Bicycle Industry

Time warp | weird world of bicycle product cycles

So long, November. As cycling consumers finalise their Christmas 2011 shopping list of bikes and gadgets, the bicycle industry’s Product Managers have returned from Taichung, Taiwan, after ordering parts for the bikes those same consumers may buy in 2013. Welcome to the weird world of the bicycle industry product cycle.

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Throughout the year, several major industry events are held where suppliers, brands, distributors, retailers and consumers are able to meet – rarely all at the same time – to discuss new model-year (MY) product. Taichung Bike Week, held in late November this year, is the first industry event positioned around the “calendar year plus two” principle. This means product managers (the people responsible for bicycle specification after the R+D boys have delivered final frame design) order parts for MY2013 bicycles at the end of the 2011 calendar year.

Huh? 2013 in 2011? Who’s running this baffling product cycle? As Chris Carlson, senior industrial designer for Trek, stated in this very good video from 2007 (hosted by CAD design software company SolidWorks), it’s those pesky salespeople:

“We operate mostly on sales-driven timelines which means we don’t set when our products are done like many other consumer product companies. When the sales force says we need a product, we work to get the best product to them in that timeline.”

Indeed, the inertia of first-to-market capitalisation potential means the production cycle continues to creep forward. September or October used to be the first in-store month for new MY bicycles, but this has since progressed forward to June in some cases. This usually happens in entry-level and mid-range categories, where saleability is not necessarily dependent on new MY parts – for example, it would be unthinkable for a brand to release a $10,000 MY2013 road bicycle in June 2012 with a MY2012 groupset, when the MY2013 version of that groupset is available a few months later. However, a brand could release a $1,000 MY2013 road bicycle – that may just be a “graphically refreshed” MY2012 version – in June 2012 with MY2011 parts and enjoy terrific sales as a result of perceived “newness” and higher in-store margin.

Steve Fenton and Katerina Rejchrtova, the duo behind Bike Week (and Taiwanese manufacturer Pro-lite), explained to Cycling iQ by email that product cycle progression impacts everyone, even Bike Week itself:

“The product cycle is slightly different in Europe than in the USA, but it is driven by the bicycle producers, not the components producers; they just follow the timeline given by the bike producers. In order to meet the market demand, we plan to move the show two weeks earlier. There will be a press release next week to announce the exact dates based on agreement with other co-ordinators and after consulting a big number of the exhibitors.”

So when do we get to see these marvellous MY2013 creations? Well, depends on who you are:

TAICHUNG BIKE WEEK
When: November 2011
Participants: Bicycle brands, component suppliers, media (access limited)
Target group: Product managers

TAIPEI CYCLE SHOW
When: March 2012
Participants: Bicycle brands, component suppliers, media, distributors, retailers
Target group: Wholesale and retail buyers

BRAND-SPECIFIC LAUNCHES (Trek World, for example)
When: March-August 2012 (depending on brand’s product cycle)
Participants: Media (access may be limited), distributors, retailers, sometimes even consumers
Target group: Wholesale and retail buyers

EUROBIKE
When: September 2012
Participants: Bicycle brands, media, distributors, retailers, consumers
Target group: Retailers, consumers

To demonstrate just how puzzling this all is, the following table [apologies, a graph will come later] shows how products from different model years collide at the same time across all points of the supply chain. November is a confusing time to be a consumer – do you buy a discounted MY2011 bike, the new MY2012 version, or wait 7-8 months for MY2013? Additionally, if an importer (distributor) over-ordered MY2011 bikes, they may be clearing MY2011 bikes whilst selling MY2012 bikes and placing orders for MY2013.

Ultimately, whilst it all seems irrational, numerous consumer groups benefit: early adopters have their cravings sated, MY-agnostic consumers can find bargains, and Excel spreadsheet fiends can run “new frame/old parts”, “old frame/new parts”, “new bike/strip parts” cost:benefit combinations until they realise it’s MY2013 already. Win-win.

NOTES ABOUT THE TABLE
Note 1: this is an “ideal” scenario, where purchase orders have been accurately forecasted and over-supply is minimal or avoided throughout the supply chain.

Note 2: the MY2014 brand development cycle differs depending on business model, but this is an example for a typical Original Equipment Manufacturer.

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