Tuesday, February 28, 2017

Is Social Media Killing The Local Bike Shop?

Social media sites like Facebook are rife with pages that anyone can find a good used bike on.
Throughout the last decade or so, the bicycle industry has been banging on about how retail is changing at a rapid pace and how bicycle shop owners are going to have to change the way they do business to survive. Internet site sales by former mail order companies and massive retail internet sites like Wiggle, Chain Reaction, and others are often blamed for this malaise the bicycling retailer with a physical location is suffering. ("Brick & Mortar" in industry lingo.)

 I've not seen much, if any, chatter in the industry rags about how social media is cutting in on the action. I believe that social media has changed the landscape. There is a bustling business in used bicycles and parts going on right now on various social media sites, but the biggest of these has to be Facebook.

Thinking back on my time in this industry, it has become apparent that the social media era we find ourselves in was the missing link to a market place that was just waiting for the right answer to come along to its problem. Throughout the decades, there have been thousands of new bicycles produced every year. The way the industry used to work was based on enticing consumers to buy the latest thing in cycling. That may have been the safety bicycle back in the late 19th Century, or the bicycle with a freehub and a coaster brake in the early 20th Century. "Ten speeds", mountain bikes, and the ultra-lightweight, carbon road bike all had their heydays in the pre-internet world.  Part of the reason why was because there weren't any other venues or ways to pursue getting a bicycle easily than the local bike shop, or "LBS", for short.

Barely used bikes at bargain prices are listed all the time on Facebook.
Another big reason why new bikes always sold well was because it was hard to see what used bikes were available. Think about it- where did all the thousands upon thousands of bike shop quality bikes go all these years? 

You either found them randomly at garage sales, maybe traded in at the local bike shops, or they hung in various garages, barns, and storage sheds across the nation, never to be seen again. You might have had a vibrant sporting goods section in the local newspaper at one time, but you know what happened to all of those want ads? That is right, the internet killed that off. Besides, not everyone took a subscription out to a newspaper.

There was no real used marketplace for bicycles that was easy to use for decades. However; that all started to change with the advent of e-bay and Craigslist. Facebook has just accelerated the way used bikes are traded since the ads are free and there are no fees to trading beyond shipping the goods back and forth. There is no "negative feedback", ratings, or hoops to jump through. Anyone with a smartphone and a modicum of ability can set up an ad on Facebook's various cycling pages. Facebook cycling pages are basically modern day "want ads" without any cost.

Many times retailers will even use the various Facebook pages to close out excess inventory.
  Since the social media sites have created a marketplace for used gear which is easy to use and costs the users essentially nothing, it has accelerated the pace at which the marketplace for used bicycles and gear has grown.  Now used gear is a serious threat to new bike sales and new accessory sales. With all the barriers swept aside, cyclists don't even have to enter a bike shop or use an online retailer to get the gear they want. Simply staring at several cycling related Facebook pages on their cell phones or tablets incessantly until the right deal comes up is all they have to do. And let's face it, who doesn't have spare "device time" to burn up looking for a deal?

Now I've noticed a fairly new phenomenon where a user associated with a bike shop will list discontinued, demoed, or slightly used gear from a bicycle shop on various Facebook pages. The way this is done makes it difficult to pin down who the shop behind the deal is. Sometimes the use of stock photos is a clue, or the item appears to be in a shop setting. Sometimes I've seen comments in threads under sale posts that reveal that the gear or bicycle in question is indeed bicycle Brick & Mortar inventory. I guess it is a case of "if ya can't beat 'em, join 'em."

So, the bottom line is that these used bicycle gear sites and "pages" have to be taking a bite out of the LBS's sales. I can point to a few things I am aware of that affected the shop where I work, so I am sure we are not an outlier there. This is an undercurrent of the troubles that the bicycle business is experiencing that isn't being addressed by the talking heads and so-called experts in the industry. The bicycle business based its existence on "model years" and the "latest thing" for so long that the bubble of used gear that built up has now become a flood of commerce that is happening right under the industry's nose, and the industry doesn't even seem to notice it.


Smithhammer said...

If that's truly the case, then the smart LBS would have a section of the shop devoted to selling used gear, which is something I very rarely ever see, in any bike shop.

As such, social media venues are largely just offering continued life for items that would likely otherwise be laying around in someone's garage or going to the landfill. Not surprisingly, these venues have sprung up to address a need not being addressed by the vast majority of bike shops. Go figure.

If that's truly "killing" the LBS, then the problem is more than likely with the LBS. After all, there is no used gear if there isn't a continued market for new gear...

Ari said...

Thanks for writing this so well. When people are hot to get a new bike they will literally dump the old one for next to nothing. I cannot believe what some bikes are selling for. Should the LBS's take tradeins like car dealerships do? Because I don't believe we are ever going to beat the internets. Thanks for the post.

Guitar Ted said...

@Smithhammer- I think you are kind of missing the point here. First, while I agree that there " is no used gear if there isn't a continued market for new gear...", that kind of is a "Captain Obvious" statement. The real issue is that we are overproducing stuff, and we have been overproducing stuff for years and years.

This has caused there to be a backlog of used, neglected, or nearly forgotten stuff. This has resulted in a very rich inventory of "items that would likely otherwise be laying around in someone's garage or going to the landfill", as you point out. Social media is the avenue which these items now flows through.

Now as for how retail, in the traditional sense, could ever get involved is something that gets a bit sticky due to product liabilities, warranties, and service, all which consumers demand from Brick & Mortar shops, but are demands not put upon single individuals who make transactions on Facebook or wherever items trade hands.

This is why many shops simply will not deal in used gear. It is a huge risk. There have been lawsuits in the past that have dealt with failures in used gear that were even user related, but because the item came from a shop, the shop was nailed for liability. I even am aware of one famous case where the manufacturer ended up paying out on a claim against a failed brake straddle cable on a used bike which was originally manufactured by the company that was sued.

So, it is easy to sit and point fingers at the retailers for failing to jump on the used bandwagon, but it isn't as easy as it sounds. I happen to work at a shop which does sell used bicycles and some used components. The entire dynamic in transacting a sale or purchase of used gear is on a completely different plane than it is on social media between individual people buying and selling. The psychology involved in both situations is apples and oranges.

So, in my view, I am asking whether or not social media has unleashed an avenue of retail sales that is the real enemy of the survival of the LBS and not what the experts in the industry are saying it is. My question is not whether or not the retail bicycle industry should or should not engage in social media used bike and component sales, but what got us there in the first place is maybe what should be addressed.

Hopefully that makes sense.

Smithhammer said...

@GT - the legal issue of selling used gear through a shop is valid (though unfortunate, imo), but not insurmountable.

As long as we are talking about truly 'used' gear being sold via Facebook, etc, I have a hard time imagining this as a significant, existential threat to the survival of the LBS. I guess I also don't consider those types of sales to be "retail." It may be a contributing factor, and at the very least it certainly doesn't help, but I also think the very nature of what an LBS is is undergoing a forced evolution. We are in an "adapt or die" phase with brick and mortar shops, and that can be seen in far more than just bike shops. In some places, the evolution to something new and different may be impossible to sustain for a variety of reasons, and in other places (largely 'destination' places) the LBS as more than just a place for retail transactions can be seen, at least among those that are undergoing the change successfully. But that's a topic for another time, I suppose....

Bottom line - it's not easy to sustain a brick and mortar shop of any kind in this day and age. Increased online venues can be unwelcome competition. The shops that will survive are the ones willing to be the most creative. And even with all the creativity in the world, we will likely continue to see a reduction in the number of LBS. Personally, I think this is unfortunate, but the underlying reasons for this are far, far bigger than the bike industry.

Ben said...

One of my local shops buys trade ins when customers buy new gear and then uses their winter downtime to fix them up and sell them off in the spring when people get nice weather induced bike fever. Seems like a great way to keep busy during the slow months and be able to provide a selection of reliable low cost bikes to bring people in to the shop (instead of trying out a cheap low-end bike from a big box store).

Those folks often buying an inexpensive bike might then buy locks, lights, and other accessories and eventually want to upgrade to a nicer model once they justify that they will use their bike regularly. I've seen this play out with friends of mine who are only casual riders and got them in the door of my LBS.