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Suppliers Shift to Value-Driven Product Lines

Published July 31, 2009

BY NICOLE FORMOSA

SUN VALLEY, ID—Dealers can expect more value-driven, price-conscious options for 2010 if product displayed at PressCamp is an indication.

Exhibitors at the June media event showed product in line with a more conservative approach toward consumer spending.

The high-end Swiss brand BMC Racing, whose sales have fallen this year, will toss out model years and re-release the 2009 Pro Machine and Race Master bikes.

The SLC01 Pro Machine frameset will be marked down from $3,899 to $2,999. A complete bike with SRAM Force components will cost $3,999 and the Ultegra build will be $3,849. The Race Master frameset will be priced at $1,999 with the most expensive complete bike build running $2,999.

Without model years, dealers should be able to maintain the value of their inventory, said Derrick Lewis, BMC brand manager.

“BMC has been built up with a luxury brand image, but to keep things moving and increase sales we may have to chip away at that brand image,” Lewis said.

One advantage BMC may have over its other niche competitors is its alignment with QBP, the exclusive U.S. distributor of the Swiss brand. With QBP, BMC dealers are asked to buy three display models on terms in October with the bill due the following July 31.

When retailers sell a BMC, they order the custom bike through QBP’s Dream Cycle program and can begin selling off the demo models on July 1. That way they only risk the investment of three bikes, Lewis said.

BMC has also been able to trim costs with the addition of Ridley to QBP. Those two brands, along with Lazer helmets, now fall under one management group. Each will have its own brand manager, but logistics and warranty will use shared resources.

“The idea going forward is to offer a [financial] benefit to dealers taking part in a little bit of each of these product lines,” Lewis said.

Lazer is also using its QBP connection to its benefit by catering to retailers who want to run leaner inventory in this uncertain economy with just-in-time ordering instead of requiring a large pre-season order.

“You can run leaner, but you have to be smarter about making sure you have what people need,” said Micahel Pederson, Lazer brand manager at QBP.

Meanwhile, Blue Competition Cycles is rounding out its line with mid-priced carbon road and time trial bikes. Though Norcross, Georgia-based Blue was up 20 percent year-to-date in June, the company realizes it needs to fill out its line to spur future growth.

Last year, it introduced the RD 1 road bike with carbon frame, fork and steer tube in a 105 mix for $1,995.

“It’s been the best-selling bike we’ve ever had,” said Chance Regina, product manager for Blue, which has been selling bikes for five years.

The problem was the next model up cost $4,400, so this year, Blue has added a women’s-specific frame spec’d with Rival for $2,600; a men’s Rival build for $2,600; and an Ultegra/Dura-Ace mix for $3,400 to the RD line. For 2010, Blue will also release a carbon time trial bike with internally routed cables, BB30 bottom bracket and Shimano 105 components for $2,500 to reach a broader audience.

On the accessories side, Pedro’s introduced two new tools that will cater to the more price-concerned consumer and bike shop mechanic. The Evolver multi-chain tool is compatible with Campagnolo’s new 11-speed chain, as well as 9- and 10-speed chains. The Tülio is a 99-gram multi-tool that replaces a standard quick release and costs $40.

“Everybody’s looking for improved value and the distributors, retailers and consumers, we’re benefiting because people are reusing and keeping their bike going, but that doesn’t necessarily mean they’re throwing their full wallet at keeping it going,” said Chris Zigmont, chief executive officer of Pedro’s.

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