Innovate, Adapt and Prepare to Fail Forward

bikeevolutionInnovation doesn’t come naturally to human beings, according to Stephen Shapiro, author and keynote presenter at this year’s Bicycle Leadership Conference (BLC).

Referring to the work of Charles Darwin, Shapiro noted that human evolution is not driven by survival of the fittest. Instead, it’s all about adaptability, the ability to change. This has a direct parallel to business survival today.

He noted that Sears was once ten times the size of Wal Mart, but is now a shell of its former self. Pan Am was once the number one airline in the west, but failed. Howard Johnson’s restaurants were once everywhere, but not anymore. Closer to home, Schwinn went from prominence to relative obscurity.

All were once robust companies at the top of their games. They failed to adapt in various ways and for various reasons, relying on solutions that had worked in the past and being sure of their own expertise. “Expertise,” Shapiro noted, “is the enemy of innovation.” Or, in the words of Continue reading

Six Trends for Bicycle Retailers to Watch

mobileimageMobile bike repair, e-bike dealers, and private label bikes are industry trends worth watching, according to Scott Chapin, bicycle industry risk specialist with Marsh & McClennan Agency in Minneapolis.

Chapin has a unique perspective on the market as he focuses on insurance for the bicycle industry, both retail and supply side alike. Marsh & McLennan receives between five and 10 new inquiries per week from cycling-related businesses looking for insurance, many of them start-ups and potential start-ups. This gives him some useful insight on what is trending and what the future may hold for the competitive landscape for our industry.

Some of the trends from Scott’s position on the front lines of the bicycle insurance world:

1) Mobile bike shops. Chapin sees a lot more mobile bike shops starting, many run by people with great experience with independent bicycle dealers as lead mechanics. “Obviously, this can be considered a threat to the retailer Continue reading

Bike League Embraces Bike Shops

supportlocalbsIndependent bike shops are an “essential component of the bicycle infrastructure that makes a community bicycle friendly,” according to a March 9 resolution from the League of American Bicyclists.

The show of support for bike dealers was approved by the League board of directors just prior to the organization’s signature event, the annual National Bike Summit, held last week March 10-13, 2015, in Washington, D.C.

This year’s Summit featured an energetic women’s forum, a multitude of sessions focused on infrastructure and equity, and a lobbying day where attendees visited Congressional offices to make the case for bikes and bike safety.

The resolution notes “the critical importance of independent bicycle dealers in providing access to bicycles, bicycle maintenance, bicycling information, and creating a community of people riding bikes.”

It continues, “Bicycle retailers provide tremendous support Continue reading

Independents Battle Internet Competition and Rising Costs – In Many Industries

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Internet competition, unfair supplier terms, high health care costs, and growing marketing expenses were the top challenges for independent businesses in 2014, according to a new survey released this month.

Results were based on completed questionnaires from 3,057 independent businesses from a number of industries including bicycle retailers, as well as those specializing in toys, books, running, inns, flowers, records, and miscellaneous others. “Independent businesses” are loosely defined as companies that are locally owned and operated.

About half of the respondents were retailers. The rest were a mix of service providers, manufacturers, farmers, banks, restaurants, and wholesalers. The 8th annual survey included 2,954 businesses in the United States, and 103 in Canada, employing a total of 39,682 people. The survey was conducted by the Institute for Local Self Reliance and Advocates for Independent Business, a group partially supported by the National Bicycle Dealers Association.

Revenue – Sales were pretty good in 2014 for most of the businesses, with average revenue growth of 8.1% being reported. As a group, retailer growth was a little less robust at 5.1%. Bike shops Continue reading

The “S”-Word: Dealers Speak Out

cogsBy many measures, Shimano is one of the bicycle industry’s great companies, consistently bringing product innovation and excellence to a willing marketplace.

But from the perspective of many independent bicycle dealers in the U.S., Shimano has become a huge problem, choking the life out of them by supporting distribution that leads to rampant Internet discounting from Europe.

Many say this makes it increasingly difficult for them to carry Shimano products without looking like price-gougers. Distributors face pressures from Shimano’s policies as well as margins are squeezed, with some even developing their own brands to compete. Bike brands also see their products de-valued as original equipment Shimano components sell elsewhere for huge discounts, the same parts on new bicycles being offered at full price.

Many dealers say they are distancing themselves from Shimano, trying hard to support other component makers, and worrying about a future that allows European retailers to sell to American consumers below dealer cost.

In a recent article in Bicycle Retailer and Industry News, Shimano American management claimed it cannot do anything to control European distribution, a part of the world that doesn’t allow MAP or MAP enforcement. Yet, other companies seem to control European distribution effectively.

The NBDA’s new Supplier Scorecard report, in which dealers rate their suppliers on various criteria, shows that Shimano finished above average in most categories except one. The company earned a C minus grade on the Commoditization Index, Continue reading

Support Your Local Bike Shop, Rule 58

therulesimageCasual cyclists sometimes feel intimidated in bike shops because they don’t understand the equipment, the complexity or even the people working there.

They may not know why they are uncomfortable, but they may have a sense that they just don’t fit in somehow, that they are missing something, that everyone knows things that they do not. Did they miss the orientation session? Did they not get the secret decoder ring? What is all this STUFF? What does it all do? What is up with that $8,000 bike? Am I not special and entitled here?

To address this, store employees are often encouraged to clean up, to simplify, and above all not talk down to those who are interested in cycling but don’t know where to start. Ask probing questions, we are advised. Don’t talk tech. Ask questions and wait for the answers. Be supportive. Ask questions.

These fundamentals help a lot, but the fact remains that many experienced cyclists, especially road cyclists, are part of a subculture that they may not even fully understand themselves, and that can befuddle the uninitiated. The subculture has taken many decades to develop, may not always make sense, and takes some time to understand. What may strike the experienced cyclist as common good practice can cause a neophyte to gasp, run for the door, and take up bowling instead.

Help is now available in an irreverent and funny book entitled The Rules, authored by the mysterious and sacred Order of the Cycling Disciple called the Velominati. It describes 95 specific Continue reading

Opportunities Exist for Progressive Bike Shops

????????????????????????????????????????????????????????????????????????????????????????????????While independent bike dealers face many challenges today, there are also clear opportunities for those who pursue them, according to a group of 15 experienced bike shop owners and managers who conducted a SWOT analysis of the bicycle dealer channel in November.

For those unfamiliar with SWOT, it is a planning technique that can be applied to businesses, industries, projects and even people. It is designed to focus discussion to evaluate both internal factors (Strengths and Weaknesses) as well as external factors (Opportunities and Threats). With a SWOT analysis in place, a business can take a clearer look at their overall situation and build an informed strategy going forward.

The dealer SWOT session led to a wide variety of ideas and concepts, some repetition, but surprising consensus on the issues of the day. Ideas flowed with animation and passion as the participants focused on all aspects of bicycle retailing. Here’s the SWOT list Continue reading