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Supplier Communication Needs to Improve

Published February 1, 2008

BY MEGAN TOMPKINS

SAN DIEGO, CA—Industry leaders need to talk with each other and with other cycling organizations. That’s the message that came out of last month’s Bicycle Leadership Conference.

David Lawrence, marketing director for Shimano American, said the need for unity and communication is essential. And Dave Guettler, of River City Bikes in Portland, Oregon, agreed. “If we’re ever going to move ahead, we need better communication.”

This year’s conference, sponsored solely by the Bicycle Product Suppliers Association (BPSA), was held without the National Bicycle Dealers Association—a decision made by the NBDA as it pursues its regional seminars. Retailers were welcome but less than a dozen attended.

Still, those who came said they enjoyed the supplier-focused agenda. Dan Bon, president of Nirve Sports, who attended for the first time in eight years, came because content was targeted at suppliers.

“I came because it evolved back into the wholesale side, and wasn’t a convoluted mix,” Bon said. “One thing that hasn’t changed, and I hope will change, is they keep commissioning these studies that find we are too focused on enthusiasts. It hasn’t changed in eight years.”

Most appreciated the streamlined format and found the discussions productive.

“It was a large step in the right direction—the agenda and topics covered were much better,” said Chris Zigmont, Pedro’s general manager. “We have a responsibility to continue to push that agenda,” he added, referring to the need for the BPSA to follow through on the new research findings.

The BPSA commissioned Nicole DeHoratius, an assistant professor at the University of Portland, and Robbie Kellman Baxter, president of a strategic marketing firm, Peninsula Strategies, to examine why industry sales are stagnant.

“The biggest obstacle is that industry players are not willing to cooperate,” DeHoratius said. With fewer suppliers, a flat market and a declining number of retailers, there is a tremendous lack of trust, she said.

Baxter said the industry has been too focused on the bottom of the “commitment funnel.” The top is the casual consumer, which represents the biggest opportunity. The enthusiast is an attractive but smaller market at the bottom.

She said the industry seems to pursue a short-term strategy that is cheap and easy. This is what the industry does when marketing to enthusiasts. A long-term strategy means converting novices. It takes a long time, it’s costly, and requires collaboration.

Others made similar recommendations. Rob McSkimming, vice president of business development for Whistler Blackcomb, said the industry should work with mountain resorts. These resorts are spending hundreds of millions of dollars on improvements.

In contrast, he said, mountain biking occurs largely on trails built by volunteers. The bicycle industry has an opportunity to enlist the ski industry and its associations to develop more mountain bike parks.

Some resorts have yet to be sold on the concept, but Whistler is a proven financial success. Last summer it tallied more than 100,000 rider days, generating more summer revenue than golf.

The industry should also work with large corporations. For example, Humana, a publicly traded healthcare provider with corporate headquarters in Louisville, Kentucky, launched an employee bike-share program called Freewheelin’.

About 2,400 of its 8,500 employees at its headquarters have signed up to use the bikes, said Nate Kvamme, director of Humana’s Innovation Center. Humana, working with Trek Bicycles and Louisville’s mayor, Jerry Abramson, spent $70,000 to launch the program.

Scheller’s Fitness and Cycling, a local store, offers an education program and maintains Humana’s 100 bikes. Kvamme said he hopes to work with the industry to create similar programs nationwide.
John Burke, Trek’s president, said the industry can increase the number of trips taken on bikes from 1 percent to 5 percent, but it won’t happen on its own. “I believe it can happen in the U.S. if we go city by city,” said Burke. Suppliers need to get involved with local advocacy groups and city government, he added.

A number of ideas, generated during breakout sessions, included thoughts on how to coordinate a consistent message about the benefits of cycling; conduct more research to find out what casual and novice riders want; and develop strategies to help retailers deliver a uniform shopping experience.

“We’ve catalogued those ideas—we have them in the queue,” said John Nedeau, BPSA president and SRAM’s vice president of OEM sales.

But, he emphasized, pursuing them will require more time, energy and resources. “The BPSA can be a fantastic facilitator to manage our business,” Nedeau said. “But it’s going to require significant investment both from a human resources standpoint and a financial standpoint.”

The BPSA board will continue to support an annual conference. “It’s our collective view that it affords us an opportunity to address the very thing one of the research findings revealed—lack of trust in the industry,” Nedeau said.

For next year, the board is considering suggestions to combine its conference with an established event such as the National Bike Summit or the Sea Otter Classic. “We think those ideas have considerable merit,” he said.

—Lynette Carpiet contributed to this story.

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