase. What we try to do is emphasize the reviews higher up on the product page. Even the reviews now can be found above the fold on our product pages.
"60% of our customers in these Post-Purchase Surveys are suggesting that the reviews are what ultimately led them to purchase."
Those are some things that we've done. Specific to height, that's a big question, so we have a couple of pop-ups now, very early on above the fold on the product page that helps people find the right size. The other thing that comes up a lot in these quizzes is people saying, "We don't have enough gears?," or, "How do I get my bike?" We hit people over the head with our Buy and Ride program, which is how we ship the bike to a local bike shop. Even though we have it all over the website, we still get questions. "How am I going to get my bike. I don't know how to assemble a bike." You can't go to our website without seeing references on every page to our Buy and Ride program, but we still continually look for ways of, "How do we better explain the Buy and Ride program so that nobody has any doubt or question that it's not fake news and it is not a fake promise. We are absolutely paying for shipping and your bike will absolutely be professionally assembled in a bike shop local to you."
I don't know if people just don't want to believe it or they've been burned before, but there are no falsehoods here. It's very real, so we answer a lot of questions on how our Buy and Ride program works. That's also something as I suggested, we're trying to continually refine the imagery and the wording on explaining that program to make sure it's easily understood.
Felix: You mentioned that over half of your business is wholesale, and also your Buy and Ride programs. How did you organize the infrastructure for supporting the supply chain essentially for your business?
Ryan: The Buy and Ride program is painstakingly challenging. It was one shop at a time. We’d have a sale in Phoenix, Arizona. We don't have an assembly partner. We'd get on the phone, I'd call a local bike shop. "We have a customer in Phoenix who purchased a bike. We don't ship our bikes to people's porches. Can we send it to you and we will pay you to professionally assemble the bicycle." Then, early on, we were probably the pioneers of this program. A lot of brands in the bike industry are doing it now, but early on, I've been told by a couple of shops we were one of the first ones to do it.
One by one with sales, we built out this network, and then over time we actually formalized the assembly partner program. We went back to everyone who's ever built a bike for us and said, "Hey, we're going to create a flat fee program here. We're going to pay you X amount of dollars to do that, and in exchange, we're going to try to drive more physical foot traffic to your store."
Over half of our stocking dealers have come out of that assembly partner program. We just try to continually funnel all of our sales in every major metropolitan area depending on the size of the city through one or two shops. Then, the more we continue to sell in those major metro areas, those shops ultimately will come back and obard with us.
The other thing is we operate with a lot of integrity. We don't compete against these dealers. If somebody buys a bike in Phoenix, Arizona, on our website, we ship it to that shop and we flip that sale over to that shop, so we don't turn around and try to compete against our dealers. The reference one of our dealers made when he had his first sale was like, "That was the easiest bike I've ever sold."
It was 2AM in the morning. Maybe somebody came back from the local watering hole and bought a bike online at 2 in the morning. I don't know. I don't ask questions, but I do know the bike shop was closed at 2 in the morning and we were open. They bought a bike, and that customer went to the bike shop to pick it up. That bike shop got credited with a sale and they've come back and used that account credit to purchase more products.
Felix: Are bicycles apt for repeat purchases? What is that like?
Ryan: Yeah. That's a great question. They're durable goods, so the lifetime value of a customer is we focus a lot more on getting referrals than we do on trying to sell somebody a second bike. I don't want to play in the $2,000 bike category or if somebody falls in love with biking, maybe they get a road bike. I don't want to be the brand that's going to supply them that road bike. There's plenty of amazing road bike companies out there and, frankly speaking, we want to stay laser-focused on this urban mobility. We focus a lot more on, how do we treat people incredibly well and give them a great experience? Their lifetime value can be measured through the referrals they give us rather than their individual purchases.
"We focus a lot more on, how do we treat people incredibly well and give them a great experience? Their lifetime value can be measured through the referrals they give us rather than their individual purchases."
I mentioned before we use Candy Rack, so we've probably seen a double-digit increase since we implemented the Candy Rack in up-sells. It allows us to curate up-sells by product, and up-sells, that's probably not the appropriate word. It's recommended that, "Hey, you should probably grab a lock. We love this helmet. This light set would be very helpful for you if you're riding at night." Just really some standard things you should be buying and that'll pop up, but that's been a really tremendous app for us as well. I wouldn't say it's increased the lifetime value, but it's certainly seen our average order value going up at least double digits.
Felix: You mentioned Candy Rack, you mentioned Judge.me for your reviews. What other apps do you rely on to help run the business?
Ryan: Post-Purchase Survey has been great. Everyone on your podcast uses Klaviyo, obviously. Their Shopify integration is incredibly powerful. They also carry the data over to Facebook, which has allowed us to build some really powerful Facebook audiences to retarget. We use Smart Menu by Qikify, which is great. That allows us to show images in our Mega Menu. We used to put product names in the menus, so now we use images so people can visually see what they're going to click-through because our product names don't mean anything to customers.
It really just enables better overall functionality and navigation and it gets people very quickly to our product pages as opposed to sending them to a catalog page. Tawk.to we use for our chat application. It's plenty powerful. It's free. It's plenty powerful for what we need in terms of auto-responses and also it allows us to give contextual messages depending on where a user's located. If they're in New York, we may pop up, "Hey, come visit us in the showrooms. That's also another great application.
Lastly, I think it's outside of the Shopify ecosystem. There's no app, but Outgrow is what we use for our quiz, and that's been a massive lead generator for us and it's really just allowed us to flow people into our pipeline, and whether they buy our bike or another bike from somebody else, just help us to educate them and get them on board as a comfortable consumer because, again, bikes are something that can be intimidating.
The reason a brand like us can exist is because a lot of shops, not all, in fact, there's a lot of tremendous bike shops out there, but there's a tendency for bike shops to use bigger words than are necessary with a customer purchasing a bicycle. I mean, a lot of people just want to know it's going to do what they need it to do. They don't need to know what the frame material is per se, or the 17 different types of brakes there are, or all about the drive terrain. They just want to know it's going to get over the bridge easy enough for them. A lot of our time and energy is spent doing that and Outgrow is a big part of getting people onboard onto that early funnel.
Felix: What's been the biggest lesson that you or the company's learned over the past year that you want to put into place moving forward?
Ryan: At the end of the day, we very much realized that we're not out here to save people's lives, so we try to keep it pretty lighthearted and have fun, and a lot of that comes through with how we deal with our customers and our give-a-damn mentality. We go to the end of the world to make sure our customers are on the right product, they get a great experience delivering that, and then for us, it's continuing to make sure we're telling that same story. Keep doing what we're doing, giving people great experiences, and continue to tell that story. Again, as I referenced earlier, the showroom has brought that into a physical presence as opposed to just being able to do it virtually through our website on Shopify.