UK based global mail order giant Wiggle has recently set up an Australian headquarters in Sydney. Their space is high in the north east corner of an office tower in upmarket Bondi Junction, with sweeping views of the city and Sydney Harbour.
At the time of our visit in September there were only two people working out of a single office, but they were about to take over adjacent space to make room for perhaps five or six staff by the end of this year.
Wiggle’s first General Manager, Australia & New Zealand, Adam Johnson, is a tall, fit, highly educated and experienced senior executive. He’s also a keen bike racer, with his favourite activity being track racing on Sydney’s Dunc Gray Velodrome, which hosted the Sydney Olympics.
Adam is a long time Australian resident, but still speaks with the English accent of the country where he was raised.
Adam was both generous with his time and refreshingly open with his answers when Bicycling Trade came to visit and ask questions on behalf of bike shop owners wholesalers across Australia.
BT: When did you start working for Wiggle?
AJ: I started back in April 2014. The initial task really was to make an assessment of, ‘Where are we? ‘What should we be doing?
I then reported back to the business and then based on that plan we’re now making the investment. We’ve set up a local subsidiary, we’ve opened the office and we’ve hired the first people.
Bicycling Trade: Prior to running Wiggle in Australia, did you previously work for Wiggle in the UK?
Adam Johnson: No I didn’t. Immediately prior to this I was working for an American software company that have a platform that do ratings and reviews. So when people purchase a product it then solicits them to say, ‘Would you like to rate that?’
Wiggle happened to be a customer of that, but that wasn’t how I ended up at Wiggle. I ended up at Wiggle through a recruiter who knew me and knew my skill set.
I actually grew up in Southampton, which is only about 25 minutes away from the Wiggle office in Portsmouth, so in terms of geographic connection, I’ve got one with that.
I left the UK for Australia in 1987. I married a Kiwi and spent 10 years in NZ. We moved to Sydney as a family in 2000 and my kids have all grown up here. So I may be from the UK but I have lived Downunder for over half my life.
BT: What’s your career background?
AJ: I started off in the UK. I studied commerce, advertising and marketing. I worked for a Swedish machine tool manufacturer, so I’ve always been very technical. As a kid I took an awful lot of things apart and some of them went back together again properly and others didn’t.
Then from there I worked in the US for a little while, then I came out to Australia. I worked in IT (information technology). I worked for a computer company called Sybase and I ran the operation here, then another computer company.
I co-founded a company that built an online platform for booking flights, hotels and rental cars and then was CEO of the ASX-listed Travel.com.au and Lastminute.com.au until it was acquired by Wotif.
So I’ve always been around technology and then IT.
BT: What’s your role in Australia for Wiggle?
AJ: I was hired as a brand ambassador and it’s really recognition that as a market here, it’s been a successful market for Wiggle and the guys in the UK wanted someone on the ground here.
They wanted eyes and ears closer to the market and to be closer to the customers and also to back up the investment we made in sponsoring the Amy Gillett Foundation and Bicycle Network etc and ensure that we actually did the right thing with those. We don’t just put money into things, it’s a lot more than that. We put the time and the effort into promoting them and helping them and understanding them.
Also understanding the market here in terms of the trends. Products are products but obviously some products here are more successful than others. Some brands resonate more. Also we’ve also done quite well with Aussie brands taking them offshore. People like Skins and Bont and others, and it was very refreshing saying, ‘What other Aussie brands are there that we can help?’ Because obviously with that we’ve got global distribution. Some of them maybe quite niche as well.
Well we already sell the Knog products. We’ve had a good history in terms of the Aussie brands like 2XU etc that we’ve helped through our distribution.
BT: How will your role change going forward and what other staff are you taking on?
AJ: We want to do things here that are best done here or that can only be done here. So we think the marketing functions can best be done here, because our audience and our customers are Australians and we want to understand what they do.
We want to plug into the themes and the trends with that. Also customer service is another opportunity to bring that closer here, both in terms of time zone, in terms of access and once again in terms of understanding the local market as opposed to offshore.
I think other things where we leverage scale of product, product sourcing, the big levels of service and distribution and logistics are perhaps best left in the UK, but we’re looking at everything.
So whatever we can do better here and is better done here than that’s what we’ll do.
BT: What sort of people will you be hiring as you go forward?
AJ: We’ve got an Online Marketing Manager who will be starting next week and that obviously is because we’re an online business it’s important to us that customers find us and we find them. So that’s a specialist skill set that is somewhat universal, but has some unique aspects for Australia so he’ll be focusing on that. He’s a keen triathlete. He’s bought bikes from us online. It’s important that there’s the passion. As you know, the founders of Wiggle were bike people and at its core we’re still a bike shop. It’s what we are. We’re bike people. We’ve added the swim and the run and the triathlete, but the core is cycling.
The next roles we would be looking at are customer service aspects. Where we think we can either do the same job better or do more for our customers here.
BT: Last time I was at Wiggle in the UK, they had a policy of no customer phone calls, no phone numbers at all. You could only do live chat. Is that still the case?
AJ: Yes, it is still in place, but under review. At the end of the day with a customer what they want is their problem solved, or they want information.
Talking to someone is great, but talking to someone who can’t solve their problem or give them the information they want is no good. So therefore if we can put in place online services such as live chat, it might have a person behind it, or more intelligent frequently asked questions. Because as we all know, the bulk of peoples enquiries are quite common. People have a unique issue to them and we need to deal with that, but very often it’s people asking about, ‘Where’s my order? What’s the process for returns? Are you going to get any more of ABC item in stock? I’ve bought one of these before but you don’t list it.’ There’s a commonality about those things and very often technology can solve those things better than people.
We don’t avoid our customers, far from it. We want to engage people, but we actually want to give them what they want in the most efficient way.
Obviously as an online business as well, the more we can keep our overheads down and our costs low, the more we can pass on those savings to customers as well.
BT: Will you be setting up an Australian warehouse?
AJ: We’ve looked at it several times and it’s really a question of saying, ‘Is it something we can do better here than we do presently?’
Clearly, if you bring product here it’s going to be closer to our customers which is going to shorten delivery times. But replicating the range is always going to be a factor and can we replicate that in a sensible way and in a cost effective way? So no plans at the moment to do something, but it’s something we constantly review as the scale increases.
BT: What about Australian bike shops, acting as a ‘try on centres’ for clothing and shoes or a service centre? You’ve had a bit of an experience with this…
(As at 8th October 2014 Wiggle’s website listed four shops in Australia and two in New Zealand, although their adjacent map showed five shops in Australia.)
AJ: There are Wiggle Service Points and they’re still in place. The ones that came on board, many of them have done very, very well from it. It’s been good for them to see the customer flow, to have us behind them with promotion and the brand etc.
It wasn’t for everyone. Some of them, it wasn’t what they wanted to be doing. There’s no doubt about it that when we sell a component like a set of handlebars or whatever, someone has to fit those. It may be that you’ve got a competent customer, or they’ve got a friend or they’ve got a local mate at a bike shop or the local bike shop is happy to do those things for them.
But certainly for those people that don’t immediately have access to someone to fit them for them or help them, then the Wiggle Service Points are a great idea. What they do is the customer can buy the product and then take it to a place that is going to be welcoming to them, offer them a deal on fitment and the bargain there is that the customer gets a better service and they get what they want and the opportunity for the Wiggle Service Point is around the services. Because as the margin on products comes down we think there is a great opportunity in services. So perhaps you’re better off being the person who fits the handlebars and makes the adjustments etc as opposed to the person who is selling those products.
BT: Going forward are you looking to have more independent shops that act as Wiggle Service Points or actually set up your own?
AJ: We’ve done that already. The Wiggle Service Points are in place. We’ve been happy with it and those guys have been happy with it, so we need to expand them. There’s not enough of them. The geographic coverage isn’t enough.
In doing that we then need to re-promote them to let our customers know they’re there and the benefits of using them. In the UK we’ve looked at more physical engagement with customers, which is always a challenge for an online business. It’s great being online, but it’s not the same in terms of being able to engage. That’s why we’ve done work with events and that’s why we’ve set up the operation here in Australia.
In that road map of three to five (years) I think we will have some (Wiggle shops), but exactly what shape it takes I don’t know. We know we sell bikes, but we know we’d sell more bikes if people could experience them and try them and be fitted for them etc. So we’ve got to overcome those sorts of hurdles. So once again it comes back to that theme of saying if it’s something we can do better here, good.
BT: So potentially in three to five years there might be some sort of Wiggle branded physical retail presence?
AJ: I think that’s a possibility. The reason being, if you actually look at customer engagement it’s this concept of omni-channel. Basically what that means is interacting with your customer in the way they want to interact at a particular time.
It may well be for a particular purchase they want to research it online, they want to buy it online and that’s it, done. But it might be with something else where they want to research online, buy online, but they want some help in fitting it. Or it may be at the other end of their journey where they want some advice on which product they should be ordering, even though they may fit it themselves or someone else.
Then when you comes to bikes it’s about fit. It’s about getting the sizing correct. It’s about componentry. It’s about ensuring the bike matches someone’s expectations and their needs. I think that’s why we want to do it, because being customer driven that’s what customers do.
I think if you look at everyone, we all buy different things at different times based on our current need, whether it be a gourmet meal or a quick hamburger or you grab a sandwich, they’re all food, but they’re meeting different needs at different times.
I think that’s the way we see it. There’s one set of customers who want to do different things at different times and the more touch points you can have on that journey, then the more engaged you are and the better service you give, and if you give good service then you’ve got a good business.
BT: Are you moving to create and sell more of your own branded product as opposed to other people’s brands?
AJ: We have for a long time with the DHB product. It’s been around for a long time and very well established as a brand in its own right. Many people may not even be aware it’s a Wiggle brand. It’s not promoted as such, but it’s no secret. We’ve then we’ve got the LifeLine range of accessories and Verenti, our own brand of bikes.
I think like any retailer, own brand is part of the mix. It’s always up to a certain limit. It’s always to compliment other brands and it’s also because it is fun. We’re bike people.
If you look at a bike shop, traditionally bike shops had their own frames. They had their own name on them and they loved doing them because they thought they could do them well and they thought it was part of that whole customer experience. I think with us that’s the own brand element. If we see there’s an opportunity. If we think we can do it more effectively, then yes we can.
BT: You mentioned briefly sponsorship of Amy Gillett and Bicycle Network. How much are you investing into those sponsorships and those organisations?
AJ: They’re both six figure type investments and multi-year agreements. The important thing for us is obviously with those arrangements, there’s funding involved in it, because they have to run their operations to be effective and to support their causes. But it’s also around the other things we work with them in terms of helping them to promote, activation at the event. With the Amy Gillett Foundation we’re providing mechanical support, we’re providing food station support etc. We have the Wiggle car on the road helping people. I think it’s a very practical thing you’ve got to do at those things. It’s not something you can do from the UK and just write a cheque. That’s helpful, but it’s only one step of the way.
With both those organisations, for instance helping Bicycle Network at the moment with their membership drive. In each parcel coming from Wiggle into Australia at the moment is a flyer promoting membership of the Bicycle Network. That’s where I guess we can use our scale and our brand to help and we think that’s really important.
BT: At Eurobike I was told by one of your colleagues that Australia is the largest market outside the UK for Wiggle, ahead of Japan.
AJ: Yes, it would be close to that. We’ve got a global business, very strong in Europe and growing very strongly in Europe. Traditionally Australia has been a great market. The Aussie’s found us early on and I think the guys at Wiggle, when you’ve spoken to them you’d know that they were as surprised as anyone at how quickly the brand resonated and how popular the brand became in Australia. I think that’s because we’ve been doing the right thing.
BT: What market share do you think you have now of the Australian bicycle market? You could even split that between P & A and complete bikes. And what market share do you think you are able to achieve?
AJ: In terms of that aspect, we have very little data here on the market and that’s something we’d all like to see more of. It’s just a question of who’s going to provide it and the cost of funding it.
We know our position as an online retailer, so we believe we’re number one here for online retailing in our market (the Australian bicycle market). In terms of how further we can scale, obviously it is a growing market and I think everyone from Wiggle as they’ve come out from the UK has been amazed at the quality of the bikes in the peloton here.
It’s an incredible market. You see more high end bikes here. I rode the Amy Gillett ride on the weekend and as I struggled up the main hill there, I looked around me and I’m not sure that many carbon wheels had ever gone that slowly up a hill, but people love it here. It’s been popular, they love their bikes, they love investments and hence it’s been a really good market for us and shows no signs of changing.
BT: How are sales of complete bicycles going compared to P&A?
AJ: The distance for us with bikes does make it more of a challenge because people do want to touch the product. They do want to experience it.
There are always the aspects of, ‘If I do buy a bike, what about warranty and service and those sorts of things?’
We’ve gone a long way to try and solve those things for our customers, but it’s still not the same as the physical. One aspect as well with bikes is that we want our customers to have a fantastic experience and it’s harder to control the purchase of a bike. They may well, despite the best advice from us, it may not be quite the right bike for them. There is a degree of assembly required. We build up the bikes, we test ride them and then we break them down again, but they obviously necessarily do have to arrive at the customer in boxes and that’s not something we can necessarily control.
It’s gone very well and we’ve done the very best that we can, but given the model that we’ve got, whole bikes is probably not something we can accelerate at this stage.
BT: What do you think of the independent bicycle dealer and their future in the face of competition from Wiggle and Chain Reaction and others like you?
AJ: I think it goes back to that interaction with the customer and the way that they want to interact when they want to interact. The opportunities for a bike shop to engage with customers in terms of advice, in terms of bike fit, in terms of service, are things we can’t do.
We can provide information, but we can’t provide that level of interaction and that level of engagement and I think therefore those businesses are changing and have changed over time.
They are great businesses focused around service, all elements of that, technical service but also just purely customer service in terms of talking to customers, engaging with customers, things that we envy and would like to be able to do.
We have empathy for them (local bike shops) because we all grew up. As kids we’d go and annoy our local bike shop and we’d talk to them. We know that bike shops provide a lot more than just selling products or fixing bikes.
Frankly for us we know we’ve not always been welcome, but that doesn’t stop us from trying to do the right thing. We’d like to have a greater level of engagement in racing in Australia. It may not be possible at the moment, but we’d like to.
BT: How many Australians interact with Wiggle? How many are on your database?
AJ: In terms of the website, we have high hundreds of thousands of visits a month on the website and sometimes a million plus, so highly engaged from Australia. We’ve got good engagement here and I guess that speaks for the popularity of what we do and how we do it.
Like pretty much everyone at Wiggle, I was a Wiggle customer first and now I’m a Wiggle employee. I think that aspect of, we’re talking about magazines, the magazine aspect of an online site like ours, is often overlooked.
People think of us as being highly transactional. I think there’s no recognition that people do an awful lot of research on our site. I wish out of every hundred people that visited our site more bought than they do. The reality is that many of them are just gathering information. And they’re gathering information that they may end up then buying it at a retail store. It’s the reality. I don’t think everything all flows one way.
For example, Campagnolo, and about time, a new chainset has come out, which is fantastic and people are looking. People want to research it. They want to see it, they want to know the specifications of it etc and those are the things that people are often doing on our site. Whether those people actually purchase those items or ever purchase from us, we don’t know. We know an awful lot of people enjoy reading our newsletters, enjoy looking at our site, but where they buy their products it varies.
The important thing for us is we’re here because we feel we’ve been invited here. So Australians found us. We’re here putting back in the best way we can. We know we’re not always going to get the thanks for that. We’re not doing it for that. We’re doing it because we think it’s the right thing to do as a bike shop. We’ll do things we believe we can do better here, ie closer to the customer, whatever those aspects are and we’ll continue to leverage the scale that we’ve got.
