In this series we look at what impact Covid-19 has had on the bike business and how many changes will be with us for good, we sat down with Jonathon Nunan from Better Bike Business to get the low down.
Overall, yes it has been. Retailers have been reporting month on month increases of between 80 and 250%; during the March to May periods, directly thanks to the COVID-19 lockdowns and restrictions.
But the COVID sales surge has certainly not been uniform and not without its problems and future issues.
The increased demand has primarily funneled into low-end adult and kids bike sales, and workshop products and services; as well as some flow-on into accessories and soft goods sales.
On the flipside, there will be some usually significant categories and price points left relatively untouched by the COVID uptick. i.e. mid to high end bike and accessories sales. With some exceptions in the already surging e-bike category.
So, bike stores already strong in low end bikes sales and workshop business, will have been best placed to take advantage of the COVID sales surge; especially those carrying good stock levels.
Whilst premium and specialist retailers will have experienced higher than normal traffic on the servicing and accessories fronts, they will have not seen the same increase in bike sales as the large footprint, family oriented retailers.
Finding skilled and capable staff to meet the increased demand; especially in the workshop, will have been highly challenging. Securing skilled and reliable mechanics is tough for bike shops during 'normal' times. Doing so when nearly every bike shop in the country is advertising for mechanics, is nigh impossible. This unfortunately highlights a domestic bike industry that has repeatedly failed to agree upon, or support, an industry wide bicycle mechanics training and accreditation scheme. Despite substantial effort from the likes of Peter Bourke at the Australian Bicycle Industry Association.
Beyond the spiky situation with category sales, the other inconsistency in the lockdown cycling surge is that of geography. Regional areas, tourism destinations, smaller cities and university towns, have suffered from the loss of tourism, business travel, university participation and the reduced economic activity. Bike stores in those locations might be barely breaking even, if not on the precipice.
We are about to enter a critical period that will determine whether 2020 turns out to be indeed, a stellar year for the Australian bike industry, a nil-all draw, or a net loss. Spring is around the corner, and so the usual start line for new bike sales will soon be upon us in late September/early October. With the global bike industry massively stretched and disrupted, it will be a genuine struggle for distributors to have stock of new ranges in time for the start of the Australian season. And with the Autumn surge period, behind us, it's not like there will be stockpiles of previous season models to tie over retailers should there be a gap in supply.
For value proposition and family oriented IBD's, the Christmas lead up period can account for as much as 70-80% of their annual sales. Any sustained disruption in supply during this crucial time, could more than just un-do the gains of the lockdown sales spike; it could put many IBDs back on their heels financially for most of 2021.
That said, it may be the opposite for specialist and high end retailers, as there will likely be a glut of premium bikes and P&A, offered at discounted prices, to potentially prompt a resurgence in sales not experienced during the lockdown. The pin in that prospective balloon though may be the likely depressed state of the economy, the high unemployment, reduced disposable incomes, or at least, a raised disinhibition to splurge on new toys and non-essential items. So many question marks for sure.
What we do know from previous recessionary periods though, is that low end sales remain strong, and that almost counter-intuitively, so do high end sales. What dies a death though, is the aspirational middle market. A segment that typically drives turnover and profitability for the bulk of IBDs in a typically affluent country like Australia. But having not been around for the last truly global pandemic in 1918, it's almost impossible to make bankable predictions for the season to come.