Does The Cycling Industry Have a Data Problem?

 We've probably all heard the tale of COVID and the bicycle industry by now. Big demand leads to wiped out stores, which led to big orders, swamped factories, and late deliveries. Then the big glut of inventory hit just as consumer demand slowed way down, and we were supposed to be recovered from all of this sometime in 2024. 

Of course, it is a mixed bag, but it is obvious the cycling industry is still reeling from what happened and is not back to normal. Part of the reasoning behind this, in my opinion, is the industry hasn't known where it was at, in terms of overall health, for certain, at any given time in the past 40 - 50 years. 

This was, and still is, because most data is not shared across brands and marketing companies. Trek would rather Specialized not know anything about Trek's sales and vice versa. This goes for many brands, and is just an illustration to show the data gathered by companies who are the watchdogs for the cycling industry is, at best, vague. Making any observations on data from the industry is mixed with a healthy dose of speculation due to the current circumstances. 

Take this recent quote from a Forbes article by Jim Vinoski where Ken Lonsberg, CEO of SRAM, is quoted as saying, "I would say, as much as anything, people were hoping 2024 would be the recovery year, but they didn't really have much data or science behind it. They knew what their situation was, but they didn't know what their competitors or suppliers that they don't use. Nobody really knew how much true inventory was in the complete channel, they really just knew their portion.”

Contrast this with an industry dealing with similar issues stemming from the COVID days, the guitar industry. One of the largest producers of guitars and accessories is Fender who are led by CEO Andy Mooney who has led Nike, and did a stint with Disney. He is keenly interested in data.  In a podcast interview with Zak Kuhn, Mooney speaks to the issue and the data Fender uses to navigate the future. I was most interested in what I heard at about the 32 minute mark of the interview. (Click here for the full episode) 

Mooney stated that even before COVID that the "abandonment rate" for new guitar purchases was approximately 90%. So, that means 90% of new guitar sales end up with the purchaser putting the guitar down, or selling it used. Does any of that sound familiar?

A load of bikes donated to CVBC.

It does to me, but I've never heard a statistic like this coming from the cycling industry. I know it happens because I've seen the evidence. I see it almost every time I work at the Cedar Valley Bicycle Collective.  Bicycles with - if they had fifty miles of use I'd be surprised. Bike shop quality bicycles too. Not just big-box store stuff, although we see a fair share of these as well. 

So, it would be very interesting to know what the "abandonment rate" is with retail bicycles. Now that wasn't all I gleaned from the podcast. Mr. Mooney had this observation. He posited that if the guitar abandonment rate was similar post COVID to what it was leading up to the pandemic, then he felt the 30 million dollar boost in sales meant that 24 million dollars worth of guitars ended up either on the used market or were parked in closets and under beds. 

Does a bunch of used guitars flooding the market sound familiar to you who buy and sell bicycles? It sure does to me!

However; Mooney also said that a committed guitarist, a life-long player, would be worth $10,000.00 more in retail sales over the life of that player. This maths out to the 3 million players who did stick with the guitar after COVID being worth 3 Billion in retail sales for the remainder of their lives. 

Now, obviously, that is both impressive and speculative, to a degree, because Mooney was surmising that committed numbers were similar to pre-COVID data. But the point is the cycling industry doesn't look at sales in this manner. In my opinion, this way makes a LOT more sense. 

We do get some cycling experts saying that numbers of riders went up during COVID and the numbers of riders are still up. However; in my opinion, I don't think this can be verified at all. At best, it is a mere guess based off known industry numbers which are generally either incomplete due to most companies not sharing data, or are guessed at via import numbers and other extraneous data. For instance, do we really know the exact number of gravel bikes sold last year? Add in any used sales and I think the answer is that this is an impossibility due to the way the data is lacking in this industry. 

Until we can get real, hard data in the cycling industry, I don't know how anyone can diagnose or forecast this industries woes.