Predictions for the 2014 American Bicycle Market

Having studied the U.S. bicycle marketplace for the last decade, the Gluskin Townley Group has learned to respect trends as powerful predictors of future business performance…and they also tell a very important story.

We have followed this story for the half-century of our own experience in the bicycle business and concluded that it is time for the rest of the U.S. bicycle industry to tune in and really listen to the factual story that has led to the flat U.S. bicycle business that can now only grow if it changes the way it does business to get in step with the changing demographics and opportunities of the New America.  Many industry stakeholders hear and feel the winds of change and there is a new level of concern for what is coming and what is already here, but not sufficiently understood.

After much internal conversation we recognize the time is right for us to embark on predicting what we are confident in based on our study of economic data, the American bicycling consumer, technology, and the demographic trends that firmly supports our findings.  However, we also recognize that the world is in constant upheaval and presents different challenges and opportunities on an almost daily basis. So, we also present the following predictions with a level of caution that comes from the wonder of never-ending surprise and opportunity.

Weather will play an important and growing role in the American Bicycle Business in 2014 – but needs to stop being a whipping boy and given more than lip service!   Weather has been blamed for all that ails the U.S. bicycle business…but in reality is only one misunderstood and misused factor that needs to be taken into account in planning and forecasting. 

While vitally important, Weather isn’t the only factor affecting the American bicycle market and business, and hasn’t been for over a decade.   Yes, Mother Nature has her own time table and sense of humor when it comes to the weather, but global warming and climate change have made weather an important factor impacting the U.S. bicycle business and thanks to the federal government it is a factor that can be planned for with a higher degree of reliability than in the past.  It will still cause inconvenience at its best and disaster at its worst. However, for outdoor activities such as bicycling weather is a constant that needs to be understood for what it is and taken into account in both short and long term planning.

The Federal Government has made vast improvements in weather forecasting and the bicycle industry, like the apparel industry, can and must make better use of these tools to forecast and plan for their businesses. Retailers can use these tools to plan their merchandising around local weather forecasts while suppliers and distributors can do so for their regional or national forecasts.

Where to look? You can begin by visiting www.noaa.gov through which you’ll be able to find weather forecasting tools and services that will help you plan for your annual product portfolio, allowing you the flexibility to change your product selection from season to season.

Remember this quote…”After you determine the product or service you have to sell, you’d better find out who buys what you’re selling.  What are the customers?  How do you reach them?  Above all, are there enough of them?  And is their number expanding or shrinking?”  The quote is from Kenneth W. Gronbach author of The Age Curve: How to Profit from the Coming Demographic Storm and we have emphasized the last two questions, the answers to which are the foundation for our next prediction. 

The American Bicycle Business continues to struggle with sales of new bicycle units in 2014.  Retail dollars generated by the sales of new bicycles have steadily increased over the last decade, particularly in the bike shop channel, but we caution that 2014 might see the end to this trend as well.

In answer to Gronbach’s first question: “…are there enough of them?” Generation X, the generation that is driving the U.S. bicycle business right now – today – is at least 11% smaller than the previous generation that drove the bicycle business ten years ago!  Unless the bicycle business changes the way it does business – it is going to attract, on average, fewer shoppers and customers by continuing to do the same things it did ten years ago!   The result has been the flat to declining U.S. market for new bicycle units that the industry has experienced since Generation X took over as the drivers of the retail market from the Baby Boom generation. 

In response to Gronbach’s second question: “…is their number expanding or shrinking?” there won’t be more Generation X’ers… they have all been born, and this is a demographic fact of the American Bicycle market, that has to be dealt with by the bicycle business changing the way it does business if it expects a different, or better result..    

For both the supply side and retail channels this is a matter of reaching out and attracting more shoppers for new bicycles, and increasing conversions and close rates.  In short…the bicycle business needs to become more inclusive and less exclusive and invite everyone to shop for a new bicycle so there are more conversions to an actual purchase!

Women become the New Majority in more aspects of the American bicycle market in 2014.  Women currently represent 51 percent of the U.S. population and were 53 percent of the voters in the 2012 Presidential election. They also hold the purse strings and influence or make 80-85 percent of household purchases. The American Bicyclist Study reports that women make up 55 percent of Generation X bicycling consumers.

With these four data points as background, it’s important for the industry to recognize and act upon the fact that women are fast gaining share of American bicycle riding participation and they are seeking, creating, and carving out their versions, not the mainstream bicycle businesses version, of their bicycling lifestyle in the communities in which they live.

 

The American bicycle business made a conscious decision to focus on the sport of bicycling and not the activity and to also leave unchallenged the Endemic Prejudice that has become pervasive throughout the bicycle business.  The combination has chased some women away from both bike shops and bicycling altogether.

With women becoming the new majority on their terms, the American bicycle business needs to move quickly to catch up and learn to play a role, or it will be left behind and may be made irrelevant, in whole or part, by the new majority!

Minority-Majorities emerge as drivers of more local and metro-urban bicycle markets in 2014. Over the last two decades bicycling has become an activity of upper income, college educated, white, male Americans.  Women are quickly closing the gender gap and having an influence on the bicycling lifestyle, but the “sport” of bicycling is dominated by upper income, mostly white American households.  . 

However, the American Bicyclist Study reveals that the profile of adult cyclists, living in the top 12 metropolitan cities, is significantly non-white. This New Coalition is most evident in metro markets that are currently or on their way to becoming minority-majority populations.

The American bicycle business needs to get its head around the new American Coalition and the fact that there is no longer one big market, but a multiplicity of neighborhoods and communities with diverse populations driving shop local and buy local movements.  Here again, the American bicycle business needs to move quickly to catch up and learn to play a role, or it may find itself left behind and irrelevant. 

Children and Juveniles will continue dropping out of bicycling in 2014.  During the twelve month period from 2011 to 2012, 3 million Americans 17 years of age and younger dropped out of bicycle riding participation.  If the current trend continues there will only be an estimated 6 to 7 million Americans 17 years of age or younger participating in bicycling 6 or more days per year in twenty years. 

This is an urgent and negative trend that the American bicycle business needs to understand and determine a corrective, or at least a positive course of action within the near-term to attract younger riders and families to the activity.    

Used Bicycles will continue to increase the stress on new bicycle forecasting in 2014.  Used bicycles have been rising as a significant factor in the American market since about 2007.  By 2008 several research firms reported used bicycles as accounting for 25% to 30% of bicycle ownership.  Used bicycles represented 9.1 million, or 36% of bicycle ownership in 2012 and 7.6 million or 26% of bicycle ownership in 2013. 

With this market penetration used bicycles have had a definite impact on the new bicycle portion of the American market and are a definite factor in the problems forecasters and planners are having in looking ahead and ordering closer to the right quantities of imported bicycles – which account for over 98% of American market consumption of new bicycles. 

In Conclusion:

We see two distinct bicycle businesses emerging in 2014…one big, traditional and flat with no growth, and the other embryonic and small, but all about growing locally.

Janus, the Roman god of doorways and beginnings, is known to have two faces, looking in opposite directions – we imagine he is looking back at the past and ahead to the future.

Changing demographics and the resulting New American Bicycle Market have generated a wide disparity of responses from the traditional bicycle business…and from the new wave bicycle business that has emerged ”under the radar” and off the books as far as American bicycle business data and statistics are concerned.

What we see emerging in 2014 because of what we are calling the new wave and the differentiation between them are at least two distinct and definable American bicycle markets, each with their own economics and economies.  

One is the established, traditional bicycle business that is clearly larger and well established, but is looking back to what was and the way it was.  We predict that this larger American bicycle market will continue to struggle in 2014.  One of the signs of the struggle will be the consolidation that has already started, and is a function of expanding market share by acquisition, but not actually growing the overall size of the American Bicycle market.

We also see the traditional, mainstream bike shop channel of trade continuing its two decade flat, no growth trajectory in new unit sales, with the possibility of a decline in both units and the retail value of new bicycles during 2014.  Making a real profit on the retail sales of new bicycles will slip further from possibility for bike shops, increasing the pressure to make a fair profit and living on the rest of the typical bike shops retail revenue. 

We look at the other face of 2014 – the New Wave Bicycle Business and Economy, and see it looking to the future and new and innovative ways of creating individual bicycling lifestyle solutions, and actually growing the size of bicycle market in cities and neighborhoods…in other words, on a local basis. 

This emerging new wave business will remain small in 2014, and largely under the radar, but will begin to challenge the traditional, main-stream bike shop channel as cities become the drivers of the new American bicycle business.  This isn’t to say that smaller towns and cities won’t grow as bicycle markets – but they will have their own shop-local buy-local flavor and response to providing individual bicycling lifestyle solutions! 

For more information contact:

Elliot Gluskin

Managing Partner

The Gluskin Townley Group

elliot@gluskintownleygroup.com

Jay Townley

Partner

The Gluskin Townley Group

jay@gluskintownleygroup.com

www.gluskintownleygroup.com

What If It's Not Just The Weather?

2013 will go down in the record books as an off year for the U.S. bicycle business.  The weather has been blamed for the results this past year…but what if it isn't only the weather? 

An online poll conducted by Bicycle Retailer And Industry News that was published December 5, 2013:  “…shows that sales over this past weekend were down this year for most bike and specialty retailers, with 48 percent of participants reporting that holiday sales are so far slower than expected. Just 13 percent reported better-than-expected sales.”

We have been watching the trends for several years now, and have concluded that weather is only one of several major factors impacting the American bicycle business and market – and current and future bike shop sales and revenue!

The table below shows nine month YTD sales by U.S. brands and suppliers of new bicycles to bike shops.  This reflects the next step into the bike shop channel of distribution from Imports to the wholesalers selling bicycles to bike shops.  You will notice that new unit sales are down just over 10 percent and wholesale dollars are down 6 percent – while the average wholesale value of a new bicycle sold to a U.S. bike shop has increased just over 5 percent through September YTD 2013.

U.S. Suppliers New Bicycle Sales to Bike Shops 9-Months YTD 2013 vs. 2012

                          September           Total Units             Total Wholesale              Average Unit

                          YTD                            Units                     Value US$                 Value US$

                          2013                     1,887,686               $837,299,199                    $ 443.56

                          2012                     2,110,799               $887,328,578                    $ 420.38

                          Variance                 -223,113                -$50,029,379                    $  23.18

                          Variance %                -10.6%                          -5.6%                         5.5%

Source: Leisure Trends Group, BPSA Top Line Data, GTG Analysis

There is no question that brand and suppliers sales of new bicycles to bike shops will be down in 2013 from the previous year, continuing a trend of a flat to down market consumption of new bicycles for the bike shop channel of trade.  This no growth scenario has continued for the better part of the last fourteen years – since 2000.

We will also remind you that, according to the National Bicycle Dealers Association (NBDA) and our own analysis - the typical American bike shop has not made a profit on the sale of new bicycles for about two decades! 

This leads to a vitally important question about the future….What if bike shops across America are going to have to change the way they do business to accommodate changing consumers with new and different purchasing behavior and buying habits?

What if bike shops are going to have to start attracting consumers and shoppers that normally wouldn't think of coming in to a bike shop – or face the reality of watching the steady decline of their businesses?

The Sweet Spot is actually demographic and sales and marketing terminology for the “best customers” of a channel of trade.  We submit that the Sweet Spot for New bicycles isn't big enough, and individual bike shops have to take action to increase the size of their local Sweet Spots in-order to break out of the “no-growth” and “little or no” profit cycle (please forgive the term) they have been trapped in for almost two decades!  The good news…the great news is bike shops can be successful it making this happen!

Adult American Bicyclist Ownership of New and Used Bicycles

2012 Compared to 2013

                                                           2012                2013

                          Adult Bicycle Owners                                       25,352,000       28,544,000

                          % New Bicycles

                              Total Respondents                                                  90%                 80%

                                                                                                22,817,000       22,890,000

                         % Used Bicycles

                              Total Respondents                                                  36%                 26%

                                                                                                  9,127,000        7,550,000

Source: American Bicyclist Study 2012, 2013

The above table shows a comparison of Adult Bicycle Ownership in 2013 compared to the previous year.  New bicycle ownership is the second line, after total adult bicycle ownership for 2012 and 2013.  In 2012 90% of bicycles reported they owned a new bicycle, and this dropped to 80% in 2013, but because the total number of adults reporting they owned a bicycle, the actual number increased slightly.

We heard a quote from Adam Micklin, vice president sales for HP (Hays) that emphasizes the impact that Used Bicycles have recently had on the American bicycle market and the bike shop channel of trade: “Used bicycles are the Middle Classes’ New bicycles.”

In 2012 36% of adult bicycle owners reported owning a used bicycle, and this dropped to 26% in 2013 as did the actual number of adult owners of a used bicycle.

Because some adult bicyclists own both a new and a used bicycle the duplication was 26% in 2012, but this dropped to 6% of adults reporting they own both a new and a used bicycle in 2013. 

The Middle Class is disappearing…under pressure from the economy, with the end result - for the New and Used American Bicycle Market – that Americans acquired fewer New and Used Bicycles in the past year!

Now, let’s take one step further in to the American bicycle market…going from bicycle ownership to bicycle riding participation.  Overall the National Sporting Goods Association (NSGA) reports 170,000 more Americans 7 years of age and older rode a bicycle 6 days or more in 2012 compared to 2011, a total increase of 0.4%...that looks like this! 

American Bicycle Riding Participants 7 Years of Age and Older

1995 to 2012

                                Year                                                                           Participants
                                1995                                                                           56,308,000
                                1996                                                                           53,342,000
                                1997                                                                           45,119,000
                                1998                                                                           43,535,000
                                1999                                                                           42,406,000
                                2000                                                                           43,135,000
                                2001                                                                           39,004,000
                                2002                                                                           41,387,000
                                2003                                                                           36,257,000
                                2004                                                                           40,317,000
                                2005                                                                           43,138,000
                                2006                                                                           35,621,000
                                2007                                                                           37,405,000
                                2008                                                                           44,707,000
                                2009                                                                           38,139,000
                                2010                                                                           39,790,000
                                2011                                                                           39,148,000
                                2012                                                                           39,319,000
Source: National Sporting Goods Association, Series I Sports Participation Studies

Keep in mind that the above chart represents the U.S. bicycle market...because bicycle riding participation doesn't care if the bicycle is new or used, and it includes 20" wheel and larger bicycles.

The total U.S. bicycle market – including all channels of trade - has obviously been flat, with no appreciable growth for the last six to seven years – as the U.S. population has grown…and changed!

The small 0.4% increase and flat market…masks some very big changes, which we have covered in detail in other White Papers and Webinars - as the demographic changes in America that became apparent with the 2010 Census and 2012 election have finally caught up with the bicycle market and business – representing another set of factors effecting the bicycle market and the bike shop channel of trade.

As we said, your best customers are known demographically as The Sweet Spot!  Today the Sweet Spot for new bicycle sales is between ages 31 and 36, and for used bicycles the Sweet Spot is ages 30 to 35. .

Brands, suppliers and retailers need to look at their available consumer purchase data to find the Sweet Spot for their products! 

Remember this quote…”After you determine the product or service you have to sell, you’d better find out who buys what you’re selling.  What are the customers?  How do you reach them?  Above all, are there enough of them?  And is their number expanding or shrinking?” from Kenneth W. Gronbach author of The Age Curve: How to Profit from the Coming Demographic Storm.

The Sweet Spot for bicycles sales isn't big enough!  We have covered this demographic reality in the past Baby Boomers will not be replaced one-for-one by Generation X, which is smaller, with 11-percent fewer Americans than the Baby Boom Generation.  Accordingly there are fewer U.S. consumers of everything including bicycles in the Sweet Spot between ages 30 and 36, and this is where the U.S. bicycle business is right now, in 2014!

This is another BIG and important reason you want to take your destiny in your own hands and invite EVERYONE in to your bike shop!  The Generation that is driving the U.S. bicycle business right now – today – is at least 11% smaller than the previous generation that drove the bicycle business ten years ago!  Unless you change the way you do business – you are going to attract, on average, fewer shoppers and customers than you did ten years ago! 

Being inclusive instead of exclusive and inviting EVERYONE in to your bike shop is a change that will set you on the road to growing your business instead of watching it decline and wondering why!  

We believe Diversity and Equity represent the keys to the future of bike shops and bicycling in America.

This is also a picture of the League of American Bicyclists Equity Advisory Group that just had its second gathering in Washington DC the first full week of November 2013 and which you can read about in the LAB newsletter and on the website.  These are all avid bicyclists who are dedicated to Diversity and Equity in bicycling in America, and their activities and those of the League of American Bicyclists should be followed closely for the leadership they will show and bring to bike shops in this most important initiative to bring the bicycle business and bike shops up to speed with the reality of ethnic and gender demographics in neighborhoods and communities – in other-words the bicycle markets of America – and take advantage of the growth opportunities presented!

The perception too many American consumers have of bike shops is…they are exclusive “Old-Boys” clubs that exclude everyone else!  The “Old-Boys” are primarily white, Baby Boomer males but in some bike shops they are multi-generational white males and in any case, if being an exclusive club that excludes Women – the new majority in America, and the ethnic diversity of your community is working for your business, so be it.  However, for the majority of bike shop owners who are wondering why business and store traffic have slowed down…we have probably just found the biggest reason!  The demographics of your community have changed, but you haven’t changed with them! 

The basics include inviting everyone into your bike shop to be greeted with a smile, a cheerful “Hello”…so you quickly change the perception of your store brand as an exclusive club – and further enhance your store brand as a friendly, welcoming place that consumers will want to stop in and visit – to learn what’s new and interesting in terms of the bicycling lifestyle in the local community! 

Hold open houses and in-store events and use social media and word of mouth to spread the word that your bike shop welcomes everyone in your community to stop in and visit and learn about bicycles and bicycling!  Eventually redo your displays and the interior of your store to be less intimidating and more-friendly.

The MarketWatch Bulletin from December 18, 2013 announced the Federal Reserve forecasts faster U.S. economic growth in 2014. 

While good news for the country, we submit that it will make little or know difference to the flat to no growth trend in the U.S. bicycle industry – unless something changes radically – and it is up to individual bike shops to reach out to their communities and become more inclusive and less exclusive and take advantage of demographic and economic opportunities that will foster real growth!

At the risk of being repetitious, women are the new majority in America, and while women already have a substantial impact on the U.S. bicycle market, they are a long way from being recognized for the true economic power and growth potential they represent and being invited by the American bicycle business to really participate in the bicycle movement in this country…and grow the bicycle market!

You can change this in your bike shop and your community by staffing, by making your store a friendly place to shop, by merchandise selection and a product portfolio that meets the bicycling wants and needs of the women in your community…and by changing your bike shops culture to include bicycling as a women’s and family activity and not just a sport!

The bike shop channel of trade made a conscious decision in the early 2000’s to not deal with the Endemic Prejudice that excluded everyone who wasn't a fit athletic bicyclist and the industry moved toward making bicycling a sport and away from bicycling as an activity.

Here is a recent quote from a blog posting on the subject of the flat to declining U.S. bicycle market:

“Shops bear some of the responsibility. I hear story after story from our clients about the poor treatment they received from not just one but multiple shops that they've had dealings with. The ‘core’ shop mentality, the arrogant side of ‘cycling culture,’ that treats the newbie customer like they don't rate because they aren't ‘real’ riders. Add name brand bike sticker shock to the equation and before you know it your local bike shop has created another Walmart customer.”

This is a situation and factor related to the American bicycle market and business that bike shop owners can correct quickly and at low or no cost! 

Today’s bicycle market comprises a myriad of lifestyles, family and household composition, ethnic backgrounds and economic standing, all varying by community  – making it difficult to influence who buys what…and in this retail landscape to identify your bike shops “ideal target consumer!”  

Changing consumer attitudes have added to the difficulty, and the fallout of the great recession has been a pause and shift in lifestyles that for some has resulted in cutting back and budgeting and for others a change in the way we live. 

In 2011 John Gerzema and Michael D’Antonio published Spend Shift chronicling the historic shifts in consumer behavior following the 2008 financial crisis.  Their research highlighted a new American consumer who has become infinitely more mindful and considered in purchasing behavior…and who has anchored their brand choices – including retail store brand choices - to very different values than in the past. 

The traditional brand attributes of convenience, selection and price have begun to give way to new and deeper qualities like – kindness, empathy and lasting quality.  Consumers, the research found, wanted to return to a time when they could actually like the places they shopped and feel good about spending their money there! 

Showrooming, mobile technology and the Internet, are here to stay…but before tackling the opportunities of technology, bike shops need to concentrate on mastering the basics, including how to Craft Individual Bicycling Life Style Solutions, utilizing tools like mass customization and bundling to survive!   

Bike shop owners seem to be caught up these days in beating the so called Techno-Economic Cycle including supporting MAP and MSRP and in the process are missing the biggest opportunities to stabilize and actually grow their businesses – mastering the basics of retailing and customer service and differentiating the value of their retail businesses to today’s consumer through individual products…and actually making a real profit!

Crafting Individual Bicycling Life Style Solutions and individual products – means being consumer centric, or focused on the consumer instead of being product-centric!  Crafting Life Style Solutions is all about really listening to shoppers and suggesting the products that will deliver the bicycling experience they anticipate through their description in responding to questions – not just selling products, but providing a window into an individuals bicycling life style experience!

Mastering the basics – means providing an outstanding individual shopping experience to every shopper that visits your retail enterprise,

The foundation for your bike shop providing Individual Bicycling Lifestyle Solutions is Shoppers actually liking, and feeling comfortable in your bike shop and feeling good about spending their money with you!

In his book The Retail Revival Doug Stephens talks about the good news as “…an absolute bonanza of opportunity” because consumers have created a new era of retailing – where, according to Stephens, “size and scale of operation is no longer a clear advantage, deep pockets no longer a requisite for awareness.  And brands no longer a guarantor of loyalty.” 

Today the consumer is the one, as Stephens says, “…who if they feel your brand is worthy, has the power to broadcast on your behalf to their network and their possessive networks’ network, and so on.”

The consumer is now the most powerful force in the American consumer market and also the most powerful form of media there is – and is demanding 24-7 access to retailers that will listen to their wants and needs and provide individual lifestyle solutions…not just products, but solutions! 

In Summary:

Weather:  While vitally important, Weather isn't the only factor effecting the American bicycle market and business, and hasn't been since about 2000, the first year of the new millennium.  The Federal Government has made vast improvements in weather forecasting, and the bicycle business, like the clothing industry needs to make much better use of the weather forecasting tools available in planning.  This is a topic that is conspicuously absent, along with others we shall identify, from American bicycle business publications, meetings and conferences.

Demographics:  There are at minimum four vitally important demographic factors that the American bicycle business needs to study, understand and include as key factors in its near-term and long-term operations and planning:

The 11% Factor: Generation X, the current driving factor in the American bicycle market and the Sweet Spot or best customers the business currently has, and will have for the next decade, isn't big enough to replace Baby Boomer bicycle customers one-for-one in the marketplace.  For the next ten years, until Generation Y takes over as the drivers of the American bicycle market, the bicycle industry needs to reach out to larger numbers of Generation X with promotional messages that are invitations to experience the bicycling lifestyle.

Women Are The New Majority:  The American bicycle business made a conscious decision to focus on the sport of bicycling and not the activity around 2000 and in 2006-2007 to also left unchallenged the Endemic Prejudice affecting women, so called minorities and non-bicyclists that has become pervasive throughout the bicycle business.  Women are fast gaining share of American bicycle riding participation, and they also are seeking, creating and carving out their versions of the bicycling lifestyle in the communities they live in.  The American bicycle business needs to move quickly to catch up and learn to play a role, or it will be left behind and may be made irrelevant by the new majority.

Minority-Majorities Are Becoming Drivers:  The American bicycle business made a decision that was perhaps less conscious and more sociological, to become an activity of upper income, college educated, white, male Americans.  Women are quickly closing the gender gap and having an influence on the bicycling lifestyle, but the “sport” of bicycling is dominated by upper income, mostly white American households.  So called minorities are becoming the majorities in urban areas throughout America, and in communities within the boarders of states that have traditionally been “white” in their ethnic make-up.  The American bicycle business needs to get its head around the new American Coalition and the fact that there is no longer one big market, but a multiplicity of neighborhoods and communities with diverse populations driving shop local and buy local movements.  Here again, the American bicycle business needs to move quickly to catch up and learn to play a role, or it may find itself left behind and irrelevant. 

Children and Juveniles Are Dropping Out of Bicycling:  If the current trend continues there will only be an estimated 6 to 7 million Americans 17 years of age or younger participating in bicycling 6 or more days per year in twenty years.  This is an urgent and negative trend that the American bicycle business needs to understand and determine a corrective, or at least a positive course of action within the near-term. 

Perception is Too Close to Reality:  While we don’t have a number, most in the American bicycle business will not argue with the statement that: the general consuming public perceives the bike shop channel of trade as a closed club that is trying to be as exclusive as it can be.  The perception in this case is very close, perhaps too close to reality, and there are American bike shops that would like to be “exclusive” to its customers and simply not have to deal with or serve the “newbie” and people who aren't “real” bike riders.  This bike shop culture is home to the endemic prejudice and does its best to drive off women and anyone that doesn't meet the individual shops image of a “real” bicyclist.  The 11% factor alone makes this a very poor business practice, and the bicycle business needs to wake up to the reality that by being exclusive it has condemned itself to at least ten more years of struggling to make a fair profit – at least in the high-dollar value bike shop channel of trade.  The simple business strategy of becoming inclusive and welcoming everyone to come in and learn about and enjoy the American Bicycling Lifestyle will yield positive results financially and otherwise and build the infrastructure to reach out to women and the rich opportunities presented by America’s multicultural diversity. 

The Importance of Used Bicycles:  Used bicycles have been rising as a significant factor in the American market since about 2007.  By 2008 several research firms reported used bicycles as accounting for 25% to 30% of bicycle ownership.  As we have seen in the second table, used bicycles represented 9.1 million, or 36% of bicycle ownership in 2012 and 7.6 million or 26% of bicycle ownership in 2013.  With this market penetration used bicycles have had a definite impact on the new bicycle portion of the American market and are a definite factor in the problems forecasters and planners are having in looking ahead and ordering closer to the right quantities of imported bicycles – which account for over 98% of American market consumption of new bicycles. 

All of these subjects are important enough to warrant being covered extensively by Bicycle Retailer And Industry News and being agenda topics for the IBD Summit, the Bicycle Leadership Conference and Interbike Seminars. 

The Gluskin Townley Group

www.gluskitownleygroup.com

Elliot Gluskin

Managing Partner

elliot@gluskintownleygroup.com

Jay Townley

Partner

jay@gluskintownleygroup.com

January 9, 2014