Opportunities Exist For Progressive Bike Shops

SWOT Analysis

The following is a blog post written by Fred Clements, the NBDA's executive director, which originally appeared on Bicycle Retailer and Industry News on December 17, 2014. I truly enjoy reading Fred's perspective. I thought this SWOT analysis was fascinating and felt it warranted a direct repost here for our customers to read.

While independent bike dealers face many challenges today, there are also clear opportunities for those who pursue them, according to a group of 15 experienced bike shop owners and managers who sat together in November to conduct a SWOT analysis of the bicycle dealer channel from their perspective.

For those unfamiliar with SWOT, it is a planning technique that can be applied to businesses, industries, projects and even people. It is designed to evaluate both internal factors (Strengths and Weaknesses) as well as external factors (Opportunities and Threats). With a SWOT analysis in place, a business can take a clearer look at their overall situation and build an informed strategy going forward.

The dealer SWOT session led to a wide variety of ideas and concepts, some repetition, but surprising consensus on the issues of the day. Ideas flowed with animation and passion as the participants focused on all aspects of bicycle retailing. Here's the SWOT list they came up with:

Strengths:

(characteristics of the business that give it an advantage relative to others.)

  • Personal contact and relationships ("We are in the relationship business.")
  • Passion for cycling
  • History of doing a good job
  • Hard work and long hours for little return
  • Longevity (the average bike shop has been in business for 30 years)
  • Valuable as infrastructure ("cyclists need local shops near where they ride.")
  • Professionalism
  • Part of the local community
  • Offering immediate gratification (even free shipping is slow versus taking it off the shelf now.)
  • Offering desirable jobs
  • Touch and feel / tactile experience (test rides, trying things on)
  • Advocacy
  • Owner involvement

Weaknesses:

(characteristics that place the business at a disadvantage relative to others.)

  • Poor retailers among us
  • Stubborn owners
  • Channel conflict and competition
  • Undervaluing ourselves
  • High costs to operate the business
  • Inconsistent customer service
  • Burnout
  • Low barriers to entry
  • Low pay and profit
  • Small buying power as individual stores
  • Over-dependence on brands
  • Independence makes unified action difficult
  • Perception that this is a hobby
  • Perception that prices are high
  • In-season new model year transitions devalue current year product
  • Small thinking / unwillingness to adapt / not progressive
  • Shortage of skilled workers

Opportunities:

(elements that the business could exploit to its advantage.)

  • Under-served demographic groups (age, ethnicity, gender)
  • Reaching out specifically to women
  • Urbanization and increase in bike commuting
  • Improved vendor relations
  • Changing peoples' lives in a proactive way
  • Can engage with people physically, in real time
  • Product complexity (an opportunity to teach and add value)
  • To be the hub of the cycling community
  • Personal contact
  • High gas prices and urbanization
  • The wizardry that happens in the service department
  • Marketing on value, not just price
  • Making the store the local hero

Threats:

(elements in the environment that could cause trouble for the business.)

  • Commoditization (the race to the bottom, price is the focus, products not differentiated)
  • Online distribution
  • Weather
  • Price competition
  • The shrinking middle class
  • Global changes
  • Young peoples' devotion to electronics
  • Low barriers to entry
  • Burnout
  • Wholesale pricing available to the public
  • Direct selling by brands to consumers
  • Changing generational mores
  • Abandonment by major brands
  • Climate change
  • Lack of qualified employees
  • Rising costs
  • Anti-bike political culture
  • Distracted driving
  • Lack of safe places to ride
  • Unethical suppliers

While this list is certainly not exhaustive, it does hit on many of the themes and concerns at work as the industry positions itself for the future. While some of the biggest threats are societal, and therefore out of the individual dealer's control, the list does point to many things that can be done at the micro level, within the store, very much within our control.

Seek the opportunities, minimize the threats, and create a future where new cyclists receive the goods and services they deserve rather than being tragically left to fend for themselves, smartphones in hand, uncomfortable on ill-fitting bikes that squeak and rattle, lost, raging in frustration as they try to figure out, once again, how to install the left pedal on a stripped crankarm using a crescent wrench and a hammer. They deserve better. Good bike shops can make it so.

About The Author

Ryan Atkinson

Ryan Atkinson

Ryan is a proven marketing professional who entered the cycling industry in 1994.