Case Study: B & L Bike Shop, Davis, California

“We have worked very hard on redesigning the flow of the store and on customer service.  Everyone shopping for a bike will go through our process.” 

- Beth Annon-Lovering, Owner. 

The core of B & L’s success is the owners vision and values.  As Beth Annon-Lovering will tell you, B & L stands for her vision “Bicycling and Loving it.”  Davis California is a very bicycle friendly community, and was recently given a Platinum award as the most bicycle friendly city in the country by the League of American Bicyclists.  However, with this said, Davis is also a highly competitive, and stagnate bicycle market.  There are no less than seven other bike shops within walking distance of B & L’s location. 

In this highly competitive market B & L has increased total revenue by 113% and net pre-tax profit by 328% from 2004 to 2005!  What is even more intriguing is the fact that B & L carries none of the top three bicycle brands!  This means that B & L’s growth came, primarily from the seven other bike shops that are within walking distance, and the other retailers of bicycles in the market area … some of whom are carrying the top three bicycle brands.  It is readily apparent that Beth Annon-Lovering has established B & L Bike Shop as a preeminent brand in the minds and hearts of her clients.     

T.H.: Please describe your store. (Layout, square footage, location, et cetera)

We are located in the Downtown of a University Town, just 15 miles from a major metropolitan city. The retail square footage of the store is 2500, with a repair area of 500 square feet. We have 300 square feet of upstairs for storage and offices.

T.H.: How many employees work for you? (Full time, part-time)

Three full time and eleven part time employees.

T.H.: Please describe your market. (Population, socio-economics)

A family bedroom community with a population of 60,000.

T.H.: Please describe your client. (Families, enthusiasts, juvenile)

We have a large young family population but also the mix of the University students and faculty. We cater to the family market and enjoy the benefits of 30,000 students each September.

T.H.: What brands do you carry?

Jamis, Hampton Cruisers, Bianchi, Electra, Breezer, KHS, Manhattan, Free Agent and Redline.

T.H.: What was your business like five years ago compared with today? What changes have you made? What changes are you still making? Are there any other changes that you are going to implement?

We have grown from $650,000 to $870,000. We worked very hard on redesigning the flow of the store and on customer service. We implemented ClientCare and Body Scanning CRM. We consistently work on improving customer service and for 2006 we are going to have a staff session to define our Vision and Mission and create goals for every level of staff to work towards obtaining.

T.H.: Do you track closing rates? If so, how do you track it and what is the rate?

We track closing rates through the Body Scanning CRM system. Our current closing rate is 48%.  In 2004 our close rate was 33%.  The increase in close rate has directly contributed to our increase in both revenue and profitability. 

T.H.: What is you biggest contributing factor to your success?

Defining our market and adjusting the inventory to fit our market, getting the high-end money hog inventory out since it didn’t fit with the demographics of our market.

T.H.: Where do you see your business five years from now?

Maintaining steady growth that corresponds to the growth of the community along with the growth of household turnover.

T.H.: Please describe your sales flow (process) from the time a consumer comes through your door to the time the leave.

When a customer comes in we greet them and start a conversation with them, if they are looking at bicycles we bring them to the Body Scanning CRM area and scan the customer, while asking the questions needed to complete the Body Scanning process. We get a very good idea of what type of bicycle will best fit the needs of the customer, we then pull out our first choice of a bicycle for them, adjust it to their measurements and send them out on a test ride.

While they are out on the test ride we find a second bicycle and have it fit and ready for them as they return from the first test ride. As we close the sale we outfit the bicycle with the accessories necessary to get the customer riding comfortably and safely. We explain the 2 levels of Client Care, which started with the Body Scanning and finalize the paperwork.

The bike goes into the repair area for accessory install and we give the customer the time frame needed to pick up their new bicycle. When the customer comes to pick up the bicycle we go through the uses of all their accessories and show them how to shift, brake and undo the brakes for tire removal.

T.H.: Would you be willing to disclose your margins?

48.5 Gross Profit for 2005.

T.H.: What is the average selling price of a bicycle in your store?

$300.09

T.H.: What do you do for staff education?

We do monthly training meetings and online training with Growth Cycle.

T.H.: How do you market yourself?

Mostly through word of mouth, but we do a little newspaper advertising, email marketing and currently a once a year mailer, but we are going to do a couple more mailers this year as the one we currently do is very successful.

T.H.: Do you consider your store your brand?

Yes – we carry second and third tier bike lines so we NEVER advertise the brands we sell as who we are, B & L Bike Shop is the brand and we stand behind the brands that we happen to sell.

T.H.: Do you actively use your database that is generated by Body Scanning?

Yes and No I guess would be the answer here, since our POS system syncs with Body Scanning CRM and we use our mailing and email data base from the POS system for marketing then the answer would be yes, but not directly from the Body Scanning CRM data file.

T.H.: Where do you see the industry five years from now?

I see the industry condensing by at least 20% - loosing small independent stores in larger markets as the industry big players convert to theme stores of their main suppliers and loosing small suppliers that can no longer compete with the freight benefits and pricing of the larger suppliers.

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Interview conducted by Tad Hylkema and case study written by Tad Hylkema with excerpts taken from a case study by Mike Basch, CEO of the YaYa! Bike Cooperative.