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Wheels in motion: How the bicycle category is booming

The rise of sustainability, tech innovations and demographic shifts have all combined to provide bicycle retailers with a strong tailwind. Jenny Ling reports on how this fast-changing category is putting its pedal to the metal.

By Jenny Ling | December 19, 2019 | News

“Cyclists see considerably more of this beautiful world than any other class of citizens. A good bicycle, well applied, will cure most ills this flesh is heir to.” 

When it comes to bicycle retail in New Zealand, those words - spoken by 19th century New Yorker and cycling advocate Dr KK Doty - have never been truer.

We’ve always been a nation of cyclists, but the category is currently experiencing a boom, as increasing numbers of Kiwis take to two wheels.

Whether it’s riding for fun, fitness, or to work, and whether your wheels are mountain, road, cargo, folding, electric, vintage or BMX – New Zealand retailers have got you covered.

There’s been an increase in women taking up cycling, and electric bikes have prompted the over 55s to get back in the saddle.

In fact, sales of e-bikes in New Zealand are growing at a phenomenal pace, currently doubling year on year. 

More people than ever are using bikes to get to work and as a sole means of transport.

According to the New Zealand Transport Agency, cycling is now the fastest growing mode of transport in several cities and towns across the country.

More than 44,000 Kiwis use cycling as their main means of travel to work, figures from Statistics New Zealand show.

The Government is investing more money than ever before in cycling infrastructure which includes the urban cycleways and the New Zealand Cycle Trail.

Yes, it’s a good time to be a bike retailer in Aotearoa.

Meeting that demand are the big chains like Torpedo7, Bike Barn and My Ride along with smaller independent retailers who are having to diversify to compete.

Cycling Action Network, New Zealand's national network of cycling advocate groups, says cycling is the new tramping.

Formed in 1997, the organisation works with Government, local authorities, businesses and the community on behalf of cyclists for a better cycling environment.

Project manager Patrick Morgan says bikes are now outselling cars in New Zealand, with over 200,000 bikes being sold each year.

A major contributor to the popularity of cycling, Morgan says, has been the creation of Nga Haerenga - New Zealand Cycle Trail, which saw the government, councils and private trusts inject $120 million into creating a continuous touring route running the length of the country. 

The 22 Great Rides of mostly off-road trails showcase the best of New Zealand’s landscapes, along with our heritage and culture. In 2018, more than 1.3 million trips were taken by an estimated 400,000 trail users.

“It’s provided people with what they want which is great places to ride bikes away from traffic,” Morgan says.

“Cycling is one of New Zealand’s top leisure pursuits, it’s in the top five. New Zealanders have always loved riding bikes for leisure, and increasingly, more people getting on bikes around town, especially in cities that are building bike lanes. Cycling is the new tramping.” 

This renewed interest in cycling is also due to a “leisure boom” especially from people in their 50s, 60s, and 70s, Morgan says.

“Boomers love being outdoors, and cycling delivers a great outdoor experience; it’s social and they get to see fantastic places. And it’s not all about bikes, there’s also accessories, clothing, travel and events. It’s the whole package. It’s the lifestyle that appeals to New Zealanders.” 

Simon West, Torpedo7 chief executive.

Leading retailer Torpedo7 stocks a vast selection of bikes, snow and water gear, outdoor clothing, camping equipment, hiking gear, backpacks and outdoor technology.

The company was founded in 2004 and acquired by The Warehouse Group in 2013.  Torpedo7 was initially internally administered alongside another Warehouse Group brand, electronics retailer Noel Leeming, and transitioned to its own leadership in July 2019.

New chief executive Simon West says the company’s key outdoor categories are all embraced by the “adventure lifestyle” concept.

There’s been a big move to adventure sports as a lifestyle, with people wanting to do more than just road cycling and mountain biking, he says. 

“What we’re seeing is that it’s not all being driven by aspiring athletes with a specific event in mind, but also people who are outdoor enthusiasts... the ‘weekend warriors’. These are people who believe in ‘green time over screen time’ and think about outdoor sports as a lifestyle choice. The vast group of our customers are actually that 30-50-year age group who believe in positive lifestyle activities.”

Another area of growth is providing in-store bike workshops. All 18 Torpedo7 nationwide stores contain bike workshops. 

West says bikes have become much more technical, which is reflected in the level of services on offer. Many customers are now getting their bikes regularly serviced, just as they would their car.

“As the product becomes more technical, we see a need for more servicing. There is a higher requirement for service plans. Ultimately you want your bike to be really safe.”

Though Torpedo7 was awarded Wilderness Magazine’s Outdoor Retailer of the Year in 2015 and 2016, last year was disappointing for the brand, according to The Warehouse Group’s 2018 Annual Report.

While revenue increased 3.6 percent to $163.4m, it made an operating loss of $1.4m “because of ongoing challenges with a sub-scale operation and internal disruption connected with relocating parts of the business operations.”

“While it has been a difficult year for Torpedo7, it has also been a good opportunity to reset the foundation for the business,” the report said. “FY19 will be focused on establishing brand clarity, getting our inventory right and scaling the business, both physically and online, and we expect to be operating from a strong foundation by FY20.

West says the Group is investing in the brand and taking every opportunity for future growth and he has every confidence it will improve.

Opening several more stores is on the cards, including a Newmarket store in September, and stores in Rotorua, Tauranga and Christchurch later this year. The Group is also looking for another two to three Torpedo7 locations within the next 12 months.

“The Group and the Torpedo7 team are passionate about delivering a great brand and a great customer experience and we believe people will continue to migrate in terms of lifestyle.”

Tony Wilkinson of My Ride.

Another big retailer Avantiplus, which touts itself as “the biggest network of bike stores in the country.” It sells a huge range of bikes, parts, accessories and clothing.

The company is in the process of rebranding to My Ride, with over half of its 20 stores rebranded. The rollout is expected to be completed by October.

Company spokesperson Tony Wilkinson, who is also the owner of the My Ride store in Botany, Auckland, says there were a number of reasons for the rebrand including relevance, navigation, moving with the times and new competitors entering the market.

The bicycle retail sector is in good shape, he says, with Government programmes supporting growth.

He has noticed a “definite increase” in retirees and women taking up cycling, and commuting to work by bike is also increasingly popular.

Electric bikes have contributed to this increase, he says.

“E-mobility has captured many more consumers along with the great trails throughout the country catering for all levels,” Wilkinson says.

“There is a level of concern nationally for our health and wellbeing alongside corporate responsibility towards their staff whether it be transport or health.”

Wilkinson says ongoing service is expected of retailers now, and workshops continue to be busy.

“The home handyman still exists but bikes are becoming more technical requiring a more qualified approach to service. Consumers expect you to be able to look after their service needs if you have sold them their bicycle.”

Operating under the umbrella of Retail NZ, the Bicycle Industry Association of New Zealand is involved in the raising of retail and technical standards in the cycle trade in Aotearoa.

CEO Greg Harford says the bike category has been a tough business for a number of years, with strong competition, especially for accessories from online suppliers offshore.  

However, there has been increasing interest in cycling over the last few years, along with diversification from smaller retailers trying to compete with bigger stores.

“We’ve seen an increasing focus on diversification, for example coffee, clothing and servicing,” Harford says.

Harford believes there is a place for both large-format bike retailing stores and specialist independent players. 

The larger firms have greater scale and can deliver a uniform offering, while boutique bikes stores can focus more on niche products and services.

“As across the whole retail sector, bike retailers are aiming to provide an outstanding customer experience to make customers comfortable and happy to shop. Most Kiwis are pretty down to earth, and this is reflected in the bike retail community.”

Bicycle Junction.

One independent store doing things a little differently is Bicycle Junction in Wellington, which not only sells bikes but also hosts a range of events that celebrate the joy of cycling along with a cafe.

When owner Dan Mikkelsen opened his first shop in Newtown seven years ago, he merged his two passions, bikes and coffee, which remains at the heart of the business.

Located in Te Aro since 2017, the new store boasts a range of electric, adventure, folding, urban and cargo bikes and accessories, along with a bike workshop and a cafe serving great coffee and cabinet food.

Events include film festivals and full moon bike raves.

“We collaborate with the creative community in Wellington,” Mikkelsen says.

“We’ve teamed up with groups of artists to do performances in fringe festivals and we’ve held fringe shows in store. It’s all about bringing new folk through the store and creating a bit of a buzz.”

Mikkelsen also takes pride in having built an ethical business based on transport cycling.

He believes the simple choice of riding a bicycle as a daily mode of transport can be life-changing, helping people to reconnect with their communities, appreciate the environment and enjoy healthy lifestyles. 

This sets his business apart from big retailers.

“There’s big competition from big box stores on prices and competition from online. The smaller stores can’t compete on price, so you have to differentiate yourself through good service and support your local community. For us we’ve chosen a segment of the market we’re passionate about which is biking for transport. We’re out having fun showing what we do is fun, and people want to be part of that.”

Mikkelsen was a bike messenger in Copenhagen, Wellington, Melbourne, San Francisco and Montreal before training as a chef, which he did for 15 years before opening the shop.

Having a background in hospitality has helped him view customers differently too.

“We talk about guests rather than customers,” he says. 

“It’s a different approach to pure retail where everyone who walks in the door is going to buy something. We realise that people who are starting out riding for transport are often not current cyclists. They may be daunted by walking into a technical bike store, but they’re not daunted by walking into a cafe. We understand our market, and that’s what bike shops need to do.”

Figures from Stats NZ show $92 million worth of bicycles were imported into New Zealand from various countries in the year to June 2019 - that’s just over 256,000 individual bikes.

E-bikes - a bike with an electric motor powered by a battery - are fast catching up, with a total of 62,426 e-bikes and scooters with a combined value of $63.5 million imported into the country over the same period.

That’s a big jump from 11,424 e-bikes worth about $9.5 million imported in the year to June 2016.

The interest in e-bikes has largely been driven by baby boomers and increasing numbers of Kiwis using them as a method of getting around “without the sweat factor”.

Northland eBikes.

Northland eBikes in Whangarei stocks a wide range of different styles and models sourced through New Zealand-based distributors.

Ranging from $2000 to over $6000, they include e-bikes for trails, urban cycling and mountain biking, along with accessories and a diagnostic service and repair workshop. 

New owners Cameron​ and Donna Guildray bought the shop in July from Myles Green, who started the business from his garage eight years ago before moving to the current store in the city centre.

The Guildrays were living in Athens, Greece, where Cameron held a corporate job, when they decided on a change of lifestyle. 

They returned home to Whangarei with their three children and searched for a business to buy.  
 

“We cast our net wide and Northland eBikes really stuck out to us, it’s really well run with fantastic potential and a great customer base. It ticked lots of boxes. It also had key environment and eco-friendly fundamental elements to the business, as well as health.”

Although winter has been “a bit slower”, sales have been solid and better than anticipated, Cameron says.

Around 150 e-bikes were sold in the previous 12 months and Cameron expects to be exceeding that in the next year by at least 20 percent.

“E-bikes are the fastest growing segment of the bike market,” he says.

“Globally, e-bikes have surpassed conventional bikes in terms of growth over the last several years. Global e-bike sales will exceed $US 20billion by 2022. New Zealand is a little bit behind the ball in terms of uptake of e-bikes compared to Europe, Asia and the United States. Normal bikes are still the majority but that may well change over the next five years.”

The advantages of electric bikes are that, due to assisted pedalling, they require less effort and cyclists don’t work up so much of a sweat.

They also enable older people, or those who haven't ridden for a while due to injury or illness, to maintain speed while cycling with family and friends.

“People with e-bikes ride more often and for longer. E-bikes are less strenuous and you’re having more fun; you can go quicker for longer so the ride is more enjoyable.

“What we’re finding is the customer base is people aged 50 or over, and they’ve seen their friends and family riding, they’ve tried it and enjoyed it and want to get one of their own. They may not have ridden a bike since their teenage years and this conversion into cycling again has been driven from e-bikes.”

Cameron believes electric models built for mountain biking are becoming more popular, and he’s keen to leverage the trend. 

“Increasingly, people who enjoy mountain biking are getting into e-bikes because the ride up the hill is enjoyed as well,” he says. 

“We see continued growth and interest and what I hope is that the market expands a bit for us as business owners. We’re hoping we see more and more younger people taking it up.”

This story originally appeared in NZ Retail issue 764 October/November 2019.

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