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Retailers Are Fighting a Steep Grade to Increase Sales

Retailers Are Fighting a Steep Grade to Increase Sales.

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Retailers Are Fighting a Steep Grade to Increase Sales

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  1. Retailers Are Fighting a Steep Grade to Increase Sales • As measured by wholesale data, 2018 bicycle sales increased 4%, or $37.5 million, to a total of $1.112 billion, based on a 15% increase in the average wholesale price of a bike, to $537; however, total units sold decreased 10%, to 2.07 million. • Without a 78% increase in the wholesale sales of e-bikes, or $54.0 million, the industry’s totals would have been much worse. The average wholesale price of an e-bike was $2,033. • During January/February 2019, wholesale bike sales continued to decline, with dollar sales -6.5% and unit sales -19.6%. Overall inventories were 3.2% less than the end of February 2019, but e-bike inventory increased 29.2%.

  2. Fewer Bicycle Retailers However They’re Counted • Determining the total number of US bike retailers is difficult, even for experts in the industry. The most recent (2016) National Bicycle Dealers Association (NBDA) total was 3,700, which included any retailer whose sales volume was 50% or more. • Since many industry experts estimate a 5% attrition rate per year, the NBDA total has probably decreased to approximately 3,400. • Chris Georger, a longtime industry veteran, has a separate list, which totals more than 7,000, but they are defined as any retailer listed as an authorized dealer of more than 60 brands, which includes service-only operations and nonprofit community bike shops.

  3. The Industry Would Be in Dire Straits without E-Bike Sales • A bike (and e-bike) manufacturer extrapolated the 78% increase in 2018 wholesale sales data as representing more than 10% of total bike sales. He forecasts (which may be to his advantage) e-bikes could soon account for 30% of all sales. • Much like the overall bicycle market, the e-bike market segments are imprecise. According to one industry expert, independent bike dealers (IBDs) and electric bike dealers (EBDs) sell approximately the same number of e-bikes. • Other emerging sectors of the e-bike market are sharing/rental companies and major automakers and motorcycle manufacturers. The upside of bikeshare programs is more people will be riding bikes, which could lead to more retail sales.

  4. Today’s Bicycling Participants • In its 2018 Participation Study, PeopleforBikes reported 32% of Americans, or 98.3 million, 3 years of age and older rode a bike one or more days during the past year (data gathered from a November 2018 survey) while 21% rode six or more days. • Those who ride most often included men, children, with incomes less than $20K, Caucasian Americans, African Americans, people who live in the South and those who live in small towns. • Just 25% of women rode a bike during the past 12 months, compared to 38% of men, although 40% of women rode 1–5 days, and 35% of men. Women are more likely to be concerned about bike-riding safety, especially in urban areas.

  5. Important for Transportation and Recreation • The PeopleforBikes survey also revealed 14% of Americans 3 years of age or older rode a bike for transportation during the past year, and 69% did so occasionally, or 1–24 days, but 9% used a bike exclusively for transportation. • Adults 18–24, with incomes less than $20K and living in urban areas were most likely to ride exclusively for transportation while men, 10–17 years of age, incomes less than $20K, Caucasian Americans and living in small towns rode the most for transportation. • Not surprisingly, many more people rode bikes for recreation, or 91% at least some of the time, and 55% exclusively for recreation. Those who rode the most for recreation were men, children, $100K+ incomes, African Americans and people living in the South.

  6. A Healthy Activity Fraught with Dangers • During 1975, total bicycle fatalities were approximately 1,000, and half occurred in urban and half in rural areas. By 2016, fatalities had decreased to approximately 840, but 71% of those fatalities occurred in urban areas. • The top 5 states for average bicycle fatalities per 10,000 bike computers were all in the South during the 2012–2016 period: Mississippi, 35.6%; Alabama, 31.8%; Arkansas, 27.6%; South Carolina, 26.4%; and Georgia, 23.2%. • Bicycling is a healthy activity and the top 5 states where commuters bicycled to work during 2016 were Oregon, 2.5%; Montana, 1.3%; Colorado, 1.2%; California, 1.1%; and Alaska, Arizona and Idaho, 1.0% each.

  7. Advertising Strategies • Bike retailers can create partnerships among themselves to develop and market bikeshare programs and bike libraries to increase ridership among women and those living in urban areas. • Develop and market a bike mentor program to pair enthusiasts with infrequent riders to encourage them to ride more often than 5 or fewer days per year, especially by showing the infrequent riders the best and safest places to ride. • Partner with larger, local businesses to develop bikeshare and other motivational programs to increase the number of employees who ride a bike to work, emphasizing gasoline savings, health benefits and environmental stewardship.

  8. New Media Strategies • Teen and young adult influencers and/or store ambassadors sharing their bike-riding experiences via social media can help maximize the number of teen riders who continue to ride during college and into later adulthood. • Ask employees and loyal customers to share videos of local bike parks and other safe, fun locations for riding, including daytrips outside the city or town to rural attractions, such as vegetable/fruit picking farms, etc. • Ask a local martial arts school owner and/or a personal safety expert to record short videos with general and specific tips for safe riding. Sponsor these experts to make presentations at senior citizen centers to encourage more adults 55+ to ride as a group activity.

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