Saturday, January 28, 2023

Hard Times Straight Ahead

Jenson USA Tweet on Marin BOGO deal.
 Overstock, supply chain issues, price increases, price decreases, and supply shortages. How can all of those seemingly disparate things all be true at the same time in the bicycle industry? 

Such is the twisted state of retail at the bike shop right now. Several lower to mid-range models are piling up in warehouses. This all while high-end, range topping bikes cannot be delivered because things like XTR cassettes, which are still six months out, are not available to put on those upper end bikes. 

Meanwhile, brands are trying to clear '22 and incoming '23 bikes with huge discounts. Specialized has some models at 40% off. Marin is doing a "Buy One Get One" scheme (BOGO) on select models where if you purchase one of those bicycles you can get a free kids bike or even another adult bike. 

The pressure to survive this madness is immense. Some brands have laid people off (Specialized) and I suspect others will follow. But what may have the longest lasting effect on cycling, and the bicycle retail sector in particular, is what all this is doing to consumer perceptions. 

During COVID, bicycles were in short supply. High demand = High prices. There was no discounting, which has been an embedded sales tactic in retail bicycle stores since, well.....forever. The hope was that the pandemic would allow discounting model years to die. Well, that ain't gonna happen now, obviously. And consumers are not forgetting what happened. 

Many consumers are angry with cycling as they see the current issues and discounting as evidence that they were gouged in 2020, 2021, and 2022. The new discounts, to their way of thinking, are not only justified, but proof that the cycling industry was profiteering from the COVID situation unfairly. Now the businesses are reaping their "just rewards", in their view, and some even hope that the cycling industry suffers loss of brands and business failures. Those scoundrels must be punished!

My thought is that this misconception of what is really happening won't soon go away. The result? People will be less amicable to shop employees, shops will find getting good help will be even more difficult, (because no one likes dealing with angry, upset consumers) and many shops will go out of business as a result. 

Hard times incoming.

1 comment:

baric said...

There's the whole problem in a nutshell. Whether it's price gouging or standing up there in front of camera publicly lying through your teeth, eventually the truth is going come up and bite you in the ass....