08 Sep 3 Reasons Bicycle Retailing is Failing Consumers
This spring and summer has brought a lot of great conversation around the bicycle industry and how we can possibly grow instead of shrink. I kicked off this summer with an article on how The Bicycle Industry is Sick, Rick Vosper has written several great (lengthy) articles on Red Kite Prayer, and people keep chiming in on how women can save the industry. As I said in my original article, women won’t save the bike industry but rethinking the game and how we are doing business could.
Why is the Industry Shrinking?
The bike industry has been flat for several years, and if you pay attention to inflation that means the bike industry has been DOWN for several years. The market segments that are growing seem to be attracting current riders, not new ones, and the over arching distribution model that we are all working on is simply plugging holes and not pushing us forward. As a whole, our industry has put the blinders on simply focusing on the ways we have been doing business instead of how the consumer is interacting, researching, and buying in 2015. We are failing our customers and as a veteran of this bike world for over 15 years I see 3 major flaws in the current work plan. These start from the manufacturer, through vendors, and down to bicycle dealers.
We Aren’t Meeting Consumer Demand
More and more local bike shops are trying to pigeon hole their brands to only sell to brick and mortar stores. Bike dealers believe that the internet is one large reason their business and the bike business is shrinking and that forcing consumers to buy those brands from a physical store is the answer. Wake up call, if your business plan doesn’t include selling to customers through the channels they want to buy than your business plan is short sited and flawed. Consumers want to buy today, they want two day shipping and they want to do it all from the comfort of their home, work, or cell phone. We are LIMITING consumers buying power by telling them, actually forcing them, to drive down to visit their local bike dealer. We are GAMBLING sales numbers and money in the bank that the local bike dealer will provide an amazing customer experience. A customer experience that needs to surpass that of the internet because remember we asked that person to take time out of their day to go visit an actual store so the experience needs to beat that of the internet.
In 2015 consumers are consuming, researching, and buying online. We are keeping consumers from large ticket items because we are not allowing them to be bought online and shipped to their house. There is a lot of grey area in this topic, but I believe Trek is giving their dealers a huge advantage by allowing consumers to buy their bikes online. The dealers that harness this advantage, do their homework on why a consumer didn’t want to walk in their store, and then provide an amazing experience based on the findings of their homework could knock this out of the park. This move from Trek has actually tickled my interest in opening a Trek dealer, any potential partners out there?
We Aren’t Good at Marketing and Communications
Manufacturers, distributors, and bicycle dealers aren’t the best at marketing, telling compelling stories, and communicating. We must connect with consumers, and give them reasons that punch them in the gut to experience the joy and passion of bicycling. While I believe we need athletes and superheroes to look up to stop giving 80% of your available marketing dollars to racing. Look outside of the bike world, do market research (the real kind with surveys, user groups, and a lot of analytics), and help break down the barriers that are keeping people from buying $500+ bikes. Stop idolizing the spandex and $8k bikes without giving the commuters, recreational riders, and adventures enough time in the spotlight. Make a plan for your brand and then communicate it out to your reps, your stores, and help the end business (bike shops) convey your message better.
A few of my favorite brands for marketing include GoPro, Patagonia, and Rapha. All of these brands have a decent price tag attached to their brand, and while their product will last it is their marketing machine that is making the sales for them. When I say any 3 of these brands names to people they attach it with an emotion, and not an actual technical feature. They talk about a video they watched of a dog running to the beach and how happy it made them feel, or the latest challenge they went against to earn a Strava badge of Rapha honor. How can we take these strategies and apply them to our brands, or stores? How can we create a community out of storytelling?
We Stink at the Business Side of Bicycles
This is the largest flaw of them all and the one that will require the most work. Selling to consumers in 2015 it means upping our technology, hiring a web-designer or online sales manager. Marketing better we need to hire from outside of the industry. Teaching basic business sense means that we need to rewrite the playbook that the industry has been resting on for 40+ years.
By my estimate, in the next 10 years the number of bicycle dealers will shrink by 2/3rds. The amount of good bike dealers in a town will compare to that of a good camera shop. I can count on one hand how many camera shops we have in Denver currently, but I don’t have enough fingers and toes to count the bike shops. The dealers that will be left are the ones that have a solid business plan and run their shop to make money. By doing this they can afford the best staff, training and benefits. The standards for working in a shop will be higher, and your business knowledge will need to outweigh the number of years you have spent in the industry. Owners and managers will need to understand the foundational building blocks of any great business, sales, marketing, operations and human resources. They will also need to have experts on their staff, or as hired consultants, for each of these areas to continue to push the business forward.
I am willing to bet that 70% of industry employees reading this feel intimidated, or perhaps put off. You’ve been in the industry working your ass off and feel that your company or shop should provide you the training you need to succeed or perhaps you have found success and you think your shop or brand is safe in today’s market. Our industry is failing, it is shrinking, and great shops are closing their doors because they can’t hire people to help them be successful in 2015. If you really love this industry and want it to last then do it and yourself a favor by continuing to learn. Do this by understanding the basics of accounting, management, sales, process improvement, buying strategies, and any other business term that sounds exciting to you. Don’t stop pushing yourself, and whatever company you are working with.
Introducing Shift Up Strategies
One of the largest reasons bicycle retailers are failing is the lack of business knowledge, business experience (not just bicycle industry experience), and the passion for continuous learning. This fall I am launching an affordable online learning platform for retailers to brush up on the basics and to push themselves to make the bicycle industry better. The training will include 1 part education, and 1 part homework that can all be completed within an hour of time. What we have been doing for the past 40 years is no longer working and we can’t keep expecting consumers to walk in our doors, or guilt them into buying from us because we are a local bicycle shop. We need to be more, and Shift Up Strategies is going to change the game of bicycle retail to do so.
If you want to know when Shift Up launches, sign up to receive an email.