Bike shops try to stay ahead of the competition

In era of online shopping, the focus has shifted to service, specialty markets

By Mike Lewis
mlewis@crossroadsbizjournal.com

Bicycle shops are pedaling against some of the same business winds that buffet other retailers, according to two people in the business.

Like other retailers, those two bike store owners said they’re relying on service as well as some new retail approaches to compete with big box stores and internet resellers.

The competition has been stiff. The National Bicycle Dealers Association recorded a 42 percent drop in the number of bicycle shops from the industry’s peak in 2001 to 2016.

“A lot have closed. It’s staggering,” said Sean Guy, owner of Hub City Cycles of Hagerstown, Md.

Guy and Jamie Boward, owner of Mercury Endurance Cycles of Hagerstown, said they rely on service to help distinguish their businesses from the competition.

Boward added that, for the past three years or so, some manufacturers have adopted minimum advertised pricing, basically setting the lowest price that their resellers can advertise. The result has been that small shops can have prices similar to, and sometimes lower than, their larger competitors, he said.

“It’s at least giving brick and mortar a chance to compete,” Boward said.

‘More product at less margin’

“I’ve been doing it 22 years now, and every year is different. … I’ve become kind of a destination shop, because I’ve been doing it for so long,” Boward said.

His customers some from a swath of the Crossroads region, from Baltimore to Cumberland, Md., as well as Pennsylvania and West Virginia.

“My background was racing. We try to work with a couple of teams,” Boward said.

But racing is a small part of the bicycle business, he added, and a shop can’t rely on that segment of the market.

Mercury Endurance carries six brands, including Specialized.

“We’ve got a lot of options for different people, different types of riding and everything,” he said.

The store also carries a range of accessories.

“The internet doesn’t affect the bike sales as much as (it does) the accessories,” Boward said.

Thanks to the internet, people come to the store better informed about the bicycles and their features. The competition, however, also has sliced into margins.

“Now you’re moving a lot more product at less margin. … (And) the service side of things has become a lot more in-depth,” he said.

Quality bicycles start in the mid-$400 range, he said, and across the nation, most are sold for less than $700. But bikes can get much pricier.

“I’ve sold bikes as expensive as $15,000,” Boward said.

‘Skin in the game’

Guy has owned Hub City Cycles for nearly four years, although the business has been around for about three decades. The shop offers Trek bicycles and other products.

“We’re a family bike shop. … We try to stay focused on service and making the customer experience better,” he said.

Like Boward, Guy said the region is generally good for bicyclists. The city of Hagerstown is supportive, he said, and the number of riding trails in the area draws bicyclists to the region.

“The internet helps and hurts in ways,” he said.

Online sales do compete with bike shops, he said, but online information also makes people curious about products and services. One of those services is making sure the bike is “professionally fit” to its rider, and that’s hard to do online.

Riders can be left to their own devices when they make online purchases, he said. When they get a bike or a fitting from a bike shop, “someone else has some skin in the game.”

There are not a lot of bike commuters in the area, Guy said, but there are a few who make their daily trek on two wheels.

“We’ve also seen an uptick in electric bikes. … You can get there faster and maybe not as sweaty,” he said.