The second bike boom forecast in 2022. In the 12 months ending October 2021, the U.S cycling market grew its revenue by only 3% compared to the prior year, to just over $8.4 billion, according to Retail Tracking data. This single-digit growth is a bit disappointing, but understandable given the 45% growth that occurred between the 12 months ending October 2020 versus 2019.
Without a doubt, the unprecedented growth that occurred in the prior period was a direct result of consumers buying products that allowed for more at-home and around-the-home activities.
It’s clear that products providing social connection, outdoor escape, and physical activity are the real winners during the pandemic. However, now that some of these needs are diminished, should we expect a downturn in cycling sales in the years to come? On the face of it, the answer could be “yes,” but there are numerous reasons why we can reasonably expect a return to solid growth.As we look forward to summer, a number of factors point to a potential surge in cycling sales in the coming year.
First, sales of electric bikes (e-bikes) continue to grow. Now a $741 million category, e-bikes revenue grew 47% in the 12 months ending October 2021, compared to the same period in 2020. The growth of e-bikes should come as little surprise, as these bicycles address the needs of an ageing population, provide easy access to a family-friendly outdoor activity, and address some of the need for commuting in denser population centres.
Secondly, as supply chain issues are addressed, it is expected that the problem of delivering enough product will diminish. The cycling industry has been challenged this year to meet the demands of bicycle dealers, especially for categories like mountain bikes, high-end road bikes, and some transit-fitness bikes. Even now, the situation is beginning to turn around. In fact, inventory data for the specialty bike market indicates that sales-to-stock ratios for many of these critical bike categories are improving.
Finally, some of the policy changes now being considered at the federal level might provide an enticing new reason to consider a bicycle investment. The Infrastructure Investment and recent legislation invests in making streets safer and some of this investment will certainly help mitigate safety concerns of cyclists.
The cycling industry is also poised to benefit from these strong incentives for consumers to buy and ride bikes. However, to stimulate sales, manufacturers and retailers will have to take new marketing and merchandising action to engage consumers. Part of this marketing push should include ensuring consumers understand the benefit available. The real challenge will be in messaging to newer riders and generating traffic to stores.
Improving the merchandising and assortment strategies, for both bicycles and bike commute-friendly products, must also be considered. While it may not be top-of-mind, category improvements for everything from helmets, to bike locks, and even work apparel could result in sales growth or market-share gains for retailers and manufacturers.
Finally, the industry should focus on improving its supply for the right products. I’m not worried about the more general short-term challenges that retail is facing; instead, I wonder how retailers that are now well-equipped to sell and service complex bikes and e-bikes can afford to stock large assortments of expensive bicycles. Shortening delivery times and working as an industry to increase product turn at retail is one answer.