Diversify! Diversify! Diversify! - BikeBiz

Diversify! Diversify! Diversify!

Heres a worst case scenerio: if youre in a FMD-infected area and you specialise in mid to high end mountain bikes, sales will plummet. Off-road restrictions are going to last right through until the end of spring and, in some areas, will drag on half way through summer. But, for some, theres a silver lining...
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Bike shops have a lot more going for them than outdoor shops. Many independent outdoor retailers will be snuffed out within weeks (many are 80-90 percent down and are laying off staff; even the stronger, city-based multiples are 25 percent down). This is not doom-mongering, its the conclusion of expert outdoor analysts who, over the past few days, have been on the receiving end of suicidal phone calls from desperate owners of camping and outdoor shops.

Some outdoor analysts believe the FMD epidemic will soon cause the closure of more independent outdoor retailers than the last two recessions put together.

The bike trade has a lifeline: minor roads and recreational routes such as the Tissington Trail, the Camel Trail and round reservoir routes many of which are closed right now will be opened long before rural footpaths and bridleways. The pressure for some of the obviously safe routes to open will intensify over the next week to ten days.

The recreational routes considered way too tame for die-hard mountain bikers are fairly boring to walk along but are perfect for newcomers to cycling (er, like walkers). The bike trade has a massive opportunity to reach out to those outdoor users deprived of their fresh air and countryside. Get them on to bikes and direct them to traffic-free trails and the parts of the minor road network still open.

However, most IBDs will stick to what they know and may see sales of pure-play mountain bikes dwindle over the coming weeks. Those IBDs who diversify quickly, ramp up their you CAN get out there marketing efforts, put hybrids in the window and make a go of it, may ride out the storm.

Regions unaffected by FMD may experience unchanged mountain bike sales, but in many other regions, its going to be hell on earth over the next four months.

In even the direst of situations, there will always be those who rise to the challenge, and thrive. Its terrible to say this but many IBDs have the chance to shoe-horn themselves into new markets because of FMD. Many smaller independent outdoor retailers have cancelled most of their forward orders. This leaves a lot of outdoor equipment suppliers with stock on their hands. There are going to be bargains aplenty in the next few months.

Theres never been a better time to buy outdoor kit at rock bottom prices. It wont move very well right now, but once the FMD crisis has abated, and scores of outdoor shops have gone to the wall, bike shops may make a killing. I hate myself for saying all this (Ive been involved with the outdoor trade for a long time and should imagine Ill be lynched at Autumn COLA, the outdoor trade show) but in a dog-eat-dog situation theres always top dogs and dead dogs.

Of course, outdoor shops could steal a march on you and may try to stock up with hybrids and trekking bikes. However, you have the lines of supply mostly tied up so should be able to sit-out any competition.

So, in this worst case scenerio (for the outdoor trade at least), will we see bike shops which have been over-reliant on mountain bikes for perhaps too long, suddenly see the light and stock up with a larger-than-usual percentage of trekking, town and utility bikes?

Will David Hydes trade show next year have a lot more outdoor suppliers (those that have survived the meltdown, that is)?

Will bike shops capitalise on the potential that will slowly be revealed as tame cycle routes start opening up again, but off-road routes stay closed?

Does the bike trade have enough trekking/city bikes to go round?

What will happen to those IBDs in hilly areas which, naturally, specialise in mountain bikes? MTB IBDs in Cumbria, Devon and Dumfries and Galloway where two mile wide culling zones around infected farms will soon come into force must be bricking themselves. Can they successfully diversify into trekking bikes?

Jump and trials bikes will probably do OK, and BMX sales will probably rise, but what about those niche importers/manufacturers who supply sexy MTB kit that may stay on the shelf for a few months?

Will die-hard mountain bikers sit out the nowhere-to-ride crisis, ready to pounce on discounted high-end bikes and bits once the epidemic and summer is over?

Will other banks follow the lead set by Barclays Bank which has offered all its farming customers a three-month "break" during which they will not have to make scheduled repayments on loans, and is being "supportive" of non-farming customers hit by the crisis and will bike shops now be straight on the phone to their bank managers?

Is FMD genuinely a massive opportunity for some parts of the bike trade, or will we experience meltdown too?

Will those suppliers and IBDs who are looking for a reason to go pop now have a humdinger of an excuse? It wasnt our fault we flopped, it was Foot-and-mouth wot did it.

Is this article too alarmist, the situation being nowhere near as bad as portrayed?

To this question the answer is I hope so.

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