Harley: Site Won't Leave Dealers in Dust

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Harley-Davidson Inc. plans this spring to start selling on the Internet, but don't expect to put motorcycles in online shopping carts. Harley-Davidson.com will instead sell branded apparel, collectibles and accessories through dealer Web pages set up in its Harley RoadStore section.

"Part of Harley-Davidson's core operating philosophy is that our dealers are our primary outlets for fulfillment of products to retail customers," said Ken Ostermann, Harley's interactive communications manager. "And our e-commerce initiative will work to support that philosophy, allowing our dealers to sell product direct to retail customers through our central infrastructure."

The Milwaukee-based motorcycle maker has asked 600 Harley dealers to apply for participation in the pilot phase of the program, which will run through the end of the year. A subset of this group will be chosen based on performance, ability to ship product and other factors.

Though Ostermann was unwilling to disclose details, he said participating dealers will have their own Web pages in the online store. These dealers will accept credit card payments online from consumers and ship orders directly. Consumers can choose dealers based on preference or proximity.

"Our e-commerce initiative is designed to take customers from the online world into the physical world," Ostermann said, "and we're designing the program so that it truly will support both customers that desire to purchase product online and those that desire to research all their purchases online and then actually make those within the physical dealership."

Over the years, Harley has relied extensively on the fervor of its dealers to build a cult around motorcycle models.

"For motorcycle sales, those products need to be set up and delivered, and we believe that the relationship needs to be established between the dealer and that motorcycle purchaser within the physical dealership," Ostermann said.

The Harley RoadStore will feature the latest products and selections, many of them shared with the company's information-only, seasonal print catalogs.

Besides collectibles, the RoadStore will display leather jackets, rainwear, shirts, helmets and other apparel as well as accessories for customers looking to customize their bikes.

A key feature of the store will be a wish list. After the pilot phase, consumers will be able to e-mail this wish list to friends or family as gift suggestions.

For now, marketing activity will comprise links across all Harley sites. The HOG.com site - the online home of the Harley Owners Group, numbering nearly 500,000 members - will have links pointing to Harley-Davidson.com, as will hdrentals.com, the Harley consumer-financing division's site.

According to Ostermann, Harley-Davidson.com averages 500,000 unique visitors a month.

Harley Davidson's revenue for fiscal 1999 was up nearly 16 percent over 1998 to $2.45 billion, and Harley motorcycle shipments were 17.5 percent higher at 177,187 units.

Non-motorcycle revenue from general merchandise like apparel and collectibles was up 15.9 percent last year to $132.7 million. And sales of motorcycle parts and accessories were 22 percent higher in 1999, at $362.6 million.

Production of Harley-Davidson bikes this year is pegged at 196,000 units, accompanied by a corresponding rise in merchandise and accessories. Given such growth, Ostermann said Harley would like to continue strengthening the bonds between dealers and retail customers.

"And as we look at what the online world can do for the Harley-Davidson experience," he said, "we want to make sure that we're not taking away from the physical experience, but that we're adding to it and providing for the convenience that today's busy customers are looking for."

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