I recently had the chance to tour the Orbea USA assembly facility with their Chief Operating Officer. I asked him about Orbea’s distribution strategy of using only retailers. After all, competitive cyclists tend to be pretty “wired” and know what they want, so why not sell directly through the Orbea website? He said they sell through retailers since there is some customization done at the dealer and to protect their premium product positioning.
I also visited an Orbea retailer. I asked the sales guy (who obviously was a cyclist) about Orbea bikes, and he launched into a passionate rant about why they’re the best and how he wouldn’t be caught dead riding anything less.
The Orbea strategy is a great example of why manufacturers must stay true to their distribution channels, especially in recessionary times:
- Brand loyalty is not just for the end user. It extends to your channel. Protecting them builds goodwill that carries you through tough times
- Short term margin gains (e.g., selling through the Internet) comes with a long term cost of diminishing your brand in the eyes of the end user and losing your channel’s loyalty
Orbea is taking the long view of meeting the needs of a very specific segment of the riding population. Their customers, and their channels, are in turn rewarding this strategy with fierce loyalty.
