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Retailers Worry Over Future Coasting Sales

Published March 17, 2008

BY MATT WIEBE

IRVINE, CA—When Shimano’s Coasting bikes made their debut on retail show floors last year, sales were aided in large part by the amount of media coverage the company generated. But as new models hit the floors this season, retailers are uncertain they will sell-through at the same pace.

Retailers, who typically sell to enthusiasts, said they were surprised last summer when non-cyclists made their way into their shops. Coasting bikes had targeted the 161 million American non-cyclists and it seemed to be attracting some of
them.

“I was really bullish on Coasting at the launch. We marketed aggressively, had pep rallies for the sales staff and had plenty of new bikes on the floor, and initial sales were
strong,” said Joel Grover, a buyer at Bike Gallery in Portland, Oregon.

Across the country at Wheel and Sprocket in Wisconsin, owner Chris Kegel said the launch went off with more excitement than anything he remembers. National media coverage on TV, in newspapers and magazines was phenomenal and Kegel said local papers were also writing about the bikes.

“The automatic shifting really resonated with customers. Shimano is onto something and the campaign brought new,
recreational cyclists in our door,” Kegel said.

“We want to maintain this business. We want more recreational cyclists to feel comfortable cycling, and in visting our stores.” However, this may be easier said than done.

Retailers say Coasting bikes were more difficult to sell a few months after the launch than the early excitement suggested. Few think sales of Coasting bikes this season will match last year.

While Coasting targets non-enthusiasts, the retail channel doesn’t and that is proving to be a catch-22 for Shimano. Sales staff and customers are enthusiasts, and enthusiasts have responded unfavorably to the automatic-shifting group.

“The bikes look good and that’s helping to sustain sales, but enthusiasts buying a Coasting bike as a second or third bike for shopping don’t like coaster brakes, and the automatic shifting is hard to get used to,” Grover said.

While the media blitz during the launch brought non-cyclists into stores, these customers tend to be fair-weather riders and and seldom buy bicycles during winter, most retailers said.

Another hurdle retailers face is the price points. Coasting bikes are expensive for the target market. The dynamo hub and computer-controlled shifting come at a premium, with Coasting models this season retailing between $450 and $800.

Typically, when a new cyclist comes into a store looking for a Coasting bike, sales staff find it is all too easy to send them out the door with a cheaper, lighter hybrid or cruiser.

But some Coasting suppliers are finding some sales success despite that. Raleigh USA, for example, quickly sold out of its 2007 models and is stepping up production this year.

Raleigh product manager, Kyle Casteel, said a big part of the company’s success was to keep costs down to better compete with other models on the floor.

Additional models will become available as Fuji, K2, Phat Cycles and Schwinn join Giant, Raleigh and Trek, which supported the launch last year. Retailers who carry Coasting bikes said staff education and buy-in is important for sales to continue to grow.

“A first-time customer doesn’t know if a $500 or $600 bike is a bad value until they are told so. The problem is that sales staff have a hard time selling a bike they don’t really believe in,” said Kegel.

Shimano is currently mailing out a dealer training kit to overcome staff resistance. The self-contained, one-hour training package includes an updated Coasting DVD, teacher and student materials. Shimano is supporting that effort with an online testing component and a new Web site, www.sellingcoasting.com.

“There is no way we can extend the media excitement of the launch, which really took us by surprise. So for Coasting year two, we are focusing on dealers and will be helping them grow their local market,” said Shannon Bryant, Shimano’s Coasting project coordinator.

Shimano also will send out a demo van with a few models. The demo tour has yet to be finalized, but Bryant expects it to visit at least 10 major metropolitan areas. It will also be at its successful Bike Town Coasting giveaways.

“And we will be helping dealers develop their own demo programs. The whole push is to get more first time bike riders on these bikes and to hook them up with their local dealer,” Bryant said.

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