Historically, there has been little data collected centring on the kids’ sector in the cycling market. However, the Bicycle Association is working on market intelligence and is looking for the trade to support and join this initiative. This will benefit retailers as well as brands, helping us understand consumer trends in our market, so we urge all retailers to consider getting involved.
Taking a look at overall bike sales in Q1 (excluding e-bikes), imports to the UK have risen 74 per cent, from 450,000 units in Q1 2017 to 785,000 in Q1 2017. Meanwhile, exports of bicycles are up 64 per cent on volume, with the biggest volume of units going to the Republic of Ireland, Germany, the US and France. As there is little substantial data on the kids’ market, we use an estimate of one-third of the total market, which suggests that there has been an increase from 150,000 units to 262,000 units.
In 2014, Sports Marketing Surveys identified cycling as the third largest sport by participation in the UK, with 18 per cent of adults and 22 per cent of children participating. This means around 1.7 million kids regularly cycle.
What that shows to us, as an industry, is that there is a great opportunity to sell bikes. The advantage of the kids’ market is that the riders grow and therefore need replacement bikes more regularly than adults. As an industry, we need to keep improving the product and making it easier for consumers (kids) to trade into the next size.
A massive percentage of our stores in the southern regions of the UK are reporting that e-bikes and childrens’ bikes are their only growing sectors. They’re seeing sales of the mid- to high-end road bikes falling – some speculate that this is due to a lack of innovation
in the sector in the last couple of years.
Additionally, stores report that their Cycle to Work Schemes seem to have lost their importance, impacting sales of adult bikes.
As a result, many of the stores we work with are investing more floor space and staff training in kids’ bikes. In previous years, they reported a complete lack of Christmas market for kids’ bikes, but that has changed recently with the rise of specialist kids’ brands.
What we are seeing in the kids’ sector is that there is an increase in brand choice for consumers. Originally, all the key adult brands had some ranges of bicycles for children, then the likes of Isla and Frog appeared in the market with lightweight kids’ specific bikes.
Now there are others new entrants including Early Rider, with the adult bike manufacturers adding a specific kids’ range to have a piece of this growing market: Dawes Academy, Hoy, Wiggins, Squish by Dawes.
Online sales are definitely a threat to most IBDs, although it’s slightly different for kids’ bikes. The majority of parents want the reassurance of buying their kids’
bikes in person, with the opportunity to size the bike properly for their child as well as know the bike will be working as they walk out of the shop and the parent will not have to build the bike themselves.
With the rise of cycling in the UK in the past decade, we’ve seen that parents – even if they’re not dedicated cyclists themselves – have realised that all kids’ bikes are not equal! The bikes that are specifically designed for kids have many advantages over something that’s just a scaled-down adult bike, including weight, easy reach components, and the correct length cranks. We spoke to a store recently in a small market town, which has totally stopped selling the cheaper kids bike brands. After initial fears that brands like Frog might have been too costly for their customers, they’ve actually been delighted with their sales volumes. Other stores have said the same: they’re happy for toy shops and supermarkets to sell the cheap brands, while they stick to bikes they can be proud to sell and know will give years of good service.
A challenging market
All new businesses struggle to forecast demand, and we were no exception. Some of the changes to the market have also meant that even long-standing retailers couldn’t confidently predict their sales.
As the designers, manufacturers and wholesalers of these unique bikes, we had a real challenge to hold sufficient stock to support our growing store base. When we opened our factory in Wales two years ago, we went from famine to overstocks and only now are we
close to achieving our ideal stock position. Satisfying overseas demand brings additional challenges, as every market has unique features and trends. Brexit uncertainty is high on our agenda – the unknown changes in import and export legislation make it hard to prepare for. Like any sensible business, we’re contingencies inplace that include worst-case scenarios.
Our big concern for the industry is that with a slowdown in adult bike sales, many IBDs are not growing their profit annually and Companies House data reports that the cycling market is ranked joint sixth worst performing shops, with 42 per cent of stores found to be operating at a loss. Inevitably, some retailers are running out of funds, closing or changing hands. This does make it challenging for us to maintain a good network for consumers to decide where to shop. We can support those stores who are cash-starved and nervous about investing in large stockholding: having a factory in the UK and large warehouse facility allows us to deliver to British stores within 48 hours of an order – and we’ve never insisted on high volume orders or pre-season commitments.
Research and development
Our R&D team is working on several projects to reduce our environmental impact, for example by using more environmentally friendly pedals made from rice husks; also improved materials used in packaging. Currently, we honestly haven’t seen much interest from the UK trade in offering a greener product, but we hope that this will become higher on the agenda in the future (as it is already in some of our European markets: Germany and Scandinavia). Our environment is an important factor in all the decisions we make as a business, from recycled packaging to generating our own electricity. We have also developed the Leapfrog programme to promote trading in second-hand Frogs through local IBDs. This has been a great success as the bikes hold their value really well, often reaching as much as 80 per cent of the original price! Anything to keep old bikes out of landfill.
Equally important to our business is the ongoing research we are conducting into the best geometry, componentry, and materials for our young riders. We are still putting pressure on our component manufacturers to work on child-specific components that make it easier and more fun for kids to ride and improve their skills. Like the rest of the bike trade, they are coming to realise that they need to pay attention to kids’ cycling in order to nurture the riders of the future!