Weather will continue to play an important role in the U.S. bicycle business in 2014, but other issues are driving a continuing soft market, according to a new analysis from the Gluskin Townley Group (GTG).
The report includes seven predictions for 2014 based on research, analysis of demographic trends and, alas, weather reports:
1. Weather will play an important role in 2014. GTG points out, “Mother Nature has her own timetable and sense of humor when it comes to the weather, but global warming and climate change have made weather an important factor impacting the U.S. bicycle business.”
GTG suggests that the industry adapt by taking advantage of increasingly reliable weather forecasts by visiting www.noaa.gov regularly, and making weather a key element in planning for merchandising and the mix of products carried.
“Thanks to the federal government it is a factor that can be planned for with a higher degree of reliability than in the past. It will still cause inconvenience at its best and disaster at its worst … weather is a constant that needs to be understood for what it is and taken into account in both short and long term planning,” the report notes.
2. The American bicycle business will continue to struggle with sales of new bicycle units in 2014. Demographics have a lot to do with this as Generation X begins to play a more important role in the economy, a generation at least 11% smaller than the previous generation that drove the bicycle business. Unless the bicycle business changes the way it does business, GTG suggests, it will attract fewer shoppers and customers.
“For both the supply side and retail channels this is a matter of reaching out and attracting more shoppers for new bicycles, and increasing conversions and close rates,” GTG says. “The bicycle business needs to become more inclusive and less exclusive and invite everyone to shop for a new bicycle so there are more conversions to an actual purchase.”
3. Women will become the new majority in more aspects of the American bicycle market in 2014. The American Bicyclist Study reports that women make up 55 percent of Generation X bicycling consumers. Women represent 51 percent of the U.S. population and were 53 percent of the voters in the 2012 presidential election. They also hold the purse strings and influence or make 80-85 percent of household purchases.
“It’s important for the industry to recognize and act upon the fact that women are fast gaining share of American bicycle riding participation and they are seeking, creating, and carving out their versions, not the mainstream bicycle businesses version, of their bicycling lifestyle in the communities in which they live,” GTG says. “With women becoming the new majority on their terms, the American bicycle business needs to move quickly to catch up and learn to play a role, or it will be left behind and may be made irrelevant.”
4. Minority-majorities emerge as drivers of more local and metro-urban bicycle markets in 2014. Over the last two decades bicycling has become an activity largely of upper income, college educated, white, male Americans, GTG says. The American Bicyclist Study reveals that the profile of adult cyclists living in the top 12 metropolitan cities is significantly non-white. GTG expects this trend to grow.
“The American bicycle business needs to get its head around the new American coalition and the fact that there is no longer one big market, but a multiplicity of neighborhoods and communities with diverse populations driving shop local and buy local movements,” GTG says.
5. Children and juveniles will continue to drop out of bicycling in 2014. Research shows that during the twelve month period from 2011 to 2012, 3 million Americans 17 years of age and younger dropped out of bicycle riding participation. If the current trend continues there will only be an estimated 6 to 7 million Americans 17 years of age or younger participating in bicycling 6 or more days per year in 20 years.
“This is an urgent and negative trend that the American bicycle business needs to understand and determine a corrective, or at least a positive course of action,” GTG suggests.
6. Used bicycles will continue to increase the stress on new bicycle forecasting in 2014. Various research reports show that used bicycles have been rising as a significant factor in the American market since about 2007. By 2008 used bicycles were accounting for 25% to 30% of bicycle ownership, representing 9.1 million, or 36% of bicycle ownership in 2012 and 7.6 million or 26% of bicycle ownership in 2013.
“With this market penetration, used bicycles have had a definite impact on the new bicycle portion of the American market and are a definite factor in the problems forecasters and planners are having in looking ahead and ordering closer to the right quantities of imported bicycles,” GTG notes.
7. Two distinct bicycle businesses emerge in 2014. The report concludes that two distinct markets are emerging in 2014 and beyond, the traditional market with flat to no growth and the “new wave” businesses that have emerged under the radar for several years. They are smaller, embryonic and all about growing locally.
“The established, traditional bicycle business is clearly larger and well established, but is looking back to what was and the way it was. We predict that this larger American bicycle market will continue to struggle in 2014,” GTG says.
The other side of the business is “looking to the future and new and innovative ways of creating individual bicycling lifestyle solutions, and actually growing the size of bicycle market in cities and neighborhoods … on a local basis.
“This emerging new wave business will remain small in 2014, and largely under the radar, but will begin to challenge the traditional, mainstream bike shop channel as cities become the drivers of the new American bicycle business,” GTG concludes.
The entire document can be accessed here:
The Independent Bike Blog 
Good post. GTG has reiterated some stuff we have known for a while in this industry but continue to respond to only slowly.
Weather, frankly, is a wash. Whether you buy into global warming or not, this is a zero sum game, so that’s not what we need to focus on, yet it is the industry’s favorite excuse.
The last point about changing how bicycle retail is done is critical and any shop of any age needs to be transforming itself.
What I find glaringly missing is any point about how suppliers need to respond, in particular, with who they supply. No mass market is going to grow cycling or respond to the demographic changes mentioned in this blog. Only the IBD can do that, and it cannot if it cannot compete. The comprehensive solution is at least 51% up to suppliers, and probably more, vs. retailers.
I’ll take Jay to task on his assertion that forecasting trends in weather should have anything whatsoever to do with production and demand considerations. In the grand scheme of things, that’s a distraction, hardly a rounding error compared to the massive mis-matches we’ve seen lately in supply vs demand.
I’ve owned a shop for 35 years and I still cannot predict or explain why some spectacularly-beautiful days are dead at the cash register while other “lesser” days have us going crazy. Unless you think you’re the next Hari Sheldon (Asimov’s Foundation Trilogy), there are far more-important issues to deal with.
Even if global warming represents a significant long-term change, that long-term is measured over a decade at least. Within that decade will be swings in both directions, above & below the norm, that will wreck havoc on long-term planning. The threats to our existence have nothing to do with 10-year plans (or lack thereof).
Far more worrisome is the idea that all of our efforts towards Safe Routes to Schools is yielding a negative return. Are we tilting at windmills, or not putting enough resources to the task? Or simply doing something wrong?
Let’s focus on distribution issues, the customer experience, and the joys of cycling. Things we can control, and a message we can sell.
great post man