Thoughts on the bike industry...

[Clean39T]

Originally Posted by JAGI410

Also consider this...which is a bit extreme, but plausible...

Since Zwift/ECycling is growing rapidly, this means less "in person" group rides. This means less cycling clothing sales, less tubes/tires due to flats, less "if I only had carbon wheels like Tom up there I could go faster", less exposure to new gear/accessories. It means less exposure to bike shops.

Think about it. If you're only riding at home, you no longer have the safety concerns. You no longer need a bike rack to transport your bike to a ride. The effects of the growth of ECycling will potentially be felt all across the industry.

EM Forster, The Machine Stops:

https://youtu.be/nJk9gk9Ow4I

Appears that's where we're headed.


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That said, it's 33deg out, had freezing rain overnight, and my interest in getting to my group ride is dwindling by the minute this morning.

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Have to readjust the day and hope for drier roads and mid-40s by noon.

Sent from my Pixel 2 XL using Tapatalk

[sitzmark]

Originally Posted by JAGI410

Also consider this...which is a bit extreme, but plausible...

Since Zwift/ECycling is growing rapidly, this means less "in person" group rides. This means less cycling clothing sales, less tubes/tires due to flats, less "if I only had carbon wheels like Tom up there I could go faster", less exposure to new gear/accessories. It means less exposure to bike shops.

Think about it. If you're only riding at home, you no longer have the safety concerns. You no longer need a bike rack to transport your bike to a ride. The effects of the growth of ECycling will potentially be felt all across the industry.

"ECycling" has been around a very long time in the form of "spinning". In the recent past 10 years or so spinning boomed at gyms around the country ... and is now in decline (at least gyms I've been in). Local LBS' with indoor training sessions seem to be keeping their core membership but that's about it. Personally I hate indoor cycling - including Zwift - but know it is part of staying in condition. Honestly if indoor cycling had been my introduction to cycling I would have quit a long time ago. That said, it is very possible I do not represent the average potential cyclist/rider.

Interest in cycling seems to be "organic" without any catalyst driving interest. Gas prices /availability has been a motivator in the past. Eco-friendly has expanded participation. Little Johnny/Suzzie getting to bike age prompts mom and dad to get the youngster a bike and become active in biking again ... for a while. The TdF creates an annual spark of interest, much like New Year's resolutions to lose weight. There's no dominant US rider or team making news or provoking excitement about cycling. It's difficult to create that momentum just on advertising/marketing alone.

[bfd]

Originally Posted by Elefantino

When Wiggle and/or Chain Reaction open U.S. operations that will further dent the LBS. It was inevitable, I suppose.

Here’s a scenario, a few years ago my lbs was concerned about Canyon and other direct sales companies coming to the US to dominate the market and taking away sales. He even contacted Canyon and offered to be a local repair shop for them. They refused.

So now that Canyon is here in the US, have they dominated the market? In the SF Bay Area, I see a few Canyons out there, but no more than any other mfr. Further, the Canyons I see appear to be in the $3k and up range. In our group one guy got a Canyon with Ultegra di2 and disc brakes. Another guy wants the $6500 model that has etap and disc. But that’s it, so far...what’s your experience?

[Clancy]

Originally Posted by Butch

One thing to consider with this conversation is getting kids on bikes. Growing up, Schwinn dealers were what a bike shop was and it was about kid's bikes. No matter the style of riding, getting the youth of the community on bikes safely and effectively is where the bike community should start.

15 years ago my wife started a Safe Routes to School program here in the Boat that includes bike rodeos to teach kids the basics and includes the never ever kids that haven't had the chance to ride. The look on their faces as they ride for the first time is priceless. The local shops come out and help as well as the teachers and parents, this is an active community so that makes a big difference. For my taste the big guns should put their money there and to a good extent they have supported NICA and the growth there is very encouraging.

I believe the biggest loss the industry has with IB going down is this lack of community to supply and build the next generation. Sea Otter is inspiring as the number of kids there is awesome. Having more events where all the manufacturers take part and have a broad spectrum of people show up for some fun is essential. Living in a ski town we have all watched as the ski area battles to get people on the mountain to ski and they have banded together with combo passes that just might get more folks on the slopes.

In regard to the prices of bikes and how the shops and manufacturers make money, as has been pointed out, selling higher priced bikes is more profitable. For the manufacturer the fixed costs of importing a bike, paint, assembly, boxing, shipping, reassembly and selling is pretty much the same for a $500 bike as a $5000 or $10,000 bike. The big guys figured this out a few years ago and they focused and targeted those of us who were in the premium bike market. And it worked. It does not build the base however.

Well said

The bicycle is the solution to so many problems and can play a major role in making our planet better. Under the previous administration there was both increased funding and optimism, the current one not so much but that will change.

The key is the industry needs to figure out how to position themselves to not only survive but to be seen as a critically integrated segment of everyday life. The industry needs to lead.

Be interesting to see how bike manufacturers promote and support cycling in countries where the bicycle is considered important daily transportation like The Far East. Is the bicycle industry slumping there?

Scandinavian countries where cycling is much more integrated into daily like. Does the industry experience the big swings it does in the U.S.?

Are there lessons in other places?

[Clancy]

And one more question...

For people that know. Is the industry supported by the cyclists that we represent on this forum, Pink Bike and others of the like? Active riders who tend to buy semi-pricier equipment and more often?

Or the lower end segment of the market? Kids bikes, $500-$800 adult bikes, etc.

[Ralph]

The most successful bike shop owner in this area told me once....."I'm not in the business of selling bicycles". "I'm in the business of selling recreational products and accessories to affluent people". Cyclists, Triathletes, and others. And this guy has been able to spread out his floor area and buy almost a whole city block during his years running this business. I personally think he uses bikes to get them in the door.....it's everything else that makes the business work. I wonder if this approach will continue to work.

[fignon's barber]

Originally Posted by oldpotatoe

I agree but margin is margin...Whether it be a $500 or a $10,000 bike. The amount is higher but the percentage is the same...(divide cost by 'about .35-.4)..but gotta add labor yo build, sell and do that '1 free service'..that eats into the margin quickly.

Trucks are different..those are YUGE margins compared to a sedan plus BIG $, since they are in high demand. Try to find a good, used, lowish mileage midsize PU truck for less than about $15,000....

I think your missing the point that marauding walrus and I are making. The road bike category is dying because of lack of RIDERS, not because of lack of $10k bikes (or $12k, or $5k....). The infamous ex UCI boss Hein Verbruggen said it over a decade ago when he introduced the technical bans on bikes: that expensive bikes are making access to the sport unattractive and will be the death of cycling.

[MaraudingWalrus]

Originally Posted by Clancy

And one more question...

For people that know. Is the industry supported by the cyclists that we represent on this forum, Pink Bike and others of the like? Active riders who tend to buy semi-pricier equipment and more often?

Or the lower end segment of the market? Kids bikes, $500-$800 adult bikes, etc.

This forum is not representative of the vast majority of customer base of most shops and it shocks me to see how many participants on this forum do not realize this. There are obviously niche shops that are dripping in fancy customers with only fancy bikes and cater to them well. But that's not the reality for most shops. Nor can it be. The automotive industry can't suddenly be all Porsche dealerships.


I make money for my shop by fixing flat tires for $15 (tube and labor) on beach cruisers and doing $50 tune-ups on hybrids.

[gemship]

Originally Posted by MattTuck

Not sure if this fits in the InterBike thread, but certainly related to it... and the thread about USAC vs. British Cycling.

It feels like the industry has adopted a strategy of continual niche formation in which bikes are marketed to ever more narrow use cases. As an example, there used to be road bikes, then they "discovered" a new geometry called "Endurance", which is positioned as distinct from a racing bike. Same thing has happened with gravel bikes, fat bikes, 27.5 plus, etc.

So, here's my question... is that strategy built on the assumption that it is easier to sell an incremental bike to an existing cyclist than convert a non-cyclist to the sport?

I think that ties in with the USAC discussion, as they seem less concerned about growing the numbers of the amateur ranks. Contrast that with British Cycling which is using Zwift to try to find potential talent.

Not sure if they exist, but would love to see some numbers to see if I'm right about selling more bikes without bringing new people into the sport.

Yeah but aren't "niche bicycles" awesome? There just seems to be more than one way to skin the cat. Also N+1 seems to be very real at least around these parts. As far as road cycling as a competitive sport I wold liken it to hockey. It's expensive and dangerous and kinda clicky within it's own little in crowd. Having said that I guess there's exceptions but surely you can relate to how exclusive it is living in New England as we really don't have a long riding season. Now if you lived in Cali, Texas or FL perhaps a different story. I would still have to side with OP on the safety issue though as I have read about to many hit and runs. At least we do have awesome mountain biking in New England and if you lived in the Boston area and can't make sense of a car then a bicycle/ cargo bike could be the answer. I think change/niche or call it N+1 is good. Whether it just has people buying too many bikes or catching the eye of a newbie thinking twice good question and in that regard marketing keeps the bike industry staying alive. There is a thread on here I read the other day about some 900$ dollar convert most bikes into a cargo bike thingy that although I don't have a need for I thought was just awesome.

[rccardr]

Just a couple of observations, with the caveat that I'm not in the bike business really at all in any way any longer:

The vast majority of people who go to spin class are not bicyclists, or at least not active + ones like folks on this forum. Spin at our local gym is insanely popular, you have to get there a half hour before class to make sure you get one of the 40 available bikes, and they have several classes each day, seven days a week. But participants seldom ride them like bicycles, they ride them like exercise equipment, they don't generally work them too hard, and only about 3-5 of the people in the classes I go to (granted, during winter months) put any real sweat into it. And based on my casual conversations with people in my class, few of them ride 'outside'. So, spin doesn't increase unit sales. I doubt Peloton does, either.

For people in urban areas, the local BikeShare program has replaced the inexpensive or vintage city bike. That cuts a lot of invested riders out of the pool of potential active bike hobbyists, especially those who rode a personal bike for a while and decided they liked it and wanted to upgrade in some way. So, fewer sales.

My local shop (a Trek dealer) is outstanding in many ways (not that I use them for much since I do pretty much everything on my bike collection in my own home shop) and everyone I've sent there has received great service. But they sell a whole bunch more upright bikes than drop bar bikes, and a lot more sub-$1000 bikes than Trek Ones.

An increasing number of participants in group rides and event rides (club centuries and the like, especially where there are 30-60-100 mile options) ride upright bikes, not drop bar bikes. I flew down to Sebring this weekend to ride in the Highland Bike Fest and was amazed at the number of upright format bikes in attendance. So, more hybrid/upright bike sales.

E-bikes are only going to get better, less expensive, and more ubiquitous. A friend recently went on a tour in Croatia. Half of the group was on e-bikes. Friends in the bike tour business tell me that the proliferation and acceptance of e-bikes has doubled- yes, doubled- their booked business. A super-fit friend just bought one for his wife, who has health problems. Now they can ride together at his pace and everyone is happier. And my wife, who also has health problems, sees this and now wants to book a tour in France or Italy. So, more e-bike sales.

I don't know what all this means, but it's a whole lot of change happenin'...

[buddybikes]

I would challenge few reasons for decline:
- Kids aren't active so there are fewer banging around on bmx and whatever
- Streets are more and more unsafe.
- Self traveled touring is getting outright dangerous

Our cell phone society is ruining the sport

If someone wanted, they can get into the sport fairly resonably, just get a 3 year old bike that functions the same at 1/3 the price.

[zap]

edit

Originally Posted by bfd

So now that Canyon is here in the US, have they dominated the market? In the SF Bay Area, I see a few Canyons out there, but no more than any other mfr. Further, the Canyons I see appear to be in the $3k and up range. In our group one guy got a Canyon with Ultegra di2 and disc brakes. Another guy wants the $6500 model that has etap and disc. But that’s it, so far...what’s your experience?

Re Canyon...I posted my opinion a while back and it hasn't changed.

My wife was interested in getting a new road bike and Canyons 650B caught her attention. Not the big off road 650b size, but big enough for decent roads 25 width.

Anyhow, the Canyon tt is too short, the supplied stem is too short, only manufacturer supporting 650b.....so my wife went to a local bicycle shop 2 weeks ago. The owner built an extra small for her to try out with no guarantee of a sale. She took the extra small 700c out for a spin, loved it and bought the bike.

I will also note that Canyon Ultimate sizing is too short for me as well and the onezee hbarstem in the longer length is too wide.

A buddy of mine in metro DC had a Canyon that he purchased in Germany. I moved to NC right around the time Canyon started selling direct in the USA and have yet to see one purchased from Canyon USA.

[54ny77]

this.

i haven't bought a new bike in about 10 years, and therefore have not added to the multiplier effect in the economy: an original purchase contributing to supporting wages, suppliers, infrastructure, services, and on and on....

Originally Posted by steveandbarb1

If someone wanted, they can get into the sport fairly resonably, just get a 3 year old bike that functions the same at 1/3 the price.

[Matthew]

Canyon isn't the first direct to customer seller correct? Hasn't this been going on for a while now? Can't imagine they are doing that much to change the industry. Just guessing cycling is in a downward swing right now. My area has at least four shops still going. I see a fair amount of riders out most days. Most on drop bars, many very nice ones. Have never seen a Canyon in the wild. As far as kids go they have their faces buried in an electronic device for the most part. If school wasn't in session they likely wouldn't even know what season it was since they are never outside anymore unless they have to be. Far cry from when most of us grew up I'm guessing. Internet sales are a shops worst enemy in my opinion.

[Hellgate]

Originally Posted by MaraudingWalrus

Much higher chance of getting 5 long term customers when selling 20 bikes than when selling 1 bike. A $60 tune-up is a $60 tune-up on a $500 bike and a $10,000 bike. Rather have 5 or 6 of them than 1.

Yup, and the high end buyers seldom come back after the sale.

Back in the late '80's I could sell GT Timberline's all day long. Along with bottles, cages, pumps and helmets at full price.

The high end buyers were typically ill-informed, time wasters, who wanted the bottles, cages and helmets for free, because they were making a "big" purchase. The amount of time and lower margin made it hardly worth the effort. But to be a "real" shop, you had to stock the expensive bikes.

At the time it was Performance and Nashbar who got the best part prices. We couldn't buy at wholesale what they sold at retail. ****mano didn't care one bit about the dealer.

I have to laugh with the bankruptcy of Performance. I feel vindicated.

Fast forward to today, it's only that much worse with internet sales.