From its manufacturing base in West London, Brompton Bikes exports to 46 countries, which account for 75% of the company’s sales. The bikes themselves are made up of around 1,200 components, which makes for an extensive supply chain. “We had some issues with supplies coming in early in the year, so we saw COVID-19 coming,” says Lorne Vary, Chief Financial and Business Development Officer at Brompton Bikes. “Even so, we were still like a rabbit in the headlights when it hit us in Europe seemingly overnight.”
Although classed as an essential business, as bikes were required to get people to work, the effect of the pandemic reaching the UK and the subsequent lockdown had a dramatic effect on the business. “Demand reduced by 40% overnight,” says Lorne, “and we also saw production fall by 30%. It was clear that we had to adapt.”
It was a call from the London hospital, St. Barts, that kick-started Brompton’s push to adapt. “They were looking at options to get their staff safely into work at the hospital,” Lorne explains. “In response, we created a crowd-funding site that quickly raised over £300,000, and so far we have donated 800 bikes as part of the Wheels for Heroes campaign.”
The request kept business ticking over and soon demand bounced back. “Individuals were looking at options other than public transport and both central government and local councils were finally getting it in terms of the mental wellbeing and health benefits of cycling,” says Lorne. “Around £2bn is being invested in cycling infrastructure in the UK alone over the next five years.” He describes it as an “Amsterdam moment”, a golden opportunity to transform movement in cities around the world and the business is pursuing innovation to meet that opportunity.
The website has changed the way we sell as a business.Lorne Vary, Chief Financial and Business Development Officer, Brompton Bikes
Embracing new ways of selling
Despite growing customer interest in purchasing bikes, many still didn’t feel comfortable physically going into stores. “We’d been reluctant to go down the full ecommerce route,” says Lorne, “because so much for us depended on customer experience. Now, though we had to be nimble and respond to how customers wanted to shop. We launched our website in 6 weeks, which was incredibly fast, and we saw a 44% increase in web traffic, with around 70% of recent purchases encouraged by the pandemic.”
Supporting Brompton’s aim to match a customer’s in-store experience as much as possible, the website is not just a shop window of bikes, but a virtual store. Customers can ‘talk’ to the salesperson in the virtual store about their requirements, and they can be helped to navigate the options. “The website has changed the way we sell as a business,” says Lorne.
Recognising a gap in the market for potential customers who were keen to get cycling but either couldn’t afford the upfront cost of the bike or were put off by ongoing servicing costs, Brompton launched a long-term subscription service. With it’s 24-hour hire service from key hubs already a success and on the back of the longer-term Wheels for Heroes campaign, the service was launched in August 2020. “Interest has been off the scale,” says Lorne. “In just 48 hours the pilot completely sold out and we still can’t meet the demand. Subscription is something that’s proved really popular for customers who don’t want the worry of servicing or insurance or the initial outlay, and although still in the pilot phase it is proving hugely popular.”
Subscription is something that’s proved really popular for customers who don’t want the worry of servicing or insurance or the initial outlay.Lorne Vary, Chief Financial and Business Development Officer, Brompton Bikes
Brompton had to also adapt its production line and operations to meet increasing demand whilst maintaining safe and socially distanced working practices. “We initially had to re-space the line, which reduced production by 20%,” Lorne explains. “With demand increasing, we’ve had to invest in new workstations, adopt lean manufacturing techniques and add more people. We’re now back to pre-COVID-19 production levels and we’re continuing to invest in both plant and equipment and skilled employees.”
It has encouraged the business to invest in the development of a new training centre to ensure a pipeline of new talent, says Lorne. “We’re over-recruiting now so we can train people to be ready to meet the demand we’re forecasting. It’s been one of our main areas of investment this year.”
There were times when we couldn’t see what tomorrow would be like, we were essentially blind, but we created a contingency plan and HSBC bought into that.Lorne Vary, Chief Financial and Business Development Officer, Brompton Bikes
When relationships matter
Supply, meanwhile, remained a problem. “A lot of our suppliers in Europe were closed,” says Lorne. “We had a stockpile initially in preparation for Brexit, so we could still make bikes for a while, but our supply chain was extended from 8 weeks to 38 weeks in many cases.” Faced with the perfect storm of increasing demand and dwindling supply, Lorne says that the company’s relationship with its suppliers proved crucial.
“You can’t underestimate the value of those relationships. We’ve always prioritised looking after our suppliers, for example, keeping payments to them on time and keeping close to them to forecast demand. That has really paid off. Many of them re-opened their workshops just to supply us, and at one stage, we even sent a chap in a van to the North of England to pick up supplies.”
Communication has been the thread that has run through Brompton’s successful approach to dealing with the pandemic and ensuring its business remains robust and resilient. “It has brought everyone together, because we’re stronger together,” says Lorne. “Whether it’s talking to suppliers about shifting demand, being there for our staff, or just sharing our plans and challenges with the bank, it has all helped us work towards a better future.
“There were times when we couldn’t see what tomorrow would be like, we were essentially blind, but we created a contingency plan and HSBC bought into that. We didn’t qualify for the government loan scheme, but HSBC offered us a safety net. We were open about the problems we faced and what we were doing, and they listened and responded. With that support, we can see a brighter tomorrow.”