Is it time for the outdoor industry to get on its bike?
25 Apr 2008

In the April 2008 issue of OCC Outdoor Magazine, Editor Simon Baseley tells readers why ActSmart might prove a valuable benefit for the outdoor industry.

Here is the full article:

In his report to the OIA last year, former Berghaus MD, Lewis Grundy, offered up the ActSmart model as a template that the OIA might adopt if it is ever to regain the ground lost in recent years. Here for the first time, Simon Baseley tells us why heeding this advice may turn out to be a sound move.

Last year the bike and motor accessories multiple, Halfords, quietly announced its plan to open a chain of small shops called Bike Hut. The stores, which can often carry little direct reference to their connection with Halfords, are not an ersatz form of Tesco Metro – Halfords already have their own version of that.

But it is a clear and unequivocal threat to the country’s 1600 or so independent cycle shops; however, in setting out to do this they face a group of retailers who are likely to prove a much tougher nut to crack than might be the case, for example, with their outdoor counterparts. And exactly why that nut will be tougher, offers up some interesting pointers on exactly where the outdoor industry might look for inspiration.

Whatever the bullshit pedalled by Halfords for not clearly owning up to what Bike Hut actually is, their circumspection is understandable. Personal experience of my own and that of my friends, suggests that the chain has an horrendous reputation for dismal service, founded in a consumer experience of indifferent and inadequate staff. And whilst it would be unsafe to bet anything on consumer sentiment, the local bike shop may still exert some measure of loyalty among existing customers.

Independent bike retailers also enjoy another important strength, in that many premium brands refuse to do business with Halfords or Bike Hut for fear of alienating the smaller outlets. That this resolve is crumpling there can be little doubt, but it remains in place sufficiently to make the small scale bicycle shop punch well above its weight. And part of the reason for that is the number of them that belong to their trade association, the Association of Cycle Traders (ACT) and through that enjoy the support and leadership of ActSmart.

From the outset one of the most important things to understand about ActSmart is that its motivation is firmly founded on sound business principles; but the profit motive central to this particular business is mutually inclusive to a hard edged advocacy and promotion of all aspects of cycling, linked to a collegiate involvement with its members. What this means is that ActSmart is driven by the need to ensure that its members are profitable and the industry sustainable and to this end it puts a considerable effort behind providing membership services that offer a real business return .

The question facing the outdoor industry is what can it gain from the ActSmart model? According to Director Mark Brown the answer to that is a great deal. Brown takes the view that the only way his organisation can prosper is by appealing to the retailer’s naked self interest. He says: We are offering them just two things. Support for their businesses, which at its simplest level can mean real and substantial savings from day one and the second thing is promoting their specialism, constantly reiterating the thing that makes an independent cycle trader different and better to do business with.

And what works for the cycle trade will, in my opinion, work just as well for the outdoor sector” Brown has no doubts that ActSmart provides a model for outdoor to follow and both he and his organisation’s confidence is exemplified and given substance by its website (well worth five minutes at www.actsmart.biz) which forms just part of the range of tools available for use by its members.

Confident he may be, but Brown nonetheless is not tempted into overstating ActSmart’s influence . “I wouldn’t dream of saying that ActSmart is solely responsible for keeping the independent cycle trade in existence. There are a number of complex factors influencing that, not the least being the importance of suppliers remaining committed to the independents. But what I do say about the ActSmart model is that it provides its members with the sense of a single strong body providing them with the same services and presence that are at the disposal of the multiples”

And lest anyone reading this should see ActSmart’s role as purely embracing the needs of retailers, Brown makes the point that what they do has just as much relevance to suppliers: “We have just saved one leading supplier more than 25% of their annual card processing charges, which they incur when processing retailer payments”.

Chris Compton has run his cycle business in south east London for more than 30 years and he knows all about fighting the competition - Halfords operates just 94 yards from his front door. He has been a member of the ACT for almost all the time he has been in business. “To me “he says “It’s straightforward. I save around £1400 a year with the deal that ActSmart has done with HSBC. I could probably try and get these deals on my own, but I don’t have the time and I wouldn’t succeed, or at least I wouldn’t succeed like they have, anyway. ActSmart are now working to come to agreements with the utilities and no doubt there will be savings to be had there”

But where Compton waxes most lyrical is in the area of training: “We have put 4 members of our staff through the Cytech scheme. Much of the cost was subsidised but we had to chip in with subsistence while the staff were away (The training lasts a total of 4 weeks, broken down into separate modules). But there is no doubt we are better off. The staff feel their jobs are worth something and it shows in how well they do them”. Asked about that old anti-training notion that once trained, staff often then demand pay rises or go and get a new job Compton responds “ I went to a talk few years ago and an American business guru said some people say that if you train your staff they then go and leave you. And what that American chap said has stuck with me ever since. He said the thing is if you don’t train them they stay with you forever”

It was clear from Compton and others that I spoke to, that sentiment plays no part in their relationship with either the ACT or through it, ActSmart, although it has to be said that their attitudes were in marked contrast to the indifference and, on occasion, outright hostility that has sometimes characterised attitudes towards the OIA.

In its simplest terms they belong because it pays them to do so. Where the cycle industry model offers the best pointers to where outdoor should be headed, is in the relationship between the Association and its commercial suppliers. The ACT clearly views its role as an oversight committee, contracting out the dogsbody work to others who are skilled at it, leaving it free to develop strategy.

And what might that mean in practice in the outdoor sector? It means the OIA steering clear of involvement in organising trade shows, managing membership rosters and negotiating with credit card companies and a myriad of bits and pieces of minutiae. Leaving the way clear to bank the income and then spend it on bringing the joys and opportunities of outdoor pursuits to an even wider cross section of the public.

It is encouraging that the noises coming from the OIA indicate that at last this message has got home to them. Lewis Grundy’s report was never made public, but having read it, it seems clear to me that he felt that the OIA would save itself a lot of time, trouble and money by simply inviting ActSmart to develop a purely outdoor model of what currently works so well for the bike business and on the basis of what I have had seen and heard about it in preparing this article. I think Grundy may well be right.

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