Whereas UK and many Continental European IBDs are reporting one of the best year's trading in the last ten years, the situation is not so rosy in America. That's why an increasing number of US IBDs have hired marketing managers, not more mechanics, they aim to micro-brand themselves and vault their marketing-lite competitors. That's one of the conclusions in Jay Townley's Q3 retail analysis for the NBDA, the US dealer org.

US IBDs embrace marketing as means to brand themselves in continued weak bike market

Check out the PDF below for Townley’s full report for the National Bicycle Dealers’ Association. The bit about hiring marketing managers – or buying in outsourced marketing expertise – is at the end of the document. Below there are links to three other Townley-authored reports but for the full list, type ‘Townley’ in the search engine box on the upper left of this site.

According to Townley’s latest report, a projection of the 2003 US bicycle market shows a dip in the range of 7 to 9 percent from 2002. There will likely be an increase in mass merchant market share. US imports are down 6 percent in units and 5 percent in value eight months year-to-date and speciality bicycle retail suppliers down 22 percent in units and 15 percent in dollars through Q3.

US bicycle imports are tracking a total market down approximately 6 percent in consumption, and bicycle dealer channel supply is tracking down approximately 22 percent.

At IBDs, 2002 and older models captured 13 percent of units and 15 percent of retail dollar sales of bicycles, indicating that US dealers "made good use of their bicycle inventory to satisfy current year demand," said Townley.

"It also accounts for a portion of the decline in suppliers shipments to dealers.

The preliminary projection is the mass merchant channel in the US gains 2 to 3 points for 76 to 77 percent share of market and the dealer channel drops 1 to 2 points to 14 to 15 percent share of market. However, the dealer channel will hold or gain in average unit value at retail, while mass merchants will drop in average unit value.

As Townley reported in his last analyis, the number of IBDs in the US is falling rapidly. The number of US IBDs has declined by 334, or 6 percent, through the third-quarter of 2003. According to The Bike Shop List there were a total of 5024 IBD stores at the end of October, down from 5358 in January.

"If we assume this group of 334 store fronts sold between 75 and 100 percent of the national average in

units – they collectively represent a loss of between 150 thousand and 200 thousand units annually," said Townley.

On a month-over-month basis, the number of IBD store fronts declined by 420, or 7.7 percent, from October 2002 to October 2003.

"In addition to the Darwinian implications, and several other strategic questions, this loss of 6 percent of the [IBD] store fronts means that suppliers have fewer store fronts to sell to and through, or put another way, suppliers have to sell more to fewer dealer store fronts to stay even or increase unit volume."

The US bicycle market is showing growing signs of fragmenting into more niches, and the dealer channel has done a much better job of selling recumbents, folding bikes, electric bicycles, low-riders, street-bikes and

high-end road/700c, triathlete andfull suspension mountain bikes – with the probability that a large portion of

these niche product sales not being captured in any current statistical reporting.



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