CIN Market Data: Bike shop investment priorities
Cycling Industry News regularly shares excerpts from its Market Data report (available to purchase in full here), featuring findings from the independent bike dealer and workshop sector. This time, we look at bike shop investment priorities and glean insights into the way the trade is currently leaning…
The losers
61% of bike shops are investing less in stock levels. Probably not the biggest surprise within these pages, nor is the second biggest loser in this report – investment in new bike ranges (35% bike shops spending less). There are a few natural additions to that – storage of goods and premises expansion are also seeing similarly large numbers of bike shops spending less on them. Belts have been tightening elsewhere too, Epos (24%) café or food services (23%) and bike fitting (24%) all identified as areas bike shops are cutting back on. The picture on those three mentioned is slightly less conclusive, however, with a split in opinion on whether to spend more or less in these areas (see table below).
The winners
Without looking at the stats, could you so easily guess the areas shops are investing more in? We’ll put up our hands and confess we found this considerably harder to predict than where cut backs would fall. The big winner here is the online shop window. Guessable? Perhaps. Here we appear to be seeing the cycling industry continue to adapt to broader retail trends, but with the caveat – the carefully worded question concerns ‘online shop window’ rather than necessarily online ecommerce. That aside, the online retail trend is clear. Numbers from Statista.com show the value that Brits spend online continues to rise, irrespective of Covid (though lockdowns are generally believed to have helped cement the rise further). In January 2016, Brits were spending £854 million online. By November, this was £3.1 billion. Against that backdrop, it’s very little surprise to see bike shops prioritising investment in their online shop window.
Compounding that finding, a similar proportion of bike shops are dedicating spend to marketing and SEO. With hindsight, it would have been interesting to hear where that marketing spend is going – the assumption being our Californian friends Facebook and Google hoovering up UK bike industry cash – maybe one for the next edition of CIN’s Market Data.
Away from the virtual world, where have bike shops been intending to spend cash? Workshop fitting and tooling is a winner here, with nearly half (44%) spending on this area. Distributors and brands will no doubt be interested in that one. Is there ever a bad time to be importing a tool or workshop related brand? If so, it’s not in 2024. As an aside, Madison recently took on distribution duties for GTechniq – a brand that can nicely slot into the genre of workshop services for minded shops and workshops, and the market seems ripe for any other company or brand that can carve out a workshop or service-related niche.
Shops are also spending out on event creation. Sadly there was chance to drill down into more detail there too, but for now we are left to speculate on the exact nature of those events being spent out on – but let’s assume demo days and ride outs as well as in-store gatherings.
The nitty gritty
Clearing debt is a priority for a vast number of bike shops, with 54% spending the same and 28% spending more on reducing them. Sadly and worryingly, shop security is an area identified as requiring more investment (40% of shops will be doing so), with 55% holding firm on the cash they are ploughing into this area. Retail crime has widely been reported to be on the up in the UK, and a glance around many supermarkets sees more innovate security tagging on items – as well as some locks on cabinets for the kind of items that didn’t need them a few years ago. Again, it’s a broader trend that is impacting on the industry but that doesn’t mean it can be neglected.
