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Retailers cry foul over early-season product intros

Published May 7, 2013
"The perfect storm of bad weather and high inventory and 'What the hell were you thinking?'"

DEWITT, MI (BRAIN) — When the winter weather finally relented in this town north of Lansing, retailer Jon Vandercar looked forward to selling some of his inventory of 2013 model road bikes, which he received just before his region’s long cold season began last fall.

Vandecar’s hopes were dashed by news from Shimano in late April that it was upgrading its upscale Ultegra group with an 11th cog.

“It was the perfect storm of bad weather and high inventory and 'what the hell were you thinking?'” said Vandercar, who has worked in bike retail for more than 25 years, the last three at Bikeworks, the store he owns in Dewitt.

“Ultegra customers are sort of borderline: They are enthusiasts or they are people who just like nice stuff, but odds are they are going to do their research and odds are going to wait [when they learn about the forthcoming updates]. So I have all these nice bikes on the floor and I am kind of dead in the water,” he said.

While early or midseason product introductions are not unusual, this season’s announcements from Shimano and SRAM (which announced earlier in April that its top-of-the-line Red group would soon get an 11th cog) came while the U.S. industry was sitting on a high inventory of road bikes after a tough winter and late spring across much of the country.

This year’s winter weather was especially difficult coming after the 2012 season, which was mild in most regions.

At the end of March, suppliers were sitting on inventory up 40 percent in dollars and 46 percent in units compared with the same month last year, according to the BPSA.

Shimano and SRAM each are careful about the timing of their product releases. Shimano typically shares product information with the media under condition that they not publish the information until a specified date and hour, a so-called “embargo” policy. Shimano shared information on the updated Ultegra groups with media outlets in late February on condition that it was not published until midnight, Osaka, Japan, time, May 1.

“We go to great lengths to keep the information confidential to the public for as long as we can,” said Yutaka Taniyama, vice president of Shimano American’s bicycle component division, in a statement released to BRAIN.

“The current market is moving rapidly and unfortunately we do not always have the ability to react to changes in the market quickly and flexibly enough. This becomes more complicated when it involves the needs of our global customers that require a long-term planning and development. The IBD is very important to our business and we are committed to continuing to take actions to support this channel,” Taniyama said.

SRAM also releases information under embargo.

This year SRAM managers felt they needed to add the 11th cog to the brand's Red group to remain competitive with Campagnolo and Shimano, said Michael Zellmann, the company’s road PR and media manager.

“From an OE/bike brand perspective, we are very often responding to competitive pressure; our prime competitors have 11-speed and bike brands require that specification from us for us to maintain/grow our business,” Zellmann said.

“Based on bike brand buyer behavior, and as much as we empathize, we would lose share if we made the release decision solely on the retail inventory concern. We consider every dealer our partner and we are always challenged with the perfect time to release new product,” he said.

Zellmann said SRAM’s goal is to keep its new product information under wraps until it is 30 to 60 days from the marketplace. For the updated Red group, that timing coincided with the Sea Otter Classic, where the company has traditionally announced new products in recent years.

 

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