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Rick Vosper: Who's Number 1?

Published June 20, 2012

Conventional wisdom is the Big Three bike brands — Trek, Giant, and Specialized — control the lion’s share of the US bike market. Actual numbers in this business are almost impossible to come by, but you’d be hard put to find an industry insider who’d disagree with that statement.

And in terms of total unit sales, that wisdom is probably right. But when you look a little deeper, from the viewpoint of an individual consumer going into an individual local bike shop, the picture changes pretty significantly.

Turns out there’s a total of 143 bike brands active in the US market (down from 150 last year). Moreover, in terms of which brands are tops in which shops and/or markets, it’s not Trek, Giant, or Specialized that leads the pack. Not Raleigh or Cannondale or Haro or Diamondback or Schwinn, or any of the top brands we’d all expect.

On a purely representative basis, the leading brand in the country is…”Other.” And it has been for years.

The bottom line is that in terms or retail representation, anyway, none of the top ten brands is anywhere near as big as those bottom 130 combined. You’d have to merge Trek and Giant to equal those little guys in aggregate.

So individually, the smaller brands don’t pack much of a punch, market-impact-wise. But put them all together, and they’re a force to be reckoned with. Which has some very powerful implications for the bike-buying, consumer, for retailers, and for the industry as a whole. More about that in just a minute.

Source data for this claim is the just-released National Bicycle Dealer Association (NBDA) report, US Bicycle Market 2011, written by our friends at the Gluskin-Townley group. You can pick up your own copy for $299 from the NBDA, or save a hundred bucks if you’re a member there.

The results are based on a survey of more than 300 independent bike shops, and “the basic question,” according to author Jay Townley, “was to write in their bestselling bicycle brands, not numbers, but bestselling brands based on unit volume. So with Trek, for instance, 12% of retailers surveyed said it was their bestselling brand.”

Even more interesting is how the representation shakes out by shop size, says Townley. “At $300,000 or less, Trek is #7; Redline is #1. At $3000-5000, Trek is #2,Raleighis #1. Where Trek has its hold is in the million-plus-dollar retailers. Trek is not #1 in all regions of the country, nor are they #1 in all size stores. It varies.”

But wait, there’s more.

“Trek, Giant, And Specialized pretty much control the top 3 spots,” Townley continues. For the others, it’s very dynamic, depending on a lot of things, including who’s got inventory that year and how good it is in the eyes of the dealers. The only brand which held its position over the past four years is Cannondale at #8. Schwinn held the #11 slot from 2008-2010, then jumped up to the #10 slot in 2011.”

Makes sense, right? To maximize sales, the most powerful brands make it their business to be in the most powerful (generally = biggest) retailers. But not all bike shops represent all brands, and there’s plenty of excellent not-so-big retailers (and bike brands) in this country…which means there’s a huge number of bike shops representing non-top-10 brands. And neither those retailers nor those brands are going away anytime soon.

So What’s Your Point?

What does all this mean for the bike-buying consumer...or the bike-selling retailer, for that matter, or the bike-supplying manufacturer or distributor? Plenty.

For one thing, it’s a classic representation of the Long Tail Effect, and it’s one of any number of business-school phenomena that help make the bike business so interesting...or completely frustrating, depending on your point of view.

For another, it means that the doom-and-gloom scenario we’ve been hearing for years in this industry is a bunch of baloney. You know, the one where a few monolithic bike brands and a relatively small number of high-volume retailers effectively control the entire bike market. Well, that stuff ain’t likely to happen any time soon, at least not without some huge shifts in the market.

So what will happen over the next 5-10 years? Glad you asked. Stay tuned.


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