About the development of retail

Reading time: approx. 5 min

Why is the bike shop around the corner closing?

Where there was a bike dealer yesterday, there is now a sign saying: For rent. And when you finally find a dealer somewhere, they don't have the parts you want. What's going on here?

The bike dealer makes a living on two pillars: 1. the sale of bikes and 2. repairs and sale of spare parts. When he sells a bike, he earns good money. He does have to buy the bike and storage costs money, but the effort required for a consultation is comparatively low. And: the more expensive the bike, the more money he earns. That is why there is a lot of interest in selling electric bikes.

The situation is different when repairing bicycles. This work requires manpower and has to be carried out hour after hour. This work can be reduced in small parts by using new parts. For example: if the rear wheel is flat, the dealer can repair it by hand by turning the spokes. He sits there for half an hour and earns perhaps 20 euros. If he puts in a new rear wheel, he is quicker and now earns at least 60 euros. Sustainability has once again lost out to profitability.

A pure repair business without selling new bikes is hardly profitable, as customers are not prepared to bear the actual costs incurred by the repairman. If the estimated repair cost is more than 250 euros, the potential repair customer would rather go for a new, cheap bike. In addition, the availability of spare parts is low if the bike is older than 20 years.

A small example from the area of ​​household goods is helpful here. In the past, when someone bought dishes, they did so from a specialist retailer and assumed that they would use them for a lifetime. Therefore, buyers placed importance on a so-called after-sales guarantee. What is the use of having a beautiful set if after ten years there are no more individual parts? That was the line of thought. And the manufacturers took this into account. This resulted in huge stocks. And what does stocks do? It costs money.

But then: the distribution channels changed. The specialist trade collapsed, sales suddenly took place in furniture stores. The price structure changed: prices plummeted. The useful life changed: tableware became a consumer and fashion item that people were happy to replace after five years because they had grown tired of it. The result: the porcelain manufacturers were left with their stock items and had to close. In this mixed situation, no single market participant is to blame for the development.

This example can be applied one hundred percent to the bicycle sector. Distribution channels, price structure and consumer behavior have changed fundamentally. The consumer only has influence through his purchasing behavior. And unfortunately, this is also determined by the thickness of his wallet. What is the point of realizing that it is worth buying high-quality items if he does not have the means to do so?

Bonjour Tristesse: How is the fact that we buy at discounters and online changing our city centers? This does not only affect the bicycle product group - all sectors are affected. The mix of shops is changing dramatically and is becoming monotonous, as we are currently experiencing. Snack bars, cell phone shops, fashion chains and restaurants are lining up next to each other, which is also a question of rent prices. We are already forced to order special items online, as the corresponding shops have long since died out. A development that Alexander Mitscherlich   could not have foreseen in his book “On the Inhospitality of Our Cities”, but would certainly be worth a chapter today.

What gets left behind is not least the shopping experience, which is poor when the desired product arrives by post. Comparison, advice, visual and tactile experiences are missing. The purchase is no longer an event, the consumer's reward is limited to the artefact.

What to do? A good suggestion: launch a trial balloon. Conquer the remaining specialty shops in your area. Do this even if you don't want to buy anything at first. Make the search for small shops a little leisure activity. Adventure is waiting on your doorstep.

(Christoph Preussler)