Growing the Bicycle Industry: Ideas from Bikes Belong Leaders
April 06, 2005
Four bicycle industry leaders—all of them board members of Bikes Belong—spoke at the Bicycle Leadership Conference in Phoenix, Arizona, February 10, 2005, about strategies to grow the bicycle industry. Comments from: Bill Fry, CEO of Riddell Bell Sports Skip Hess, CEO of Giant Bicycle Steve Flagg, founder and CEO of Quality Bicycle Products Kozo Shimano, CEO of Shimano American Why does the bicycle business need to be a growth industry? What does the bicycle industry need to do to assure continuing growth? Here’s a brief summary of their comments.
Bill Fry, CEO of Riddell Bell Sports
Bill said individuals and businesses in the bike business will benefit if the industry is growing and bicycling participation is growing. Bill noted that the bicycle business has much more going for it than many other industries that have succeeded in growing. He said our assets include cycling's physical and emotional benefits, the large number of advocates for our activity, and federal government support (more than $1.3 billion during the last dozen years). Also, our activity “trends right” with regard to current issues, Bill said. To grow cycling, we need to create places to ride, Bill said, which we are doing through legislative efforts (lobbying for bicycle facility funding in federal transportation bills). We also need to publicize reasons to ride, locally and nationally. We have to get families and kids riding again. Many retailers work actively to develop new customers and cyclists, both enthusiasts and families, Bill said. We know there are great success stories out there where retailers recognize the lifetime value of new customers and work to create them. Bill said we need the industry, suppliers, retailers, and advocates to:
- Share success stories of methods that create new cyclists.
- Share statistics and testimonials about the specific benefits of new bicycling facility projects that have put more people on bicycles more often.
- Be politically active at the local and national levels.
- Attend the National Bike Summit in Washington, D.C., each year. Retailers are our industry’s most effective voice on Capitol Hill, Bill said.
- Join Bikes Belong.
Skip Hess, CEO of Giant Bicycle
Skip talked about long-term trends in the bicycle marketplace. He noted that the percentage of U.S. bicycles sold by independent bicycle retailers has dropped steadily in the last decade from 3.2 million in 1994 to 2.3 million in 2004. That’s a 25 percent decline. Meanwhile both the percentage and number of bicycles sold in the mass market has increased. Road bike sales have increased significantly during the last three years—they have essentially tripled—but they still account for only 15 percent of the overall adult market in the independent bicycle dealer channel. Skip said that demographic trends in the U.S. population reveal opportunities in the bicycle business. During the next 10 years, baby boomers (born between 1946-1960) will become the largest population segment. These people—most of them now in their 40s and 50s—will have the income, interest, and predisposition to ride bikes. The bike business needs to focus on them between now and 2015. Then, the U.S. population will shift dramatically. In the year 2020, teens and people in their 20s and 30s will become the largest groups. And in 2025, the three largest population groups will be 10-14, under 5, and 5-9. The kids bike market will be more important than ever. Skip noted that few kids hang out at bike shops anymore. Best Buy and similar stores have become magnets for kids. We need to answer this question: What can stores that sell bicycles do to attract kids again?
Steve Flagg, Founder and CEO of Quality Bicycle Products
Steve talked about the business philosophy that will help companies in the bicycle business (particularly retailers) grow. He said it’s a challenge to grow your business if you and your staff don’t have a shared sense of purpose that goes beyond making money. Passion for your work is key: thankfully, bicycles—and the bike business—are fun… and most people who work in our business are passionate about it. If profits are your only reason to exist, Steve said, your customer may look elsewhere for excitement and you may have a hard time holding on to talented employees. Ultimately, without passion, you’ll put yourself at financial peril. Your staff needs to aspire to excellence in serving others. As a retailer, you need to become the source of knowledge in your community about federal bike funding, trailbuilding, and bike commuting. Your store should enthusiastically support local riding groups and “wildly support” national bicycle organizations. Steve called on retailers to stretch themselves by joining local nonprofit boards and becoming part of a growing national voice that is taking the message that bikes belong to the U.S. Congress. Retailers can also benefit by:
- Offering expert coaching on athletic performance and nutrition.
- Offering spinning classes.
- Supporting group rides, particularly those that raise money for medical research.
Kozo Shimano, CEO of Shimano American
Kozo talked about the importance of broadening the appeal of bicycling and making the process of buying a bike less intimidating. To make the bike industry a growth industry, he said we must appeal to people who aren’t enthusiasts. Almost every adult has some fond memory of bike riding as a child, Kozo said. But, for some reason, many no longer ride. Shimano’s research shows that these people would want a bicycling experience that is primarily about socializing and hanging out with friends. Adults who no longer ride (but want to) see themselves riding on trails and paths—not where there are cars. Kozo talked about the process of buying a bike and how it needs to change: For most people, a bike is just a bike—it’s not a mountain bike, road bike, comfort bike, or hybrid bike, he said. Many of the people who don’t ride are deathly afraid to walk into a bike shop—they feel like they need to study before walking in. Even after they muster the courage to walk into a shop, they are often intimidated by the knowledge of the shop employee. Kozo said that shop employees tend to look at novices as low-profit customers. Many newcomers are not going to buy a pro bike: in fact, some may barely be able to afford a low-end bike. Most retailers know that these bikes are low-margin bikes, so there’s probably some hesitation to spend a lot of time with these customers, especially since they may need a lot of time to reach a decision. In other words, selling a bike to a ‘novice’ is no fun—for the employee or the customer. Shimano asked the audience to take a moment and try to understand what is going through the mind of a consumer: “I just want to buy a bike. I have no idea what this guy is talking about.” Consumers walking into a store to buy a bike have a vision of what they are going to do with the bike. It’s more than just buying a bike. Shimano offered an analogy to the experience of a non-cyclist in a bike shop—a man visiting the cosmetics area of a department store. “How many of you have gone into a department store, to the cosmetics corner? Have you ever tried to buy cosmetics for yourself or someone else? I’ve done this—and I’ve been treated like an outcast. No saleswomen wanted to talk to me. And even if they did, I would have had no idea what they were talking about. This is exactly how most people feel in a bike shop. That’s why I’m focusing on this question: “How can we change our mindset to be able to reach people who don’t ride bikes?”