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Rick Vosper: Flat is not the new up

Published May 22, 2012

 

 

My friend and colleague Ray Keener makes a good point in this BR&IN blog post from last week when he asks the question, "Are flat bike sales for the past 35 years a good thing or a bad thing?"

Among other things, Keener points out that retailers are experiencing higher equipment and service-category sales, (slightly) increased margins on new bikes, and higher average selling prices on new bikes overall. And those are Good Things, right?

Absolutely.

But there's a darker and all-to-often overlooked side to the "flat sales" trend which is the real driver behind discussions as to whether the bike industry should be reaching out to new markets.

But First, A Brief History Lesson.

There's a notion in the industry—as evidenced by the all-to-common "past 35 years" notion—that sales have pretty much always been flat. And a lot of people I've talked to seem to believe that. But actually, our current stability has only been in the past 20 years or so, since the end of  of the Mountin Bike Boom in the late 1980's.

When we look at actual bike sales through all channels, the National Sporting Goods Association (NSGA) numbers show that the all-time record year for bicycle imports was 15.2 million units, way back in 1975 at the height of the Ten-Speed Boom.

By the early 1980's, sales had shrunk by almost half, and it took the introduction of the mountain bike to pull our bacon out of the fire and usher in the current period of stability. By the way, the folks at the NBDA have a nice page of stats on this sort of thing which makes for highly instructive reading.

The larger point isn't so much whether sales have been flat for 20 years or 35, but that we've arrived at a period of remarkable stability in the evolution of the industry. And a big piece of that stability has come as a result of cultivating the enthusiast market—which has consisted overwhelmingly of middle-aged white men— at the expense of other groups and riding styles.

So Here's My Point.

Don't get me wrong. I have nothing against middle-aged white men who like to ride bikes. Heck, I am a middle-aged white man who likes to ride bikes. And the numbers show that overwhelmingly, we're the guys buying those high-price-tage bikes that have helped to keep the industry relatively stable for the past twenty years.

But there are two big problems with an aging population of baby boomers as a market base.

The first is that we're not getting any younger and eventually we'll have to stop riding and buying all those nice bikes. And once that happens, the bubble bursts.

But the second and larger problem is that by building our long-term business around middle-aged enthusiasts, we've effectively shut out lots of other people who might be perfectly good customers for the products we make and sell...especially once we come to our senses and realize that the current group of enthusiasts isn't going to be around forever.

Fortunately, there's some good news just coming out on that front...and which I'll be discussing on my next post. Stay tuned.

 

 

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