Bike Reviews

By Tom Demerly for tomdemerly.com

As a commentator, he was a master. Measured. Well-paced. Gifted with dramatic inflection and a lilting accent that brought credibility to his narration. As a dramatist, he was a rare thespian of the microphone. He paced his voice, volume and inflection to build a crescendo that hammered on the edge of control. And perhaps most importantly, as a person, he humanized and dignified a sport that is rife with indignity and subterfuge.

Paul Sherwen died last week at the age of 62. Far too soon. His untimely passing is gutting to the world of cycling, not just for fans who loved him, but for the complex synergy of broadcasting the Tour de France and all of professional cycling in the English language.

You can read of Sherwen’s impressive professional cycling career in any of the many eulogies published around the world for him over the last 72 hours. But Sherwen rose to greatest prominence as a broadcaster, commentator and even moderator of cycling’s most turbulent era.

Sherwen began broadcasting with Phil Liggett in 1989. That is when he went from great cyclist to mega-star. The combination of Phil Liggett and Paul Sherwen was not just good, it was magical synergy. The sum was greater than the total of its parts. By themselves, Sherwen and Liggett were excellent commentators. Together they became the institution of cycling in the English language.

It would not be an embellishment to suggest the team of Sherwen and Liggett saved cycling.

The damage inflicted by the Armstrong era cast a dark cloud over professional bike racing and the Tour de France. Its creditability as a legitimate sport was shattered in the post-Armstrong era and didn’t recover even after the brash Texan doper and extortionist was forced into exile. The doping scandals and accusations continued. For any informed observer, cycling had a titanic image problem. It was dirty.

Enter Paul Sherwen and Phil Liggett. Commentating next to the thousand-pound doping elephant in the room the duo would chat during slow stages as the group rode together at a pedestrian pace. Cycling coverage had changed from a 45-minute recorded and scripted highlight reel to a rolling commentary of the entire stage. It became an endurance event for live announcers. Try describing anything non-stop for six hours. If your voice holds, you quickly find out you run out of things to say. Not Sherwen.

During the Tour de France, Sherwen and Liggett were served snippets about the areas the riders were passing through from race organizers. They were dry historical facts about castles, bridges, rivers and factories. It was the stuff you slept through in school. But Sherwen would grab this stuff off the feed and, as though you were sitting next to him in a touring sedan on a leisurely drive across rural France, weave a lilting tale from the popcorn-dry feed. When Sherwen talked about the milk production of the cows of Provence region, it sounded quaint and charming and… damn near interesting.

When the action started, Sherwen’s voice moved to his gut. He became more baritone. More Serious. More urgent. His pace picked up just a tick. Tension boiled under his narration. It felt as if the other shoe would drop at any moment, and we all slid to the edge of seats. His colloquialisms were Shakespearean. Who had ever heard what it was like to, “Throw a cat among the pigeons” or, “Reach deep into the suitcase of courage” before Paul Sherwen? Sherwin brought rare dramatic eloquence to a sport of blue collar schoolboys.

Paul Sherwen dignified cycling, amplified the drama, downplayed the scandal.

It is difficult to imagine a post-Sherwen cycling era. At 75 years old, Phil Liggett may decide to pack up his microphone and move on to a well-earned retirement. Something Paul Sherwen never got. Sherwen played the key role to Liggett’s performance, shoring him up when he made the errors in remembering a cyclist’s name that any 75-year old would make. They did so seamlessly, and it only added to the show. But without Sherwen as his muse and protector, Liggett may not want to continue. If that is the case, it is not too much of a stretch to say that when we lost Paul Sherwen, we lost all of cycling. Or at least any semblance of dignity, drama and decency it had left.

Tom Demerly has been a cycling commentator and journalist for over 30 years. He has written for Outside, Velo-News, Inside Triathlon, Triathlon Today, Triathlete, Bicycling, Bicycle Guide, USA Cycling, USA Triathlon and many others.

Is Michigan Bicycle Retail Dying?

November 26, 2018

Bike Reviews, Commentary., Gear Reviews., News, Outdoor Gear Reviews

4 Comments

By Tom Demerly for tomdemerly.com

Two bicycle specialty stores closed in Metro Detroit this year. Three more suddenly changed “ownership” in November on their way to eventual closure.

On the national scale, Advanced Sport Enterprises, parent company to Performance Bicycle and Bike Nashbar, filed Chapter 11 bankruptcy last month.

After decades of failure to adapt, Southeastern Michigan bicycle retail is in a brutal phase of enforced transition. Despite an overall economic boom many bike shops are a bust. Southeastern Michigan bike store closures and hasty ownership spin-offs that precede further closings confirm that.

The questions are; how did this happen; how can it be avoided and what will the industry look like once the rules of business exact their toll?

Like most significant shifts in business there is no singular cause. A conspiracy of factors combines to weigh heavily on traditional bicycle retail. The reality that the industry has ignored these factors for so long manifests itself in this crisis.

Not every bicycle retailer is in crisis though, and some old-skool bike shops not only survive but are capitalizing on the increasing failures of retailers who thought they knew it all but had neither solid financials or enough vision to adapt in the changing retail landscape.

Southeastern Michigan bike shops like Jack’s Bicycle and Fitness, Roll Models in Allen Park, Michigan, Brick Wheels in Traverse City and Wheels in Motion in Ann Arbor are still there, still doing business and quietly surviving and growing as the others collapse around them.

In the renaissance of downtown Detroit, a new generation of bike family businesses has emerged on the shoulders of men like Jon Hughes of Downtown Ferndale and Downtown Detroit bike shops. Hughes also leads the family effort to grow the Lexus Velodrome and launch a new demi-empire in media and cycling in post-recession Detroit. He comes from a dynasty of bicycle business that stretches back three generations to Mike Walden and the formation of the country’s second oldest cycling club, the Wolverines. Even Bob Akers, who runs the decades-old, dingy, crumbling International Bike Shop in Garden City has survived as the shiny newcomers who thought they knew it all have tumbled.

Why do some shops survive while others fail? One factor common in the surviving Michigan bike retailers is they own their own real estate. But the ingredients for success, not just survival, are more complex than just owning your building.

Harvard MBAs don’t start bike shops. Bike shop owners don’t have business degrees. They start bike shops because they love bikes or have no other opportunity. They’re hobbyists. Not businessmen. The barriers to entry are low. Got $100K? You can open a bike shop. You’ll never tell a bike shop owner he doesn’t know business. As far as bicycle retail store owners are concerned, they are experts at retail. The crash of Michigan high-end specialty retailers proves otherwise.

I was this guy. I lost my own store after 17 successful years during the recession. Then, like a scene from a movie where the plot repeats again and again, I went to work for two other retailers around the U.S. who, like me, thought they knew everything and couldn’t be told anything. They’re gone now too. More will follow.

Failure is only failure if you fail to learn. But in bicycle retail, no one listens. The first bike shop I worked for when I was 15 years old went out of business because the owners failed to adapt. The last bike shop I worked for four decades later did exactly the same thing. The owners refused to adapt. In a repetitive pantomime, I tried to convince the owners of the last shop I worked at to move the cash register to facilitate better customer traffic flow. It was a minor change that may have resulted in a minor improvement. I tried for a year. They never moved it. They went out of business months after I finally quit in frustration and left to work in another industry.

I take some small satisfaction in knowing the store that lasted the longest was mine. But business is pass/fail. You can run a successful business for 6,205 days like I did, but if you fail on the 6,206^th day, you are a failure.

The first lesson I learned in losing my own store is you have to own your failure. Mine was my fault. While there were factors including a global recession that contributed to my 17-year-old store failing, I could have moderated them. Others did. I wasn’t smart enough or humble enough at the time. Some people pay college tuition for an education. I paid in bankruptcies and a modern day “Grapes of Wrath” by losing everything. While the second way may be a more durable education, it’s also more painful.

I went on to work for two more bike retail owners who made exactly the same mistakes I did while ignoring the changes that could have saved them. But bike shop owners don’t listen.

The specifics on what is killing some of Michigan’s bicycle retailers is a fascinating case study in the evolution of business that could fill a book. Bike shop owners and bike shops are, in many ways, indicative of the American economic condition. They are the epitome of small business America. As the small, independent bike goes, so goes all of small retail- good and bad. Small restaurants, pet stores, book retail, independent jewelers and all small retail can learn something from the enforced evolution and bizarre non-evolution of bicycle retail.

Small bicycle retail has been quick to scapegoat the big, ugly mega-retailer and the .com as the reason for their bust. That is a lie. In the broad sense, bicycle retailers are killing themselves by failing to adapt and innovate. They do it in hundreds of small ways every day they continue to do the same tired things over and over and over. Even the bicycle retailers who have survived could do better. For most of the survivors a major reason they still exist is they own their own real estate and remain impervious to swings in the volatile southeastern Michigan economy. But even their future is increasingly in doubt as forward-thinking innovators understand new opportunities in the age of Amazon One-Click.

What will happen to Michigan small bicycle retail? One thing is certain: it will continue to change at a rate that outpaces the ability of most shop owners to adapt. That means we’ll see more southeastern Michigan bike shops closing. Unless they learn from someone’s mistakes the cycle of failure in Michigan cycling retail will continue.

Tom Demerly is a 42-year bicycle industry veteran who owned his own business for 17 years. Today he is a defense and aviation analyst for several international publications including TheAviationist.com published in Rome, Italy.

10 Things Retailers Should Learn From the TriSports.com Meltdown.

August 25, 2017

Bike Reviews, Commentary., Gear Reviews., News, Uncategorized

12 Comments

By Tom Demerly for tomdemerly.com

1. Preserve Price.

Tim Brick, owner of Brick Wheels, a successful independent bike retailer in Traverse City, Michigan told me years ago: “Never discount. You will only go out of business slower.”

Price preservation and the perception of what a product is worth has been destroyed by weak-kneed and undercapitalized bike retailers who give discounts too easily.

Sometimes they give discounts in the hopes of attracting more business, but discounted business is bad business, and it only earns the retailer a reputation for being a sucker to customers who drive a hard bargain. And soon they all drive a hard bargain.

Retailers also give discounts just to keep the lights on. Don’t do that. Just close the business, declare bankruptcy and get a job. The entire industry has been dragged down by incestuous and incessant discounting that has destroyed price integrity, brand identity and even alienated customers who don’t want to negotiate.

If there is one malignant cancer that pervades the entire retail bicycle industry, it is rampant discounting. The problem is so bad most retailers who do it are in total denial of it.

Bike industry, take one tip from a guy who has both succeeded and failed for four decades in this business: Stop Discounting.

2. Don’t Play Favorites: No Sponsored Athletes, No Club Discounts.

When retailers play favorites with some highly visible athletes and groups through “sponsorships” and discounts, they alienate the rank n’ file average customer who subsidizes the cool girl and guy by paying full price. They train the consumership that through performance and visibility they earn special pricing.

This sends a clear message: Some people are more special than others and price is flexible.

Most importantly, there is no consistent, empirical business metric in small bicycle retail that quantifies how many full-margin additional sales are added to the bottom line by sponsoring anyone. And if you can’t accurately measure a sales promotion, you shouldn’t do it.

Sponsorships of athletes and clubs sends a message of favoritism and exclusion, rewarding persistence in driving pricing down.

Even if a sports marketing campaign were run correctly, as it is at the brand level (not by retail stores) it is extremely time consuming and expensive to manage. One beverage industry metric stated that for every $1 spent on sponsorship to automotive racing, the company budgeted $10 talking about the sponsorship in paid media. No bike retailer can afford the money or time for that. And if they could, they should start a beer brand and sponsor a NASCAR driver.

The most recognizable engagement ring brand, Tiffany’s, has never given a free or discounted sparkler to a Kardashian in exchange for publicity. Instead, news media reports, “Kardashian’s Tiffany Sparkler Was $25M!”. That preserves the perception of value and makes the brand aspirational.

3. Don’t Have Too Much Inventory.

The worst thing about the bike business is bikes, and bike brands ram inventory down retailers’ throats with a vengeance. Bike shops: less is more. It is better to have money in the bank than bikes on the floor.

Bicycle inventory is like fruit, the second it lands it begins to spoil. Something newer, cooler and better is already under development and months away from release. And with the evolution in media the word about upcoming innovations doesn’t spread fast, it spreads instantly. As soon as something new is announced, what is suddenly old (but current only hours before) is suddenly devalued.

Customers will buy new, relevant bikes sight-unseen if the retailer’s sales process is optimized to facilitate that purchase format. That preserves capital, maintains freshness and keeps prices up. It also provides customers with more options and better integrity in the purchase.

Bike shops with a lot of inventory on the floor, and a lot of invoices on their desk, are compelled to “sell what we’ve got” and that leads to an ugly paradigm of putting customers on the wrong size bike with the wrong equipment rather than ordering the right bike and adding another invoice to the pile.

Consumers should be wary of bike shops with too many bikes on the floor, they’re going to try to ram something they have in stock down your throat just to make an invoice due date instead of getting you the bike you should really have.

4. Do Have Lots of Capital.

Nearly every bicycle retailer is undercapitalized and over leveraged financially. The reason is simple: When you have $500K to invest in something, does opening a bike shop provide the highest return on that investment? No, it doesn’t. You could take that $500K to an Edward Jones office and earn a better return on it the next day with no work than if you did the heavy lifting and ditch-digging of opening, promoting and running a bicycle retail store. As a result, most bike retailers try to start a business with about $50-200K and make a go of it.

If they don’t own their own real estate free and clear, have to pay rent or a mortgage, pay at least one employee payroll (and mandatory withholding taxes and health insurance) then the math doesn’t work.

To make bike retail profitable you have to have deep pockets and a deeper work ethic. You have to love hard work and business, not bikes and bike rides.

In its current iteration, the bicycle retail business model is a rotten investment. But, a new, emerging business model long on service and profit margin and short on inventory and overhead is promising and will be the bike shop of tomorrow.

5. Manage Costs.

This doesn’t mean go cheap. If your biggest overhead item is marketing then you are doing it right. If your customers arrive at your store and consistently say, “I thought this place would be a lot bigger”, you’re doing it right.

If you’re biggest overhead item is inventory, you are already in trouble.

Starting and maintaining a bike shop can be done very cheaply. Never buy new fixtures, so many used fixtures from other retailers that have been closed are available they can be had for pennies on the dollar. Never pay for extraneous and non-paying expenses like alarm systems (they won’t prevent or deter theft anyway) and subscriptions to POS software systems. Those don’t add to the bottom line.

Use low-cost, streamlined, highly adaptive and simple systems to combat the asymmetrical retail war the little bike shop has to fight against the big box e-commerce giants. Think of how the Afghan Guerillas used crude weapons to bring the Soviet Union to its knees, and still give the Americans fits in rural Afghanistan. Be a retail guerilla, a retail Taliban. Keep your costs low, adaptable and maintain a large amount of liquid capital.

6. Invest in Star Employees.

The online retailer you compete against is a faceless enemy. You can defeat him with a friendly face. If you have a star employee whom customers consistently ask for, reward them before anything else. Give them raises before you buy more bikes, pay them first and well and craft a set of “golden handcuffs” that makes it tough for them to go anywhere else. They are your brand, and if you lose them, you will have to rebuild your brand around another star employee. Worse yet, if you lose your star employee to another bicycle retailer across town or if your star opens their own shop, guess what happens, their customers follow them.

For a small bicycle retailer, the star employee is the single most important business tool. Develop them, value them, reward them, retain them.

7. Participate in the Sport.

Instead of sponsoring the local hotshot, be the local hotshot. This doesn’t mean you have to do a nine-hour Ironman (but it helps) it just means you have to be present at events and participate credibly. This is a part of your business. It is work.

Set up the hours of your store so you can train. Close on key race weekends so you can be where the action is, as a part of the action. Ride the nicest bike you sell and show it off everywhere. Be an aspirational figurehead so when people see you on social media and in the store you have become “That Guy who Knows Everything and is Everywhere”.

If you build your hours correctly and manage your staff correctly the time you spend in the sport will directly and measurably bring full-price buyers into your store and keep them offline.

8. Differentiate Yourself.

Build a voice, a brand and an identity. If your identity is so lifeless and generic that people confuse your business with others, you haven’t done that.

Understand that you will not please everyone. Nor is that the goal. If you talk about a donation to a wounded veteran’s charity in social media an anti-war activist may stop shopping with you. Fine. You can’t be everything to everyone.

Build your brand with clear vision and narrow focus. Don’t be generic. Don’t appeal to the masses. Keep your brand message narrow, unique and focused and be true to who you are.

If you are gay, fly the rainbow flag in front of your store and sponsor “Pride Rides”. If you are a veteran, have benefits for veteran’s organizations. If you are an animal rights activist, broadcast your donations to the local animal shelter and host an adoption day at your store. If you are an environmentalist, show your commitment to renewable energy and talk about how bikes preserve the environment.

Have the courage and identity to stand for something, be someone different and special. Brand yourself visibly and distinctly.

9. Be Highly Adaptive.

Small bicycle retail is asymmetrical warfare: A small opponent taking on a much larger, better capitalized foe. Take a page from the teachings of Mao Tse Tung, Ho Chi Minh, Fidel Castro, Che Guevara and Osama Bin Laden’s play book: Never fight fair.

Change your floorplan frequently. Bring in small, low-priced, easily purchased new products first. Seek out niche brands the big-box guys don’t have and use the equalizing power of social media to partner with the brand to promote them.

Build a reputation as a brutal buyer who torments sales reps and sales managers with non-adherence to “program” buying. If the biggest brands’ credit manager loves you but the sales manager hates you, you are doing it right.

Within your brand identity continue to change and adapt. Use every social media platform. Embrace new media. Use video. Never stop changing, evolving and promoting. There are two types of businesses on the retail battlefield: the quick and the dead. Improvise, adapt, overcome.

10. Have An Exit Strategy.

One day, this will all end. What will you have to show for it? Did you squirrel away money in an offshore account? Did you buy real estate? Is your brand developed enough to have some sales value? And, if you begin to fail, and chances are overwhelming that you will, do you have a viable safety net?

It’s a pipe dream to sell a small bicycle retail business. Frankly, they aren’t worth anything. The inventory is usually older than six months, the fixtures are stale, the employees may not come with the deal and rest can be reinvented elsewhere better and cheaper. As a result, you have to have a viable exit strategy.

What is yours? What is your end game? When do you cry “Uncle” and walk away? Know those answers in advance and you can sleep more soundly at night as a bike retailer.

What the Bike Industry Should Learn from Motorcycle, SCUBA and Firearms.

August 23, 2017

Bike Reviews, Commentary., Triathlon Tips, Uncategorized

6 Comments

By Tom Demerly for tomdemerly.com

It’s Saturday at Motor City Powersports in Bloomfield Hills, Michigan. Their large parking lot is blocked off to cars. A half dozen new motorcycle owners negotiate a series of traffic cones and practice skills under the watchful eye of a certified motorcycle instructor who teaches the new riders the skills they need to survive in traffic and to get their Michigan Driver’s License motorcycle endorsement.

It’s Saturday at Motor City SCUBA in Novi, Michigan. Students sit in the dedicated classroom at the SCUBA retailer taking a written test to earn their basic open water diver certification so they can be SCUBA divers. Before they can buy their own regulator or SCUBA tank, before they can rent equipment and before they can go out on a boat to SCUBA dive while on vacation, they must pass this written test and the practical pool examination of underwater skills.

It’s Thursday night at Target Sports in Royal Oak, Michigan. A crowd of people is in a classroom near an indoor shooting range learning basic firearms safety before they are given instruction in practical firearms handling with unloaded weapons. Before any of the people can carry a firearm in public they must past a Concealed Carry License written test and practical firearms safety instruction course.

The motorcycle, SCUBA and shooting sports industries have all taken proactive responsibility for teaching and certifying their customers for competence and safety before they allow them to use their products. Each of these three industries also has some type of state or commercially mandated licensure that tests competence prior to practice and collects revenue to provide for safer end user experiences through advocacy.

Each of these three industries also incurs significant risk to users. Each has proactively managed the user-risk experience. As a result, business in each category is doing well.

And then there is the bike industry. We just sell you a bike and turn you loose. As a result, the road cycling industry is tanking.

The bike industry’s answer to sagging road bike sales has been to introduce more bike categories. That creates more sales and marketing expense within the industry. It also relies heavily on non-paved riding areas to continue to grow when, in fact, gravel roads used for automotive travel are usually destined to be paved when populations and traffic in their region inevitably become large enough. As it is, cyclists are squeezed into a smaller and smaller artificially sustained environment of rails-to-trails and bike path/park settings that cost big money to maintain, require travel to access and, while growing in some regions, aren’t yet reliable enough to sustain the sport and likely never will be without some organized contribution from the bike industry.

Rather than working to sell what we already have and support that end-user experience through responsible instruction, the bike industry just keeps trying to sell a new category every few years. The recent contraction in bicycle sales suggest this approach is not working. But in SCUBA, motorsports and shooting sports, selling what they have through responsible instruction and advocacy has worked.

The bicycle industry has not been proactive in offering even basic cycling instruction to new cyclists buying performance-oriented road and triathlon bikes. Set against the backdrop of a recent influx of brand new cyclists entering the sport mostly as a result of triathlons, the bike industry has done an abysmal job of leveraging rider instruction as a safety benefit and a sales tool.

Motorsports, SCUBA diving and shooting sports have all had success with that marketing script. In fact, in the case of shooting sports, it helped keep that sport alive in the face of a divisive national argument over firearms ownership rights. What if cycling had an industry and user lobby as powerful as the NRA?

The impetus for teaching new cyclists how to use their bike safely has been on cycling clubs and national governing bodies like USA Triathlon and USA Cycling. But in a click-to-own culture it is a big leap to expect a new bike buyer to buy a bike on Saturday and seek out 3^rd party instruction and certification before using their new bike.

In fact, most cyclists and triathlete revel in fact that buying a racing bicycle is one of the few things a person can do that is free from licensure, formal instruction or user certification. Think about this: what if you loved airplanes or high performance race cars and could just show up and buy one then use it that afternoon without instruction or certification? That analogy isn’t a stretch since going from a decrepit hybrid in your first triathlon to a narrow-tire, performance oriented bike in your next one is tantamount to transitioning from a passenger car to a NASCAR.

Here Is What The Bike Industry Could Do:

As an industry, cycling needs to organize. As with SCUBA, shooting sports and the motorsports industry, both the retailer and the brand level, need to shoulder the burden- and opportunity- to sustain the sport and take responsibility for the cyclists’ end user competence and experience.

The bike industry, bike brands and bike shops, needs to start teaching cycling, including bike handling skills, safe routes for cyclists, basic maintenance and other skills that build a safe, sustainable, responsible culture of new cyclists. It is likely this single opportunity, simple in proposal but labor-intensive and significant in execution, is cycling’s greatest hope not just from prosperity and growth, but survival.

How The Superbike Helped Kill Triathlon.

August 22, 2017

Bike Reviews, Commentary., Triathlon Tips

10 Comments

By Tom Demerly for tomdemerly.com

There was a time when triathletes were a blank check to the bicycle retailer: affluent, upwardly mobile and ready to spend without asking for a discount. Selling bikes to triathletes above $3000 was easy. Triathletes accounted for the majority of full-margin, non-discounted bikes sales in the higher price categories.

But the bicycle retail industry’s repetitive bad habits and inability to develop new sales and marketing methods at both the bike brand and dealer level have compromised the once profitable triathlon bike market. As a result, the triathlon bike business has taken a massive hit from the days of, “Triathletes are willing to spend anything to go faster and always pay full price.”

The marketing script used to be: hype a new superbike with teasers and white papers, launch it with “preorders”, sell out of the first production run early and try to fill orders through the early season with the bikes being gone entirely by May or June. Those were also the days when Ironman races sold out in minutes. Buyers were ready to spend, often sight unseen, and ready to enter expensive events a year in advance.

Most of that has changed as the demographic of the sport has evolved to decidedly down-market and entry-level. Now, the “superbike” is a super flop. Circular debates about which bike is “fastest” and cryptic tech-speak with “white paper” slides showing bike drag, speed and yaw angles ignores the reality that the median long distance triathlete averages about 18 MPH on a bike course while the latest “super bike” is wind tunnel testing at speeds often 50% faster than the rank n’ file athlete will ever see in their “A” race.

Triathlon has filled from the bottom. While there are a few impressive age group performances the vast population of triathletes especially at longer distances, have filled the sport in the back 70% of finishing times. It has become an “every(wo)man” sport. And in the case of the fastest 10% of athletes at big races like Ironman, those people are not paying retail for a bike anyway.

It’s the bottom 70% of the sport where any remaining business may exist.

As that population of citizen-athletes entered the sport they were largely ignored by a bicycle industry locked into a repetitive script of developing new bicycles that spiraled upward in price and complexity. The tired script of, “Tested lowest in drag, developed in the wind tunnel” rings hollow on the only remaining full price consumer, the entry-level triathlon consumer. The market has not followed the sport downward in price while it spiraled upward in hype.

“The greatest failing of the bike industry has been to look at bikes in triathlon, not people in triathlon.”

Perhaps the greatest failing of the triathlon bike industry has been to look at bikes in triathlon, not people in triathlon. As a result the industry has failed to address the single largest market opportunity in the sport, an entry price-point bicycle that does double-duty as a road bike and a triathlon bike, a “multisport bike”, in the sub-$2000 price category.

While bike brands have added new sub-category after sub-category of mountain bikes with different wheel sizes, “gravel grinders”, disc brake road bikes, fat bikes, e-bikes, high head tube comfort road bikes and a host of emerging categories they utterly missed the low-hanging fruit of the entry-level triathlete.

Because the industry missed the entry-level demand from triathletes and wound up filling it by bolting aerobars on road bikes, a poorly conceived workaround, they alienated their consumership with the narrative that triathletes are always up-scale big spenders. Now triathlon bike retailers, and bike brands, are stuck with a lot of expensive bikes. But they have no practical, sub-$2000 bikes to sell at full margin that are specifically intended for entry-level triathletes.

The largest single remaining opportunity for bike retailers is the relatively entry- level, full price, non-discount customer: the new triathlete.

New triathletes need their own bike, a “Volksbike” that is inexpensive, comfortable, safe, looks cool and is easy for triathletes to ride. They don’t need another $15,000.00 superbike that takes hours to sell, feeds the “sponsored athlete” discount narrative and eats up three months of rent from the retailer just to gather dust on the sales floor and eventually die a quiet retail death on an anonymous eBay auction or “sponsorship” deal to the local hotshot that the bottom 90% of triathletes never see.

Author Tom Demerly has raced triathlons and worked in the triathlon industry since 1984, completing over 200 races including the Ironman World Triathlon Championships in Kona, Hawaii in 1986 and Ironman events in Canada, New Zealand and the U.S. He has participated in the Discovery Channel Eco-Challenge, The Raid Gauloises, The Marathon des Sables, The Antarctic Marathon and the Jordan Telecom Desert Cup. He raced bicycles as an elite amateur in Belgium for the Nike/VeloNews/Gatorade Cycling Team and is three-time Michigan USA Cycling State Champion. He is a former member of a U.S. Army National Guard Long Range Surveillance Team (LRS) and now works as an aerospace and defense columnist for TheAviationist.com, the world’s foremost defense and aerospace blog published in Rome, Italy.

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Report Indicates Computrainer Going Out of Business.

February 28, 2017

Bike Reviews, Commentary., Gear Reviews., Uncategorized

8 Comments

By Tom Demerly for tomdemerly.com

According to an e-mail sent to sponsored athletes last night and reports on social media, Computrainer, the innovator of the computerized indoor ride simulator, is closing.

Reports indicate an e-mail was sent to sponsored athletes late last night. Phone calls to the company, Racermate, and its sister company, Floscan, were not returned as of this hour. In a phone call with a representative from sister company Floscan, who asked not to be named, early Tuesday, February 28, this reporter was told “I don’t know what is going on over there [at Computrainer].”

A copy of the e-mail received by tomdemerly.com via social media reads:

“It is with a heavy heart that those of us here at RacerMate must tell you that we are closing the doors on CompuTrainer. Technology and competition from larger companies have both eaten into the marketplace. As a small company with the premier indoor trainer in terms of performance and durability, we have found ourselves in a place where we cannot continue. It has been a marvelous 40+ years and we have enjoyed sharing in the victories and friendships we have made along the way.” [signed]

Chuck Wurster, Vice President

RacerMate Inc.

Seattle, WA

Voice mails left at Computrainer’s extension contained the message, “Please don’t be surprised if it takes several days to return your message.”

Computrainer is related to Floscan, a company that provides aviation and maritime fuel flow monitoring equipment.

The Computrainer indoor ride simulator revolutionized bicycle training by projecting performance telemetry on a screen in front of riders while a load generator varied resistance creating a realistic ride simulation indoors. The system also enabled riders to “compete” with each other in a virtual environment and to ride against themselves from previous performances saved on a computer that controlled the Computrainer.

If reports are accurate, contributing factors may include an unusual, non-retail sales model, low profit margins, service intensive products and the introduction of other computer controlled ride-simulation “smart” trainers into the competitive space from companies like Tacx and Wahoo Fitness who have a dealer network and existing distribution at the consumer level from brick and mortar retailers.

While this report remains unconfirmed from Computrainer as of this hour, the inability to receive or return sales and service inquiries throughout the first half of Tuesday, and reports of the e-mail announcement sent to sponsored athletes have surfaced on social media.

The Bike Industry’s Needless Obsession With “New”.

February 23, 2017

Bike Reviews, Commentary.

4 Comments

By Tom Demerly for tomdemerly.com

Disc brake road bikes, new tire sizes, new brake caliper brake placement, new models, new categories, new components.

The cycling industry has a spastic obsession with newness

The belief is that, to keep cycling compelling for consumers there must be a continuous flow of new products, exciting products.

But not necessarily better products.

In an incident today in Stage 1 of the Abu Dhabi Tour top professional rider Owain Doull of Team Sky told reporters his left shoe was sliced clean through by a disc brake rotor in a crash. Doull sustained additional cuts he attributed to the sharp-edged disc brake rotor from the racing bicycle of sprinting sensation Marcel Kittel of the Quick-Stop Floors pro team. The two were involved in a crash near the race finish; a common occurrence in fast, bunch sprints.

Disc brakes on road bikes have been a new feature for three years. The jury is still out if they are better. This latest exhibit does not bode well for the future of disc brakes on road bikes, and it isn’t the first time.

Gregor Brown of Velo-News.com wrote this today following the Abu Dhabi incident:

“It was not the first time a rider has accused disc rotors of inflicting damage. At Paris-Roubaix in 2016, Movistar’s Fran Ventoso claimed that a large cut on his lower leg was caused by a disc rotor used by the Roompot team. That assertion has been disputed, but Ventoso stands behind the story.”

The sales pitch is often something like, “Everything is going to disc brakes!” and “Cars use disc brakes, discs work better in wet weather.” But there is a contrarian argument to be made that disc brakes are a feature without a benefit, or, at least, not a benefit commensurate to their attendant drawbacks.

In a balance sheet format, disc brakes look something like this:

Advantages:

Better wet weather stopping performance than caliper brakes. Greater tire clearance at fork and rear triangle facilitating wider tires on disc equipped bikes. More frequent use of structural thru-axle wheel design for better lateral stiffness. Removal of braking surface from wheel rim allows new rim shape designs.

Drawbacks:

Reliance on disc-brake specific wheels. Difficulty maintaining adjustment of brake calipers relative to wheel brake disc. Slower wheel changes compared to caliper brakes. Difficulty moving wheels from one bike to another due to tight tolerances. Heavier weight. More expensive. Fewer wheel options for disc brakes. New maintenance requirements, especially with hydraulic disk brakes.

So the question for consumers is, do the drawbacks outweigh the benefits? Another attendant question for consumers is, “Was there anything wrong with caliper brakes?”

In fairness, road calipers have had decades to evolve. Brake surfaces, rim profiles, brake calipers, brake levers, brake pad materials and brake cables for caliper brakes have been evolving ever since they were invented in the late 1920’s. That is a century of technological evolution in favor of calipers.

Conversely, disc brakes are new to road bikes compared to calipers, and the technology is not quite ready for prime time. If it were, the incidents with rider injuries, complexity surrounding wheel changes and maintenance wouldn’t exist.

During the past two decades when the bike industry introduced a few ideas that made it to market when they arguably were not mature we saw an increase in service and warranty related inquiries. These included, most notably, bottom brackets following the move to press-fit bottom bracket formats.

And the bike industry has a dismal record of owning its bad judgment unless compelled to do so via litigation, usually in the form of mandated recalls or personal injury lawsuits. Until those things happen the pedal is to the metal on selling new innovations with an often-subordinated regard for technical merit, let alone safety or integrity.

Solution: Do a Better Job of Selling What Already Works.

While the bike industry has done a great job of introducing “new” it has mired itself in an increasing number of sales narratives.

For every new innovation there needs to be a new sales case, new sales materials, new web assets, new sales and distribution channels and new marketing materials. It takes time and resources to develop those assets, and they cost money. It makes sales conversations longer on the floor of the bike shop on Saturday morning. It may not increase sales, but it makes it longer to complete sales. There is simply more to talk about.

An alternative solution exists in other industries where price maintenance, dealer cooperation and better marketing of existing products along with more judicious management of the supply chain has maintained product quality, profit margin and customer satisfaction.

Perhaps the best example of maintaining profit and demand for a static, non-evolving product is the diamond industry. Despite the rising supply of diamonds (there is actually a surplus) and the introduction of nearly indistinguishable synthetic diamonds, prices for diamonds have consistently risen. The diamond industry has created an emotional perception of worth although all other metrics suggest diamond prices should be falling.

The bicycle industry has not mastered any version of this perceived value equation. It is consistently undercutting price and negotiating a seasonal “surplus” of inventory that has conditioned consumers to buy previous model years at discounts. While some bike brands have reduced the emphasis on model years this has resulted in sometimes-stale offerings since the marketing narrative was not supported vigorously enough within the bike industry. They forget to sell. But they remember to invent new shiny things.

When the bike industry begins to focus on the job of selling rather than the novelty of making shiny new things then product quality will improve and profit margins will follow. And, most importantly, consumers will get a better, safer, more valid product instead of just the latest shiny thing.

The Emperor’s New Bike: 5 Reasons “Superbikes” Have Trended.

October 6, 2016

Bike Reviews, Commentary.

8 Comments

It’s become the script for releasing new high end bikes: tease with media “leaks”, stage a rollout with attendant theatrics, segue into “hard science” with slick videos of wind tunnel testing and release a thick “white paper” of empirical engineering speak. Follow-up with ad nauseam debate about which bike is fast-est, light-est, aero-est or best-est in internet forums. Every bike brand in triathlon has done it.

There are two problems: The script is tired and people care less and less.

“Superbike” is an overused term attached to any bike sold with cliché marketing hyperbole. The reception to “superbike” introductions among social media and triathlon forum users has become decidedly lukewarm this “superbike season”.

There are a few reasons why:

You’ve Heard It All Before.

If every new superbike introduction claims to be the fastest, lowest drag, most developed in the wind tunnel and “best-est”, every one of them is wrong except one.

An actual race car aerodynamic engineer, who knows about science, talks about bikes. Again.

The arguments for the designs are circular and never resolved. No one ever wins. They are no more than claims, and the claims all sound so similar they get lost. So people stop listening. It’s great argument, but bad marketing. Consequently for all the hot air that is moved online and in person very few of these bikes are actually sold at full retail.

The Superbike is Increasingly Irrelevant.

Triathletes are getting slower and finisher rates at large events are dropping. Between bizarre weather events at Ironman and other factors people are having a tough time just getting to the finish line, let alone shaving two minutes off their Kona bike split- a race almost no average triathlete does. There are more beginner and middle of the pack athletes now- races are filling from the bottom, not the top. The new generation of superbikes is not relevant to them. They are too expensive, too difficult to maintain and designed for average speeds the bottom 95% of new triathletes never ride at.

The bottom 95% of triathletes have needed new product offerings in the $1500-$2500 range for a decade now, and there have been almost none. That is a missed opportunity for the bike industry.

The Superbike Feeds an Ugly Stereotype.

If you wheel a superbike into a transition area and don’t finish at the top of the podium you run the risk of becoming a harsh parody: the conspicuous consuming triathlete dandy, the girl or guy with more gold cards than gold medals.

Superbikes have become a statement that infers hubris and elitism to some, and that doesn’t always have a positive ring. It isn’t “inclusive” in tenor. The outdated perception that having a Superbike is necessary to be taken seriously has become an economic barrier to entry in triathlon, and new participants are increasingly rejecting it. But bike brands have not latched onto this opportunity.

Triathletes Have a Voice Now, And They’re Using It.

The first superbikes were developed in a user-media vacuum compared to today. Triathlon specific social media was limited to specialty forums. There weren’t as many Facebook groups of triathletes. Social media outlets were more segregated. People couldn’t comment as readily to such a large audience. Bike companies had not wandered into the rough n’ tumble social media landscape to do marketing.

Now bike brands are using social media for marketing. They’ve discovered the medium is harshly critical. That has blunted the older wide-eyed excitement surrounding new bike introductions with cynicism from contributors. It has made superbikes seem “less cool” and somewhat foolhardy.

Most Triathletes Can’t Afford It, Even If They Did Want It.

The Gallup Daily U.S. Economic Confidence Index measures consumer sentiment about the economy. It has trended below negative throughout the summer with one brief foray into the positive that turned south as the election season heated up. Even if people do have discretionary income they have become increasingly cautious about spending it. They may be willing to spend $1500-$2500 on a new bicycle, still a substantial amount for most buyers, but spending above $5000 is unusual in a pre-election year with a divisive political environment. As a result these introductions above $5000 at retail are less relevant than they were in a stronger consumer market.

What’s The Solution?

Glossy triathlon media is locked-step with their paid advertisers. They run splashy press releases within the hour of a new superbike’s release. This year the buying public hasn’t been as enthusiastic. They railed against it on Facebook and other media.

In an unscientific glance at the reception of one of the industry’s biggest superbike introductions this past week the tenor of 100 comments from four different Facebook user feeds showed 91 comments that could be characterized as “predominantly negative” while only 9 were “predominantly positive”.

The opportunity for the bike industry lies in the empty spaces, the categories no other brand is selling to: Entry level multisport bikes in the sub-$3000 price range.

While bike market segments like off-road have been diced up into multiple sub-segments by wheel size and suspension type the multisport athlete is stuck with two polarized choices: road bike or triathlon bike.

A value-priced bike that crosses from road to triathlon categories would add new bike buyers and eliminate perceived barriers to entry in triathlon. It would also create a more logical progression of products for customers to graduate to. It may actually help sell more superbikes.

The bike industry has done a bad job of asking what the rank n’ file triathlon customer actually wants. They never ask bike shop customers and end-user entry level triathletes what they are shopping for. As a result they are disconnected, and so are their product offerings.

When I worked in marketing at a large U.S. based bike brand known for triathlon bikes I never saw them survey consumers directly, in person or even with an online survey of what end-users wanted. They never asked customers what they wanted. They just went back to the wind tunnel year after year to blow smoke over another new $10,000 bike for a marketing video. Until the bike industry has the courage to change this tired script their wind tunnels are just more hot air.

Felt Debuts New Road Bike Platform at 2016 Tour of California.

May 16, 2016

Bike Reviews, Gear Reviews.

3 Comments

By Tom Demerly for tomdemerly.com.

Spy shots obtained at the beginning of the May 15-22, 2016 Amgen Tour of California have revealed a new Felt Bicycles road platform likely slatted for a 2017 season release.

The new frame platform, likely to be designated an entirely new lettered/numbered series, merges a host of design concepts from previous Felt designs such as the Felt “Z” series high head tube road bikes with the traditionally “long and low” Felt “F” series bikes. The result appears to be a road racing bike with a moderate head tube height and several new frame construction and fit features.

This previously unseen Felt Bicycles platform photographed today at the 2016 Amgen Tour of California shows a new head tube configuration, greater differential from top of head tube to top of seat post and different cable routing from previous Felt road bikes. The fork also appears to have a unique carbon fiber lay-up resembling previous TeXtreme materials used by Felt in their FRD (Felt Racing Development) program.

The appearance of the fork crown and head tube suggest a new construction technique that retains a low, racy appearance with a short head tube but moves more material to the fork crown. This design provides additional fit options while improving comfort according to sources.

Cable routing on the new platform also appear different from previous Felt “F”, “AR” and “Z” series road bikes with cable inlets apparently going directly into the head tube of the frame.

There is no release date for the new platform that was seen in a generic paint and decal livery typical of Felt Bicycles’ prototype bikes from previous development programs.

Why Don’t We Earn More Money in the Bike Industry?

May 12, 2016

Bike Reviews, Commentary., Gear Reviews., Outdoor Gear Reviews

8 Comments

By Tom Demerly for tomdemerly.com

Was at the dentist today. $2,297.00.

My dentist is excellent. Truly. Does a fine job, professional and current on modern dental techniques. Great staff. Nice guy too.

As luck would have it my dentist is also a triathlete. While I was at his office I picked up his bike and brought it back to our bike shop to do a tune-up on it. He’s got a nice bike. He should.

I got to thinking: Why can my dentist command $2500 for services, but I will only bill him about $90-150 for his bike tune-up that takes about the same time? And before you argue that your teeth are a serious “health issue” I will suggest that your bike brakes are too when you need to avoid a collision with a car.

Why is the bike industry unable to command prices for service and products commensurate with other industries? Why is a doctor, a dentist, a plumber, an HVAC repairperson or an auto mechanic so much more expensive to hire than a bike fitter, bike salesman or bike mechanic?

Why are similar things so cheap in the bike industry, when they are priced consistently higher in other industries?

Like any single economic question, there is not one singular answer. It is worth inventorying the reasons why the bike industry, benchmarked against other industries, is habitually under-charging- especially for service- despite growth in demand and technology in cycling.

U.S. culture teaches us bicycles are children’s toys. Labor rates for servicing a Jet Ski, motorcycle, snowmobile or an RV are similar to automotive repair rates. But fixing a bike is something we grew up doing in our driveway. Our value calibration of bicycle service starts in our driveway as a kid. Because the bicycle industry as a whole remains largely unsophisticated compared to Apple and Tiffany’s stores, that value calibration of bike retailers remains lower than other consumer experiences.

What can the bike industry do to change the perception that bikes are toys and labor should be cheap or free? There are a few answers, but the most apparent are to provide a more modern and sophisticated presentation of services and an updated visceral customer experience congruent with newer high-end client services and retail.

Let’s go back to my dentist’s office.

Days before my appointment I always receive a text message reminder from his office. They also phone me and leave a message with a reminder.

The dentist’s office has a trained receptionist, a “Concierge”, who coordinates services, attends to questions and generally administers logistical concerns with patients. It is her only job- to facilitate a smooth and pleasant transaction. She also handles the payments. The entire payment process is segregated to a different staff, a different physical location in the building. This helps solidify the payment experience as finite, non-negotiable, consistent and repeatable.

My dentist’s office is clean and modern, beginning with the exterior of the building. The signage and everything that transmits his brand message is attractive. His treatment spaces are spotlessly clean and meticulously arranged, not only for obvious sanitary reasons, but also to transmit the impression that this is serious business.

Bike shops, by comparison, are less formal places where employees dress in shorts and T-shirts and customers “hang out”. You act how you dress, and you charge how you dress too. The vibe in bike shops is decidedly less professional, and consequently, so are the prices.

For these and other reasons my dentist can command $2500 for a service that takes about the same time and experience as rebuilding his Shimano Di2 carbon fiber triathlon bike. He collects more than ten times the revenue I do for a service that is more similar than dissimilar. And remember my analogy about your bike brakes being as important as your cavities when you’re riding toward an intersection at 20 MPH.

And before old timers argue that a more polished, cleaner, professional approach won’t work in bike shops, I will argue that it likely will, since most adult cycling customers are actually new cycling customers whose benchmark of what a customer experience should be is formed in retailers like IKEA, Apple, Victoria’s Secret and Abercrombie– not hanging out with the guys at the local bike shop. In fact, it is likely the only bike consumers that still want a homy, small-town, casual “buddy-buddy” personal feel to bike is the guy behind the counter, not the customer in front of it.

Change channels.

Tiffany’s is a high-end jeweler made famous by the movie “Breakfast at Tiffany’s” and is still famous for a few reasons, one of which is their iconic “Tiffany blue” (trademarked) brand color. Buy any engagement ring of a given size at Tiffany’s and it is roughly ten times the price of an equivalent sized ring from the corner jeweler. It also carries a consistently higher perception of worth and brand identity.

From 2007 to 2015 Tiffany’s revenue grew 60.49% according to Morningstar.com. That is despite the brutal recession in the U.S.

How does Tiffany’s command a price often ten times higher than an apparently comparable product and still increase sales, even during the recession?

There are several reasons my dentist and Tiffany’s can command more revenue for seemingly similar services and products to the adult cycling industry.

Firstly, they ask for it. And dress for it.

Setting price immediately establishes a value calibration. When I lived in the Middle East I noticed this value calibration is often highly nuanced. The Arabs (and Chinese) invented commerce as we know it today. They know, unless you ask, you will never get the price you want.

Tiffany’s has also established uniqueness and differentiation through their fortunate product placement in a popular old movie and in every brand message they send, right down to their packaging and bags. When a person walks through a high-end shopping mall with a Tiffany blue bag in their hand, it not only calibrates our perception of the customer as affluent and discerning, it also spreads the brand message of Tiffany’s. It’s advertising. And it bolsters our impression of the customer.

By comparison most bicycle retailers use customer bags that look like you should empty a cat litter box in them.

Tiffany’s also maintains a quiet, reverent display and sales environment. A salesperson in Tiffany’s is never interrupted by a telephone ringing on the sales floor. Phone calls to the stores are answered off the sales floor. A phone never rings in the shopping spaces.

Change channels.

e-Bay is backwards retail. People list items, often used, sometimes of dubious value, on e-Bay and consumers compete upward for price in the auction format. Think about that: compete upward.

Why do people compete upward for price on e-Bay when normal market forces exert downward pressure on pricing in retail?

Two reasons: Time component and repeatability of transaction quality (different from item quality).

e-Bay auctions end at a specific time, and the expiration of an item’s availability manipulates our perception of its value. e-Bay is also competitive since supply on unique items is finite and limited. When it’s gone, it’s gone. Both of those components exert an opposite competitive effect on pricing.

The quality of the transaction on e-Bay is almost always identical. This is different than the conduct of the seller and the quality of the item being sold/purchased. But it makes a case that the quality of the transaction (separate from the item in the transaction) is a key driver in our perception of price.

If the transaction experience is inconsistent and/or below industry standards it devalues the purchase price. Buy an antique figurine at a local resale shop, pay $10 for it. Buy the exact same figurine on e-Bay, pay $20, $25, $40…. Whatever the final bid is. People negotiate upward in a proven, repeatable transactional template with finite constraints on supply and uniqueness rather than commodity.

How can bike shops leverage these strategies to improve both the customer experience while raising revenues and profits?

The good news is there are tons of opportunities for the bike industry to provide a better experience for its customers. Of course, the reciprocal is that our current standard of customer experience is poor and lagging behind professional offices and forward thinking retail brands like Tiffany’s, Apple and others. Still, this creates a massive “empty space” where bike retailers could be earning more and providing a better experience.

Step One: Recalibrate the Bike Shop Experience.

Why do you stand in line at a cash register when paying for a $5000 bike when you sit in a comfortable chair at an automotive dealership or at Tiffany’s to pay for your car or engagement ring?

Seated checkout in a non-cash/wrap setting is a small but significant step in recalibrating customer’s experience and perception of what it is to shop at a specialty bike retailer.

Having one staff member in each shift designated as the “Concierge” who greets, directs customer traffic and may also administer the customer checkout experience during slow traffic hours is another key experience quality feature that recalibrates customers’ perception of our industry.

There are many, many other opportunities for bicycle retail to improve the customer experience by changing the transaction environment and appearance and also by adding tangible value to adult bike sales and service.

In fact, there are enough for me to fill a book with.

A problem in the bike industry is that few bike retailers and service providers are benchmarking outside our industry for ways to make the experience better in our industry. Until that changes, we’ll keep hanging out with our customers before and after shop rides in cool shorts drinking expensive beer while earning cheap wages.

“Nobody knows the future, you can only create the future.” Jack Ma, founder of Alibaba.com.

—tomdemerly

Insights on the Endurance, Technical and Adventure Lifestyle.

Archive

Bike Reviews

Remembering Cycling Commentator Paul Sherwen.

Is Michigan Bicycle Retail Dying?

10 Things Retailers Should Learn From the TriSports.com Meltdown.

What the Bike Industry Should Learn from Motorcycle, SCUBA and Firearms.

How The Superbike Helped Kill Triathlon.

Report Indicates Computrainer Going Out of Business.

The Bike Industry’s Needless Obsession With “New”.

The Emperor’s New Bike: 5 Reasons “Superbikes” Have Trended.

Felt Debuts New Road Bike Platform at 2016 Tour of California.

Why Don’t We Earn More Money in the Bike Industry?