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The Bike 2.0 blog is written by Rick Vosper, a 30-year bike industry veteran who once headed up the marketing department for Specialized. One of his recent blog posts deals with the retail industry, and brings to light some interesting points that many of our readers are more than likely aware of already—smaller brands are gaining market share, niche retailers are on the rise and big brands are slow to meet the needs of growing markets. Vosper writes:
The old Bike 1.0 business model as practiced by Trek, Giant, and Specialized relies on a shrinking market where a relatively few “smart” retailers prosper at the expense of a majority of “dumb” ones.
In this model, the “smart” retailers capture more and more market share until they (and a few dominant brands) effectively control the market. It’s a pretty good theory…until you look at the actual facts.
Read more at blog.rvms.com.
Thanks for the props, guys. The proof of the pudding came in the 2007 NBDA Bicycle Retail Market (most recent version published, until the 2009 was premiered at Interbike last week).
For the first time ever, the category leader was not Trek or Giant or Specialized, but “Other.” Or to put it a little more factually, the smaller brands had more market share collectively than any of the Top 10 brands.
The point about the 1.0 business model is that the sales strategy of the top 3 brands is based on accumulating enough market share that they (and their retailers) can crush or marginalize the competition. But the facts show otherwise. Clearly, it has not happened; nor is it likely to.