How’s Business? April 2020
In all our years of writing How’s Business we’ve never asked a follow up question about the same topic for two months in a row.
But the corona virus is rapidly turning into such a major global threat, not just in terms of health, but for business, that we’ve revisited the topic this month. This time we asked our participants, “Have you noticed any change in customer behaviour due to the corona virus and what effect do you think it will have on your business over the coming months?”
Please note that we conducted these interviews on Monday 16th March. Normally 11 days would have make a minimal difference but of course at the speed that the coronavirus has hit, that’s now a long time ago…
Grant Kaplan of Giant Sydney, located in the heart of the city said:
As of up to today it’s been ok. We haven’t been setting the world on fire, but we’re not experiencing any dramatic effects with what’s been going on with this covid 19 thing. Last month was terrible. It was one of the worst months we’ve had. Surprisingly. I’m not to sure why, but it was a very bad month last month.
But this month has picked up – until today and now we’ll see.
January was good. It wasn’t what we wanted but we were aiming quite high, so we didn’t reach that, but we still had a good month, regardless. But it was like the switch got flicked in February and it went absolutely quiet, but it’s picked up for March.
Our workshop has been really busy. It’s normally booked out one week in advance, but today we’ve only had 30% of the people turn up. But it’s pouring with rain and I would venture to say that’s the reason, rather than anything else.
Corona virus effect
We haven’t noticed anything yet. We’re also having some really wet weather so it’s hard to know if it’s the rain or the corona. But there’s less foot traffic in Sydney and that means less people.
I don’t know! I wouldn’t say I’m optimistic about it but you never know how people’s spending habits will go. Particularly if people want to avoid public transport and self-isolate, cycling might be an opportunity for them… I just don’t know.
We’re not feeling the brunt of it commercially at this point of time but it’s imminent.
We know that Giant have a lot of bikes on the water still, so I’m not particularly concerned about stock availability in the immediate future, but we might feel it in three or four months, so I think it will be a lag effect.
Fortunately Giant have said they have a lot of bikes on the water, but you’ve got to have the customers to sell those bikes to. I’m not too sure if we should be panicking that we won’t have bikes, panicking that we won’t have customers, or not panicking at all. I just don’t know.
Right now, it’s hard to say given that it has been raining for the past three days and this covid thing has really ramped up in the past say five days.
Adrian van Loon from Ride Bellerive on the eastern side of the Derwent River in Hobart Tasmania said:
For us, the spend on mountain biking infrastructure in Tassie has bolstered the local bike industry, there’s no doubt. We’ve been seeing massive increases in participation. Families participating for example. The whole family has a bike and they go up to Derby or other places for two or three days’ camping and hit the trails as a family. So it has been a massive growth in family mountain biking.
Merida and Norco are our flagship brands. We do big ebike sales from Norco and Merida and then from Focus and we do Cannondale as well.
Mountain bikes and e-mountain bikes are our top two categories then it will go down to commuter ebikes after that, then recreational stuff. We trickle along with road bikes. A lot of people are jumping off the road onto mountain bikes. Our roads down here have become more and more busy with tourist traffic and more people are feeling less comfortable riding on the road.
We are on the other side of the river from the city centre. Our cycling infrastructure over here for commuters is terrible. You have the big Tasman Bridge in the middle which you can barely… if you have a handlebar that’s 760 mm wide you can’t fit through the bridge. You have to stop and manhandle your bike through some of the gantries in the bridge. It’s quite difficult for a novice cyclist to navigate.
But we’re the only bike shop on this side of the river. It’s definitely growing. There’s a few new subdivisions going up. Last time I looked the population on this side of the river was about 30,000, but that’s spread over a pretty big area and some people would find it quicker to go over the river to the city to buy their bike stuff.
Corona virus effect
We’ve been flying along up until the last couple of days when the corona virus has hit the media in a big way. I think it will take a couple of days for it to sink in for people and then they’ll get back on their bikes and start spending again, I imagine. But we can only be hopeful.
We’ve been very busy up until the past couple of days. Each month this year had been bigger… record months for us. Our workshop has been booked three weeks in advance through summer and that’s with three mechanics on. We don’t have any space in the shop to fit any more mechanics, so we’ve been travelling well.
In the coming months we usually have a bit of a downturn. We have usually a sale at the end of March so we’re gearing up for that. We’ve got a lot of stock on the way and promo about to hit the social media channels so it will be interesting to see how that goes in the next couple of weeks.
Looking further forward to supply issues coming with model year 2021, what happens in six or eight months, perhaps might be telling for our industry.
Joel Anderson from Off The Chain in the city of Dunedin located on the south eastern coast of New Zealand’s South Island said:
It as has been pretty busy. We predominantly do servicing over sales and we’ve been pretty flat out with the nice sunny summer that we’ve had.
We primarily service mountain bikes. We service everything from suspension components through to seat posts. We try to do everything in house.
We get a wee bit of reference work from other shops but primarily we deal direct with consumers.
Corona virus effect
We haven’t noticed much decline from the customer side. We just know of a few customers who are currently overseas who have had big races cancelled and now they’re struggling to get back home. A couple have gone all the way to the USA and only been there for a day before finding that their events have been cancelled. They’ll have to go into 14 day quarantine when they get back home.
I think delays in getting parts for servicing is going to give us a wee bit of hassle. We’ve been told by a few of the reps to expect some delays on some orders that haven’t been shipped. They’re just got containers sitting in China but nothing’s left on boats yet. I think consumables like brake pads, chains and things like that may take a wee bit of a hit.
Wes Samson from West End Cycles located in the western suburbs of the Victorian regional centre of Wangaratta said:
It has been interesting. We had a bit of a pick-up over Christmas. We did marginally better that what we did over the previous couple of years. But then we lost all of that with the bushfires almost straight away.
Being within Wang, we didn’t have to shut our doors or anything like that, but it was smoky enough that people weren’t getting out. And because Bright and that area was basically shut down altogether, people, particularly mountain bike riders weren’t chucking their bikes on their cars and driving up to Bright like they normally do at this time of year.
I’ve been in this shop since 2005 and the shop was here for at least 20 years before I got here.
Our main brands are Malvern Star and Specialized.
Corona virus effect
The very immediate one is that my full time mechanic is on holidays in Europe and when he gets back, I’m going to be without him for an extra couple of weeks (due to the 14 day compulsory self-isolation rule now imposed). That’s going to make life a little bit tricky for me.
As far as rider habits, I guess it really depends on how many restrictions we have put on us as far as groups are concerned.
Bike riders can be fairly solitary people, me included. You just go out for a ride when you feel like it. But if we get limited to groups of 10 people, that might start the whole bunch riding thing winding down.
Fortuitously I have some Wahoo Kickr’s that I ordered extra, a month or two before all of this started to happen. Maybe we’re going to see an uptake in the use of indoor cycling. That might be the only upshot at this stage.
Mark Stout from Mikes Bikes on the main road at Miami on Queensland’s Gold Coast said:
Business is pretty good, pretty steady. We’re about to go into our quiet time, typically just prior to Easter. We get a bit of a lump over Easter then a bit of a lull for road season at least until the Giro and Tour, but who knows what’s going to happen there at the moment… we’ll wait and see.
But we’re always pretty steady. We never aim to set the world on fire. We also never aim to race to the bottom in the price wars or competing. I’d prefer every bike shop to do well and have good staff and create an industry where everybody works together so that the public gravitate to us rather than gravitating to the internet or wherever else.
If they trust their local bike shops, whether it’s us or even somebody close by, it makes the pie bigger, rather than everybody trying to grab a slice of a pie that’s dwindling.
We keep plodding along doing our thing. We’re 41 years old this year. We have eight staff here including four full time mechanics.
We’re very much for our area. We have a school one kilometre to the north, another one kilometre south. We’re 100 metres from the beach and a university three kilometres inland from us. So we’re very much a recreational and family market for the bulk of our sales… lots of beach cruisers, lots of hybrids. There’s a skate park nearby so we go through some BMX’ers as well.
On the performance side we’re very much road and triathlon. I have noticed an uptick in people talking and enquiring about ebikes, so we’ll be starting to stock more on the floor. Traditionally I’ve had a couple on the floor but we’ll be stocking more and adding a demo fleet. Particularly the e-mountain bikes where the 25 kph speed limit isn’t a deterrent. There has been huge growth, I’ve noticed from other people talking about it in their businesses. So that could be an opportunity for us in the future. We’ll dabble in it and see.
Corona virus effect
Nothing as of yet. The coronavirus has really only been a concern here locally for maybe a fortnight. I was away last week when it was raining all week. Sales were a little bit down but I think it was more due to the rain. Those figures were quite consistent with other rainy periods.
Even over this past weekend it was definitely quieter. A lot of customers who came in were asking about it. They were interested to know how busy we were and they wanted to keep us busy. A lot of our usual customers were saying that it’s good to shop local and that they wanted to support their local businesses during this sort of time. That was really good and I hope that sentiment trickles through to even customers that you wouldn’t call your regulars.
I think it’s a wait and see at this point.
Yvonne Pfau from My Ride Alice Springs in the heart of the Northern Territory said:
Retail’s up and down. One minute you think you’re going great guns and next minute there’s something that knocks you down. I’ve had the shop since 1986. I’m part of the furniture now!
We’ve got marked trails up here now so you can go out and pick what grade of trail you want. We’ve got a walking and bike path that goes out to Simpson’s gap. They’ve designated more money to build that same style of path all the way to Glen Helen George. That’s 138 km out of town. I envisage it’s going to more of a commuter bike trail with offshoots for mountain bikers as well. There will be camp spots along it as well.
That will be a really good addition because there’s nice scenery all the way out there.
The town is perfect for riding bikes now. There are more and more bike paths around town.
Corona virus effect
The corona virus is really going to put a lot of question marks in front of us all, I think. It will test us all a bit.
We haven’t noticed any effect yet. We’ve only had one case in the Northern Territory so far, which was in Darwin. But it’s going to affect us because we need tourism and everyone coming into Australia now has to go into isolation for two weeks. So that’s going to impact us greatly I think.
There’s a lot of talk about it, but we haven’t yet had direct impact to our business. There’s other businesses here already effected. We’ve got two mines that have had to shut down temporarily because they can’t get the parts they need from China.
Our direct business from our shop to tourists is very low, but if the money is not going around the town, then it will effect us.
We do a lot of work for ‘grey nomads’ and I guess they’ll still come through, but it’s not a big percentage of our business – things like flat tyres. They drive through with their bikes on their vehicles. Also families that are travelling on the road will have bikes for their kids as well.
I wish everyone well. It’s a bit scary. It’s the unknown. We just don’t know how it’s going to affect all of us.