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Fred Clements: Sales down? Watch the demographics

Published August 13, 2013
A blog by NBDA executive director Fred Clements

Editor's note: This blog post was written by Fred Clements, Executive Director of the National Bicycle Dealers Association. Clements' previous blogs can be read on bikedealerblog.wordpress.com.

Retail sales at bike shops were down about 5 pecent for the first half of 2013, representing $88 million, according to the Leisure Trends Group. This continues a trend of weak cycling-related sales that started in mid-2012.

Many are blaming the weather. They accurately cite a late-arriving Spring and unseasonable rain and storms in many parts of the country. They note that people don’t ride or buy as often when the weather is bad. They suggest that we all need to be patient when the weather is challenging, that things will even out eventually, and that this has always been so.

But what if it’s more than the weather? What if the very nature of the bike shop customer is changing? If that’s the case, just waiting for nice days is not a solution.

A new consumer study from the Gluskin Townley Group suggests that as a key bike shop customer demographic moves into retirement age (baby boomers ages 49-67), they are riding less, buying less, and visiting bike shops less often. This means trouble for retailers who have relied on boomers buying high-end products and services for many years.

What’s more, as boomers become less active in their advancing years, they are not easily replaced one-for-one by younger people. There are 79 baby boomers and only 68 Gen Xers in the U.S. That means there just aren’t enough Xers to replace their elders anytime soon. Demographically speaking, active lifestyle sports such as cycling may be challenged until the Next Big Thing, Millennials (about 77 million U.S. population), comes of age.

The source of this data is The American Bicyclist Study, conducted by the Gluskin Townley Group. It represents a national panel that is balanced to geographic and demographic norms based on 2010 U.S. Census data. The survey was distributed in February, and 1,500 responses qualified as coming from adult owners of bicycles purchased either new or used in the last 12 months.

The study profiles four bicyclist clusters, Enthusiasts, Moving Ups, Casuals, and Infrequents.

  • Enthusiasts are the biggest demographic for bike shops, and they are riding less. In 2000, the average Enthusiast rode 264 miles in a warm-weather month. In 2012 they rode 231 miles. In 2013, they rode only 133 miles per month, a drop of 42%.
  • Moving Ups rode 89 miles per month in 2000, 74 miles in 2012, and only 31 miles in 2013.
  • Casuals rode 39 miles in 2000, 43 miles in 2012, but only 18 miles in 2013.
  • Infrequents (primarily mass merchant customers) have held steady at 7, 9 and 8 miles per month average.

In terms of spending, the average Enthusiast spent $1,124 for a new bicycle in 2012, and $1,164 in 2013. That’s not bad news, but each of the other customer types spent less for a new bicycle in the last year. Moving Ups spent $548 in 2000, $553 in 2012 and $448 in 2013, an 18% decline.

Visits to bike shops are also declining with important customer groups. Enthusiasts visited shops 9.5 times in 2000, 7.2 times in 2012, and only 5.8 times in 2013.

According to Jay Townley, principal at GTG, “We believe this reflects both the reduced participation and fewer miles ridden on the part of baby boomers, and the reduction in spending by this generation.”

Another key indicator is that in 2012, only 2 percent of Enthusiasts did not visit a bike shop in the previous year. In 2013, that number grew to 11 percent.

What to do about it? If “demographics is destiny,” is there any hope going forward?

According to GTG, “Our preliminary ABS findings strongly suggest that U.S. bike shops focus on marketing and sales strategies to grow their businesses by holding on to as many of their baby boomer customers as possible while reaching out to greater number of Generation X, particularly women and minorities, and attracting as many Generation Y shoppers and customers as possible.”

It’s certainly a better option than waiting for a sunny day, or waiting for the Millennial generation (born after 1980) to grow into adulthood and, presumably, start buying a lot of very cool bikes. It’s also useful to note the increasing ethnic diversity of the Millennial generation, once again reinforcing the wisdom of reaching out beyond the usual suspects. In this case, the usual suspects are getting old.

To learn more about the American Bicyclist Study, contact The Gluskin Townley Group gluskintownleygroup.com or email elliot@gluskintownleygroup.com.

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