Chain reaction


The way we experience sports has evolved dramatically over the last With the pre-pack administration sale of Evans to Sports Direct, a year of a weakened pound resulting in significantly lower bicycle sales across the UK, one may be led to believe that the UK cycling market is in decline. 

However, The Bicycle Association estimates that cycling related businesses injected c. £5.4 billion into the UK economy this year, and it is estimated that a bike is sold almost every 10 seconds. Year on year growth is thought to be around 5%, and the industry could sustain 100,00 jobs by 2025.

Within the retail market, three clear segments have developed. Firstly, the "New Bike" segment, estimated in 2017 to be around £800 million; then the growing "Parts & Accessories" segment, £750 million, and a smaller "Repair" segment, £100 million.

Who are the winners and losers?
The market is highly fragmented. Mintel estimates there are c.2,500 cycle high street shops in the UK. Independent retailers make up the bulk of this, and Halfords has 26% of the total market. However, the real growth appears to be coming through online channels. Wiggle is now the second largest "New Bike" seller in the UK after Halfords. Although the retailer has struggled to remain in profit, new reports indicate that revenue has grown c. 40% YoY, up to £393 million, with pre-tax profits of £200,000. Most of this growth has come from the industry transition into online sales, and expansion to non-UK markets.

Other retailers have been at the mercy of the current downturn in UK high street performance. Brexit also looks like it may hit cycling retailers hard. Complex import arrangements from EU bike producers, fluctuations in currency (particularly in hedging dollars), and rising costs of producing bicycles look set to drive up costs and push down sales. However, Richard Sault of Salt Dog Cycling said "I think with this tougher market it will drive the evolution of the bike shop… we’ll see variation of online, man in a van, showroom, coffee shop and other models."

What can retailers do?
Female participation in cycling in the UK is particularly low. Currently, of all journeys made by bike only 27% of these are by women. Targeting and engaging women in cycling should be a key aim for the industry.

WiggleCRC had an interesting method of doing this: in 2013 they became the main sponsor of Wiggle High5 Pro Cycling (now disbanded), a women's professional cycling team, with a large amount of communication to their customers and potential customers – and Wiggle's website highlights their continued targeting of women.

However, there is no single retailer that projects an image to women that "cycling is for me", to increase inclusion and engagement in the sport.
Tapping into inclusion and engagement of women in sport has been proven to be effective, for example "This Girl Can" has been credited with encouraging over 1.6 million women to become more active – and of course these athletes need activewear to go along with their new-found passions. Smaller retailers, such as specialist cycling clothing Rapha, can take advantage of this through leveraging themselves as the go to brand for female athletes. These smaller retailers can more easily reconfigure their brand values to try and increase the participation of underrepresented groups in the sport.

Another method is to piggy-back on the health and wellness trends we are currently seeing in the greater retail market. Consumers are now looking for products that make them look, and feel, better. Demonstrating the ability and value of cycling to do this for them will be a key technique for retailers to convince consumers that buying a new bike, or a new jersey, isn't a luxury treat; it is integral to the consumer's wellbeing.

A final thought is of category mix. We are now seeing a divergence from "purist" retailers; a local bike and repair shop, to more "one-stop-shop" units, where a consumer can purchase a plethora of sports equipment, accessories for a multitude of activities, and the nutrition to go along with this. This is a smart method of increasing complementary add on sales.

However, there should be careful consideration not to dilute the brand too much; retaining a core specialism is important in engaging and retaining consumers.

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Sam Rintoul