A friend of mine, Byron over at BikeHugger.com overheard an interesting line yesterday that he felt needed to be sent out into the world of Twitter regarding the bike industry.
Overheard yesterday: “it’s like 2010 just didn’t happen in the bike industry. Onto 2011 quick.”
Interesting quote that has a lot of significance this year and I will try to explain my thoughts on why it rings true as we head into Interbike this weekend.
Where did the 2010 model year go?
It used to be that Interbike (held in September of every year) was the place to release your new models, components and new releases for the next model year. All of the press and dealers attended to get a taste and ride (through the demo days) the latest and greatest in preparation for the coming year. However, over the past couple of years, there has been a race to release new products to the market even quicker by using the popular race Sea Otter Classic (held in April) as a product launch party a full 4 months earlier than Interbike.
In 2010, this was at an extreme as all the bike and component manufacturers used Sea Otter and the time in between to release the latest in 10 speed components and new frames for 2011. So what happened in 2010 and where did the 2010 model year go?
There are several things that happened in 2009 that drastically effected the 2010 model year.
- The industry took a tank with the economy – High end mountain and road bike purchases are going to suffer with a suffering economy. Especially on the high end, the biking industry is classified in the “pleasure industry” as we do not need several thousand dollar bikes to live. As bike manufacturers feel the heat from the economy, we see buy outs, bankruptcies and less cash to spend on innovating products. The natural side effect is less hitting the show room floor in terms of new and innovative products. As we saw with a lot of companies, there were simple color and component changes across most bike lines. Nothing really new was hitting the floor.
- Over inventory of new bikes and components – Since the economy took a down turn, there was an over inventory of new 2009 (and some 2008) model year bikes and components. To offset the inventory on show room floors, the bike manufacturers dialed back on 2010 productions to make room to move out the older inventory. There wasn’t much change in the 2010 model year because of the reason above, so what we ended up with was a skinny 2010 inventory that looked much like the 2009.
- Inventory ran out completely – To the surprise of many, there was a drastic, sharp increase in retail purchasing in the bike industry (nothing like 2007 but ahead of 2009) and inventory went to zero. There were stories of companies like Specialized and Trek that were completely out of 2010 bikes. At that point, you are faced at a decision…ramp up production of 2010’s or release the 2011’s and start filling the pipeline early to sell more bikes. As you can already see…the 2011 inventory started hitting early to get new bikes on the floor.
- The race to be first to market – All of the situations above forced the hand of many manufacturers to release their new product lines early, and this…in turn…forced other manufacturers that were not in the same position to release their lines earlier to stay competitive.
Now…here we sit with most of 2011 already released before Interbike and some of it already on showroom floors and at your local trailhead. Is this an one time event or is it going to be the way things are from here on out? Time will tell, but I can tell you that it is creating a growing frustration over the “model year” product model in the industry. Many people at the dealer and manufacturer level are now hoping for regular releases independent of a “model year” so that inventory does not get as stale on the showroom floor when a new year is released far before the actual date.
It will be interesting to see how things shake out over time…but 2010 will go down as the shortest model year for the bike industry to date.