Thoughts On An Industry In The Midst Of Changes: A Parallel Universe

 Last week I posted my first article on this subject with thoughts I had concerning why the bicycle industry finds itself where it does now and what I thought about what the industry could do going forward.

A couple of days later I posted this follow-up, and I figured this would be the end of the discussion from my end concerning this pickle the industry is in these days. However; I've come across something which made me think and I feel this source I am sharing today has several interesting and applicable thoughts for how the retail bicycle trade might look going into the future. 

This all came about as I was on You Tube and saw a thumbnail for a guitar shop whose videos I have watched a few times. The title "You're Fired!- Guitar Stores Are Firing Customers", made me think this would be a video about customer relations and how sometimes retailers have to tell customers to walk. While it was a tiny bit about this subject, there were a lot more ideas shared about how customers are "fired" by what retail is becoming in the guitar world.  

The retail bicycle trade is not alone in today's difficult marketplace, with regard to post-COVID inventory issues, and lessons learned from COVID times. A run on guitars during the pandemic and the resultant over production of instruments during and after COVID have caused many similar issues in the guitar industry as we see with the bicycle industry. So, I feel what Mark, the man in the video, has to say are relevant and applicable here. A somewhat parallel universe to bicycles, you could say. But I also think the guitar world is a bit ahead in their thinking as a group versus the bicycle folks. 

First of all, independent guitar shops are disappearing across the country. Just as with the retail bicycle trade, shops are finding the economics of selling products with ever lowering profit margins in competition with online retailers and even their own vendors is suffocating.

So, with less and less retail outlets, customers are beginning to forgo the "I have to touch it and see it first" traditional way of the past for a more "instant gratification" model which also reduces human interactions.  You may think this is anathema for your shopping experience desires, but many younger customers see this as a "normal" way of transacting today.

Due to what COVID forced on retailers, many shop owners are also finding the less human interaction mode of selling is more palatable. Retailers do not have to deal with various personalities and find ways to placate them. As Mark in the video says, "Buy it or don't!".  This parallels the D2C retail model of Canyon, and now some other major cycling brands who are following suit. Of course, we can point out several accessory brands which have been onboard with this sort of retail strategy for years already.

Another interesting "the customer is fired" strategy the guitar world is employing is the "by appointment only" model. This eliminates the, as Mark in the video says, "randos" and puts customers in your shop who probably have a very high percentage of parting with their money. You, as the shop owner, have a focused interaction with a motivated customer. A much easier sales approach, and generally a much more successful one.

I have noted one local shop here in my area employ this model for the past several Winters now. I feel as though this shop may just keep on doing the "by appointment only" model all year. I find it interesting, and I can see how it keeps day-to-day nonsense out of the retail experience. Whether or not it will be profitable for this shop, I cannot say

Then there are the local, "garage shops" which have always been there, but now may find themselves becoming the focus locally for the everyday repairs like flat tires, adjustments, or cheap sources for parts and accessories. In the bicycle world, this is mostly the realm of the "mobile shop". However; I think if manufacturers, and especially distributors were to loosen their reins a bit, we might see the neighborhood "garage shop" become a viable source for bicyclists needs at a ground floor level.

Anyway, it is an interesting video and I feel it has  information which parallels the retail bicycle issues we are experiencing today. Give it a listen and see if you agree.

Thoughts On An Industry In The Midst Of Changes

The past several weeks have been something of a sad tale if you have been paying attention to the business of bicycle sales and repair. Brands writing off debt, factories slowing down, shops still having massive discounting on inventory, and mechanics telling tales of woe concerning Direct To Consumer sales.

There are less retailers in many areas. Sales are not picking up, and with tariffs being on-again-off-again, marketers are left wondering how to price goods. My bet is they will err on the side of being more expensive, but this is just my opinion.

Personally I see a chance for things to shift radically in the next five to ten years. With big brands and shops being less of a resource and smaller, niche brands and shops filling gaps where there are voids being created. And voids in the marketplace will be created, I think. 

This may take a while to develop. In the meantime, I feel the used marketplace for bicycles is going to be a bigger deal than ever now. I think local, small scale repair and maintenance will follow along with this. It is already apparent to me, as I work in Waterloo, Iowa, that a need is arising for simple repairs and bicycle knowledge. New collectives are forming here in Iowa which exemplify the style of community service and support to a segment of the communities which traditional retail bicycle shops have been unable to reach or even begin to figure out how to do this. 

The catch is how to make it work economically. I think it will happen as "traditional" retail bicycle prices, labor prices, and bicycle technology gets too expensive for many people to attain to.  

The retail prices for high-end bikes is insane. (Image by A. Andonopoulous)

Bicycle prices, in particular, are beyond ridiculous in many instances. This is another thing I think is unsustainable. It is one of the main drivers of the used market. I see this a lot at the Collective.

Secondary to the pricing, and probably what drives prices so high, are the ever changing "standards" and  unfriendly to maintenance designs which many newer bicycles have now. Tools which were never necessary before must be purchased so a mechanic can work on certain brand's proprietary parts and accessories. 

I feel that this is why so many 1990's and early 2000's bicycles are still desirable, serviceable, and as long as parts are made to revive them, will be around for another 25 to 30 years. These are the bicycles which do what bicycles are supposed to do very well without "gizmos", proprietary parts, or fancy electronics which can fail and be made obsolete over time. Meanwhile most of these newer, and especially the electronically infused newer bikes, won't be sustainable.

Of course, sustainable product which does not need replacement every so often is not an interesting concept for larger brands and manufacturers who base their existence on planned obsolescence and titillating new tech. However; it is my opinion that this string has about run its course with many riders.

As seen on Threads

On The Other Hand... I was passed on my ride this last weekend by a youngster on an electric scooter. First of all, it was great to see a young boy outside, and him not having his face buried into a phone, or inside staring at a screen playing some "action game". However; I also felt he was only getting half the picture right. 

Without putting in an effort to gain that intangible reward we get when we are done with a ride, feeling all those endorphins, or whatever it might be you are feeling (Sore muscles? Being tired? Satisfaction in going beyond perceived barriers?)  I feel like youngsters, like this boy I saw, are short-circuiting what it means to be outdoors and experiencing Nature. But putting forth an effort that might be painful at times, or cause physical duress of any sort, seems to be something to be avoided (more) now. So much so that now a bicycle, or scooter, is not "interesting" to young folks unless it has a motor. And, of course, when these youngsters become older... Well they most likely will be in a car, truck, or SUV of some sort, powered by a motor of some sort as well. Cycling? Whatever....

So, maybe it doesn't matter what happens to the bicycle business. If young people are not interested at a level which might sustain the sport at a high state of existence, or at least where it is now, then big changes will be afoot.

But those are just my rambling thoughts as I sit here on a chilly March morning.

Two Things

1959 Schwinn Corvette 3 speed

 Cruiser Update:

Last week I posted about the Schwinn Corvette 3 speed and how I had freed up the frozen rear hub. I thought I would give you all an update on this bike. I've taken things as far as I can given the mission of the Collective. Now it will have to move on to someone else that will either give it a home as a object to admire or as a restoration project. 

My goal was to make the bike operative, inspect it, and clean it up. I have no idea how long the bike had set, but given that it will be 66 years old this year, I'm betting it sat for the better part of half a century. 

I think I am on to something here because this bike has all of its original parts right down to the grips, pedals, tires, and all else. There is only one thing missing here and that is the headlight. The mount is still there, but the piece broke when my assistant at the Collective was doing the initial clean-up on this project. 

What amazes me about things like this Corvette 3 speed is the detail on the bike. There are things I found on this bicycle that made me stop and wonder. Like that "AS" stamped stem wedge bolt. Or the piece of steel, about 3mm thick, tack welded behind the chain guard where it attaches to the rear of the frame. A thing done to help reinforce that area so it would not fail. Did any buyer of a Schwinn cruiser ever know about this detail? I doubt it, but Schwinn did this to make the chain guard more durable. 

Other details like the bearing races, which are machined and not stamped out like they would be now, and the sharp, crisp edges on bolts, are things you just never see on bicycles today. Of course, ALL the fasteners were SAE standard and not Metric. Not that one is better, but it just points to the USA manufacture of this piece. Which leads me to one more thing about bicycles for kids from this era....

They are TANKS! These things were made to last and last. Wearable parts are serviceable and replaceable, well.....back then they were! It is not easy to find parts now, but you get the picture. 

Bonus picture of this Schwinn Typhoon from 1963 which was donated with the Corvette.

 
We received a Schwinn Typhoon, which according to my research, (which could be wrong), is from 1963. These two Schwinns came in together, and both were salvageable. The Typhoon, if anything, is even in better shape than the Corvette. It simply is mind boggling to me that any boy's bike from this era would ever survive use. I am left to assume that both bicycles were little used, seeing that both have original tires, and other wearable parts like the grips and pedals. Cool feature on the Typhoon= It has a "red stripe" two speed kick-back hub. It works as well. Pretty neat. 

These are available from the Cedar Valley Bicycle Collective if you are interested. My thought is that we'd raffle them off as a fundraiser during our next membership drive, but that is not written in stone. Hit me up if you are interested.

More Industry Musings:

Last Sunday's post stirred up some of you out there. I could tell by the numbers that post drew out of the gate. This isn't a subject which is relegated to me, or even a few social media savants. This seems to be perplexing and has had an effect upon many folks from disparate parts of cycling. 

Once we exited the pandemic, many were predicting that sometime during 2024 things would right themselves, inventory levels would be "normal" again, and that we'd be out of the woods in terms of the post-COVID sales slump. 

Well.....that hasn't happened. So, we are seeing many folks scratching their heads wondering what is going on here. I've seen athletes posting about lost sponsorships, I've seen sales discounting continuing, and rumors worse than anything I've heard before are beginning to swirl. 

N.Y. Roll asked me to listen to a podcast, (I won't name it here because I don't want to throw anyone "under the bus"), and I gave him my reaction as to what I think is going on here. Like I said Sunday, part of this is the old way of thinking which includes just pumping out more product every year that the industry assumes will find a home. Well, that doesn't seem to be working anymore. Anyway, here are my thoughts in bullet point form:

1. The all-human powered bicycling folks are aging out of cycling
2. Many youth are not interested in cycling, (USA) and if they are, they are most interested in assisted cycling or e-scooters. They are least interested in 100% human powered cycling.
3. There are NO SAFE PLACES TO RIDE (in most cases)
4. COVID skewed the market. Those that would have purchased bicycles from 2020 - 2025 did so in two year's time from 2020 - 2021. They have their bicycles and are out of the market. 
5. Overreaction to demand spike caused over-production leading to massive inventory levels at historic levels which are still being worked through. 
6. Current pricing, even at discounted levels, is not attracting buyers as hoped

Meanwhile employees, rents, bills, and  all else needs to be payed out but revenues are lacking in many cases. Even the robust European e-bike market pre-COVID has taken it on the chin. So, it is a perplexing issue and unless more people can be enticed into cycling I just do not see how this gets better. 

Maybe I'm all wrong....