MORE THAN JUST A PLATFORM

Marcus Diekmann is driving digital expansion at Rose Bikes. In addition to strengthening the retail brand and product brand, he’s pursuing new distribution channels in bricks-and-mortar stores and helping other retailers with digitalisation. Is he overwhelming his employer and the whole industry in the process?

Interview with Marcus Diekmannn, Rose Bikes

Marcus Diekmann, what are you doing with Rose Bikes?
Marcus Diekmann:
Rose Bikes has two managing directors, I’m one of them. In addition, I’m a partner in a digital communication agency and a small shareholder at Rose and proud to work in such a great team.

How did you come to Rose?
Marcus Diekmann: I previously worked at Accell, one of the biggest bicycle manufacturers there is. Before that, I worked for BetterBed, the owner of Matrazen Concord. We conceived a model for retail digitalisation there and I firmly believe that it can be repeated.

Last summer, you announced that you wanted to become a platform. How is that supposed to work in this extremely fragmented industry?
Marcus Diekmann:
I no longer believe in pure trading with multi-brand articles. If there is no USP, such as a regional identity, then this kind of trading activity just leads to continually sinking prices. Gross profits fall, while marketing costs simultaneously increase. It the end it runs itself into the ground.

This is why I am redefining our role. We want to be a connector. We manufacture accessories and bikes. Our website has some 15 million visitors every year. And we bring them together with a curated assortment of accessories.

On the other hand, we have manufacturers, who we connect with 15 million visitors. This is our future role.

This is a complete change of mindset. Today we buy in and we sell out. In future, we will be using business intelligence and artificial intelligence to fulfil this connecting function. Thing is something we have to completely relearn. Where we used to have a trading margin, in future we’re going to have a commission fee.

I believe that this is crucial for us to survive as a retailer and to have a chance in the future. You already see this in industries that are more advanced in e-commerce. There, gross profits are falling by 1.5 to 3 per cent every year.

We’re starting with accessories and clothing and with bike types that we don’t manufacture ourselves. We’re strong on mountain bikes and racing bikes and are improving our urban collection, however in cargo bikes, for example, we currently have nothing on offer. This means in future we will be selling cargo bikes from partners that complement us via our platform. But when it comes to the sectors clothing, parts and accessories, we will be connecting everything. Naturally, we’re connecting manufacturers, not retailers. Manufacturers will be able to sell directly via our platform. They won’t have to worry about web traffic and require little e-commerce knowledge.

We recently purchased an agency that works as a digital enabler. They are able to show retailers how to present their offer, how to define KPIs and how to evaluate the results. Of course, marketing also plays an important role. Which keyword campaigns can we run together? These are important issues.

This all represents a huge evolution and we are going to need a year before we are really well-positioned.

 

I no longer believe in trading with multi-brand assortments.

Is consultancy part of the revenue model?
Marcus Diekmann: Yes, absolutely. We are pretty good in a number of areas. When it comes to distribution, we have everything in place. I could imagine that manufacturers without the set-up might book it with us. I’m talking about the issue of full service, the logistics and naturally the e-commerce infrastructure that we have built up. We can help manufacturers to design their banners and to create content. We’ll help them with everything they need to sell better via our platform. We see ourselves here as a total service provider.

Let’s talk about marketing. As a retailer, Rose was easy to understand. Now, as a platform, it’s harder to get recognition. What are you doing to build your brand?
Marcus Diekmann: First up, yes, it is very difficult. If a retailer is selling via Idealo, then the customer is not interested in who is behind it. They just want the cheapest price. There is no “brand” as such.

Rose has already undergone one transformation. We used to be just a retailer with a legendary catalogue. Now we are both a retailer and a bicycle manufacturer. This means that it’s also important for us to strengthen our manufacturer brand. And there are very few really well known brands in this fragmented market.

As a retail brand, we need to get more and more recognition, to generate traffic.

These are all very different requirements; however, they have a common denominator – sports performance. Our segment is entry level to premium. Our products always have a sporty character. This is something that bridges both brands.

But we have strictly separated marketing for both areas. For our manufacturer brand, we implement more classical branding, cooperation with athletes and cool campaigns make the Rose bike brand more and more popular. The retail brand is more strongly focused on performance.

This does create a certain amount of conflict. We often have interesting discussions about whether the brand is too “beautiful” or too “distribution orientated.” At the end of the day, everything that we do should incorporate our central values. And these are: top products, top price, top service. This is what it all comes down to. We are also currently investing significantly in media.

The brand experience is clearly moving to social media channels.

Let’s talk about marketing. As a retailer, Rose was easy to understand. Now, as a platform, it’s harder to get recognition. What are you doing to build your brand?
Marcus Diekmann:
First up, yes, it is very difficult. If a retailer is selling via Idealo, then the customer is not interested in who is behind it. They just want the cheapest price. There is no “brand” as such.

Rose has already undergone one transformation. We used to be just a retailer with a legendary catalogue. Now we are both a retailer and a bicycle manufacturer. This means that it’s also important for us to strengthen our manufacturer brand. And there are very few really well known brands in this fragmented market.

As a retail brand, we need to get more and more recognition, to generate traffic.

These are all very different requirements; however, they have a common denominator – sports performance. Our segment is entry level to premium. Our products always have a sporty character. This is something that bridges both brands.

But we have strictly separated marketing for both areas. For our manufacturer brand, we implement more classical branding, cooperation with athletes and cool campaigns make the Rose bike brand more and more popular. The retail brand is more strongly focused on performance.

This does create a certain amount of conflict. We often have interesting discussions about whether the brand is too “beautiful” or too “distribution orientated.” At the end of the day, everything that we do should incorporate our central values. And these are: top products, top price, top service. This is what it all comes down to. We are also currently investing significantly in media.

Which channels?
Marcus Diekmann:
I firmly believe that e-commerce is going to move more and more to become a pure sales channel. The customer wants to search and compare, they often already have an idea what they want, but then would look to see one or two alternatives via cross-selling. What we see though is that this is much more than simply browsing.

The brand experience is clearly moving to social media channels. Back in 2008, we said to the retail trade – you really need to do e-commerce. Now, we are saying to trade marketing – the brand develops in social platforms. This is where customers go for entertainment, this is where they are every evening – so your shop needs to be geared up and optimised for this.

We are restructuring on a massive scale. Our goal is to generate more and more frequency via social media.

Fahrrad.de used to have a large community with lots of videos. They concluded it didn’t get them anywhere. Have times changed?
Marcus Diekmann:
Times have definitely changed. Server capacities for hosting videos are getting cheaper and cheaper. I’m not sure that the community issue is really so important in an online shop. The community belongs on Instagram or Facebook. It can also work in a commercial way there too. We see that when we run a cooperation with a rider and then say, bring out a limited-edition model, the bikes sell out within hours. It’s important to engage other communities to achieve your goals.

Forums and communities in your own online shop have never really worked that well. This is not part of our tactical agenda.

What is on your tactical agenda then?
Marcus Diekmann:
We’ve just opened a new store in Posthausen near Bremen and now have three bricks-and-mortar stores. Nevertheless, we are still 80 per cent e-commerce and primarily an online-first business.

Fahrrad.de used to have a large community with lots of videos. They concluded it didn’t get them anywhere. Have times changed?
Marcus Diekmann:
Times have definitely changed. Server capacities for hosting videos are getting cheaper and cheaper. I’m not sure that the community issue is really so important in an online shop. The community belongs on Instagram or Facebook. It can also work in a commercial way there too. We see that when we run a cooperation with a rider and then say, bring out a limited-edition model, the bikes sell out within hours. It’s important to engage other communities to achieve your goals.

Forums and communities in your own online shop have never really worked that well. This is not part of our tactical agenda.

What is on your tactical agenda then?
Marcus Diekmann:
We’ve just opened a new store in Posthausen near Bremen and now have three bricks-and-mortar stores. Nevertheless, we are still 80 per cent e-commerce and primarily an online-first business.

Why did you decide to open more stores?

Marcus Diekmann: We need clever concepts. We invited René Scheilen to join us. He’s the former managing director of Dodenhof and was previously with Baby Walz and Sportscheck. As such, he has vast sales experience. We deliberately recruited him as we are implementing a new concept. In addition to our stores, which act more as showrooms, we want to offer customers opportunities to test ride bikes and on-site service.

We are not a retailer. There is no way we could have 100 bricks-and-mortar shops. We are an online retailer. This is where our expertise lies. In addition, we are also using a cooperation model. This allows is to tap into existing set-ups. For example, we are working together with great stationary businesses, such as Engelhorn in Mannheim. We’re selling in their store. We are combining forces, as they have the footfall and the sales personnel who we train up to sell Rose bikes. And we bring our competence. The retailers don’t have to carry large amounts of stock. We take care of that. The retailers don’t have to buy in the bikes, they receive a commission. This is what make this cooperation model so attractive.

I firmly believe that e-commerce is going to move more and more to become a pure sales channel. The customer wants to search and compare, they often already have an idea what they want, but then would look to see one or two alternatives via cross-selling. What we see though is that this is much more than simply browsing.

Cooperation is key. Marcus Diekmann, you launched a new support initiative in March this year. Händler helfen Händlern (Retailers help Retailers). How did this come about?
Marcus Diekmann:
We all saw how the bricks-and-mortar retail trade was suffering. However, as an online-first business, we were able to react to this. During the Corona crisis, we experienced over 100 per cent sales growth online. That was fortunate for us. We are not better than the others, it’s just that we were able to continue selling goods, while others could not. As a result, I decided to devote 50 per cent of my time to solidarity projects.

I’m pretty well networked and if I have good political contacts and get to information quick then I share it with others. If I hear from bank directors how to access easier financing, then I share this information with other retailers.

Together with other like-minded individuals, I launched a LinkedIn group in order to share this kind of information immediately. It aims to give others the chance to re-orientate themselves in this crisis or even to keep their heads above water. Above all, it should be optimistic. Burying your head in the sand never helps. I conducted over 250 calls with retailers, who asked me for advice. And I talked to the professional associations. Together, we drew up a list of demands for the government in Berlin, in order to give retailers an additional voice. If the German automobile industry and Lufthansa are being giving support, then retailers should get support too.

At Rose, for example, we had great success with our WhatsApp consultation service. We were able to get it off the ground pretty spontaneously and without even major professionalism. I shared this in the group and said to others: you try it too. If you want to know more about it then give Tim Böker (Rose Bikes Schweiz) a call, he’ll explain how it works.

Whenever we learnt something, we passed in on and others did the same. The press picked up on it and suddenly it was on the television and the radio. I was really overwhelmed by the response. Over 2500 retailers got involved in the project. Even just a thousand would have been amazing. 

It created big waves. Jens Spahn (German Health Minister), Christian Lindner (Leader of Germany’s liberal FDP Party), Dorthée Bär (German Minister for Digitalisation) and Ralf Kleber (Head of Amazon Germany) all came. It was a cool format. Everyone turned up and was really informal. It had kind of drop-in, friendly atmosphere.

How effective was LinkedIn as a platform for this kind of B2B issue?
Marcus Diekmann:
I was really surprised how well it worked. It has a more serious tone than Facebook. This suited the project. Facebook is more about quick interaction. This is not so much the case with LinkedIn. But LinkedIn is now picking up speed. And people are happy to participate. The CEO of Mediamarkt joined the group along with the CEO of Tom Tailor. I’m not sure if they would have otherwise take part in such an open online forum.

You have to learn about LinkedIn. It’s important to overcome your barriers. However, other groups only see five contributions in two months. And this is definitely not enough. It’s all about the work you put into it.

Mr. Diekmann, thank you for the interview.