From a shop perspective -- I work in a Trek shop...
Downsides:
- I don't see any real info regarding returns. Who will own that inventory, dealer or Trek?
- Less inventory on hand; less bikes to test ride. If someone orders a model and size LBS has on the floor, it will still get shipped from Trek. Expect shop owners and managers to react by bringing in less inventory to make up for online sales.
- There are consumers out there who dislike the idea of buying a floor model, thinking that it is a typical retail "display" unit with associated wear, rather than a "new bike." They might buy online rather than from existing inventory.
- Trek decides shop margin rather than the shop.
- If it turns out shops don't need to carry as much inventory, then existing capital like storage space and floorspace is wasted, which could be a big deal for shops with established real estate -- inability to shrink to meet new margins and needs.
- paying for higher shipping costs vs. ganging even individual orders up with larger orders for shipping discount -- freight vs. UPS.
Upshot:
- 24 hour sales, even outside shop hours.
- Someone looking for a Trek who doesn't know your shop will certainly find out about it if they shop online.
- If the site is able to xref a shop's existing inventory, a buyer might enjoy next day pickup.
- Ability to impress with service during initial sale.
- Ability to upsell accessories from existing inventory.
- Less need to manage and display extensive inventory.
- Retail price protection -- no "can I get a discount?" for online sales...
It's probably not as bad a the loudest nay-sayers would have you believe, probably not the online panacea Trek envisions...