Much has been said in the past several months about how the bicycle industry is stagnant. In 2011 there were approximately 11 million bicycles sold in this country (size 20″ wheels and above, spread among all distribution channels), which was virtually the exact same number as…… 1985. Obviously gas prices were a bigger factor in 2008 (13.4m) and by 2010 the recession was easing (13.5m), but the fact that the bicycle industry has stagnated for the past 25+ years has CEOs up at night, or at least it should. To be perfectly honest, I don’t think it does…. Bike companies, by and large, are solely focused on increasing their slice of a stagnant industry as opposed to working on increasing the overall “pie”. Trek might grow and Specialized might falter, but the overall number of bikes sold remains the same, year after year. Even with the “OMG high gas prices!!!!” from the past 4 years, we’ve gone from 12.8m to 13.5m and now back down to 11m bicycles sold per year. There is something drastically, drastically wrong with that, and a large portion of the blame should be placed on the direction that today’s bike companies choose to focus their efforts (and more importantly, marketing dollars). Bicycle companies are spending so much money on professional sports and athletes that there isn’t enough left over to actually, you know, market yourself to ordinary Americans.
Note: Following numbers are pulled squarely out of my butt or based on shaky google searching. No insider knowledge was harmed in the making of this post.
Consider the following: Let’s assume that Richard Burke was correct in his projection of Trek being a “billion dollar company” by now, and that Sky’s cost estimate (£10 million a year) for running a pro-team is reasonably about how much Trek puts into their Radio Shack team. Obviously Sky is the primary sponsor of the team, but Trek has put a fantastic amount of resources into their Tour team(s), including clothing and helmet sponsorships and even fielded two teams recently. Then there’s always the NBCSports advertising, flying employees over to France, magazine advertising about the TdF, etc. So let’s say $16m for their pro Tour team. Then there’s the Under-23 road team and mountain biking teams (plural) as well, so let’s call it an even $20m.
$20 million spent on professional teams and athletes.
That number’s relatively useless without context, and so if Trek is a billion dollar company, that’s 2% of all their gross sales. Right off the top, 2% of every single hybrid, comfort and kids bike, 2% of every helmet or pair of shoes, 2% of every mountain bike, urban bike, etc goes to their professional athletes. The problem is that most large companies spend an average of 5% of gross sales on all of their marketing costs (including department salaries and overhead), or 2.5% when excluding internal costs… So out of 2.5% earmarked for external marketing, 0.5% of that might be spent on non-professional advertising, 1/5th of the total amount.
That number seems pathetically small to me. I mean, there are only so many people in this country who look good in spandex. Fewer still who are willing to give up their primary sport (running, hiking, climbing, kayaking, etc) in order to invest thousands of dollars in a racing-style bicycle and all of the dorky accouterments that go with it (full disclosure, I own one of those multi-thousand-dollar racing bikes along with all the dorky accouterments). And so we have several companies fighting back and forth between themselves while most of the country shrugs and goes back to eating their deep-fried whatever.
What we need is a national “Got Milk” campaign. We need the major players in the bike industry (Trek, Specialized, Giant, Raleigh Diamondback, Pacific, Huffy, Shimano, SRAM, etc) to band together to focus on outreach, not to spandex-clad cyclists breathlessly perusing the latest Road Bike Magazine but to ordinary Americans, those who might have a bicycle covered in dust hanging up in their garage. Remind Americans what it’s like to ride a bike again, to be a kid again, and that cycling is a safe, fun and economic (especially with regards to commuting) activity.
Because otherwise we’re just going to keep selling the same 11-13m bicycles year after year…