By Dave Goeppner
Editor's note: Dave Goeppner is the founder of Cycling Project Solutions and works as a contractor in the bike industry providing short- and long-term project support in finance, sales, marketing and strategy.
Last week the NPD Group announced that 2017 outdoor gear sales decreased by 6 percent from the prior year. The decrease was attributed to the buying habits of millennials who favor "good enough" products versus the higher-end, specialized products preferred by older generations. Is the bike industry prepared for this shift?
Matt Powell, NPD's senior advisor for the sporting goods industry, doesn't think so. He was recently quoted in an Associated Press article saying, "I think the outdoor industry has not responded to this shift in the mindset of consumers."
There are reasons to believe he is right.
The majority of the cycling brands occupying floor space at IBDs are focused on enthusiasts with specialized, premium-priced gear. The reason, of course, is that most of us in the industry are enthusiasts ourselves. We can therefore be biased toward products that get us excited. In the past this often worked as there was a sufficient number of like-minded consumers. That's now changing and, as a result, many cycling brands have become out of alignment with the largest consumer demographic — millennials.
If you are one of the many brands whose bottom line is dependent upon selling to enthusiasts, there are several things you should consider:
- Peak demand: We are all familiar with the concept of peak oil. Perhaps it is time for brands to consider that consumer demand for their premium cycling projects has already reached its peak. As today's enthusiast ages out, they will be replaced by customers who prefer "good enough" products. Is your brand prepared for this change?
- Old habits: The rumor is that they are hard to break. Is your team ready, willing and able to expand your lineup with compelling, value-driven products for millennials?
- Product passion: Your brand was built on the shared product enthusiasm of your team. Can they become equally passionate about "good enough" products?
- Brand awareness: Is your marketing budget still directed primarily at enthusiasts? The default approach by many brands has been to rely on race team sponsorship — the idea being that this is important to enthusiasts. But now brands should question what percentage of millennials share this interest.
My feeling is that it will take an extraordinary effort from premium cycling brands to adapt to this shift toward "good enough" customers. The larger and more successful the brand, the bigger the challenge they face. It will take a tremendous amount of courage to admit that what has worked in the past will not continue to work in the future. Then it will take even more courage to do something about it.
Related article:
The NPD Group Blog: the State of the Outdoor Industry — Jan. 30, 2018
