At the 2024 Bicycle Leadership Conference (BLC), Ryan Atkinson, president and co-owner of Workstand; Matt Tucker, director of client development at Circana; and Peter Woolery, managing member of Bicycle Market Research, combined insights from retail point-of-sale tracking, e-commerce data, and the used market to outline the state of the electric bicycle (e-bike) and mountain bike markets in the U.S. The presentation inspired a monthly collaboration we are calling the Nerd Collective. Ryan, Matt, Peter, and Liam Donoghue, bicycle industry senior research manager at PeopleForBikes, will meet each month to develop data-backed insights on the bike industry’s most pressing issues. Those insights will be shared through PeopleForBikes blog posts, emails, and webinars throughout the year.

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This first edition of the blog series offers a follow-up to the thoughts shared at the BLC about the mountain bike market. For those who didn’t attend the 2024 BLC, here are three main takeaways from the presentation:

• Discounting is driving sales, but there is still demand.
• Now that retail inventory has normalized, each new consumer sale draws down supplier inventory which is also starting to normalize.
• The used market provides an affordable way to get into mountain biking and ladder up.

Now with data through Q2 2024, we have some additional insights.

DISCOUNTING

Though discounting is still happening, the frequency and magnitude of discounts is starting to decrease compared to earlier this year. Between March and April, 69% of mountain bikes sold through independent bicycle dealer (IBD) e-commerce channels were purchased at a discount with an average discount of $626. In January and February, 80% of mountain bikes were sold at a discount with an average discount of $909.*

There is also evidence that customers are increasingly comfortable with purchasing a mountain bike online, a pattern that may be related to discounting. Online unit sales of mountain bikes increased 30% in February 2024 compared to February 2023 while unit sales at brick-and-mortar stores declined 4% over the same time period.** Similarly, through February, the sales growth rate found in IBD e-commerce sites through the Workstand platform outpaced the overall IBD market.* 

This pattern isn’t unique to mountain bikes or the bike industry. The same trend is happening for total retail sales as measured by the Federal Reserve. The share of e-commerce sales jumped from 11.9% to 14.4% of the broader retail market during COVID and the rate of growth has since stabilized to about half of pre-COVID pace. In Q4 2023, e-commerce represented 15.6% of total retail sales. 

One theory for why IBD online sales of mountain bikes are outpacing in-store sales is that discounts create a sense of urgency so as customers search for mountain bikes online, they are much more likely to click the “purchase now” button so they don’t miss out on a great deal. In combination with the familiarity the pandemic created around online purchases, this trend could continue in the long term.

On a related note, high-end mountain bike sales were particularly strong in February. Unit sales of mountain bikes priced $5,000+ increased 3% in February compared to February of last year while unit sales of mountain bikes below $5,000 declined 2%.** Retail discounts from large suppliers appear to have played a role here as well, encouraging enthusiasts (those most likely to make a purchase in the off-season) to buy immediately because they could get a better bike for the price. 

A word of caution — to the degree that discounting is pulling purchases forward (versus creating new sales), we may not see the same growth rate during the 2024 season.

INVENTORY

Though supplier inventory units were still 29% higher in March of this year compared to March 2019, inventory units declined 47% between March 2023 and March 2024, suggesting we are selling through supplier inventory.***  Importantly, retail inventory continues to be healthy with mountain bike unit inventory 42% lower in March 2024 than the peak experienced in spring 2022.** 

USED MARKET

Though the used market is often thought of as a competitor to new bike purchases, there is evidence that the used market can be a gateway to new bike sales by providing both a better bike/experience to new riders than they could to afford buying new and helping enthusiasts move up the ladder of engagement. The used market can also provide a way for premium brands to build affinity with riders much earlier in the engagement cycle. 

The chart below shows how the used market, particularly for full suspension, can help bridge the gap between rest of market (ROM) bikes and IBD's much higher average selling prices.

Have a question for the Nerd Collective to answer in a future blog? Submit it here.

*Based on Workstand IBD e-commerce sales data

**Based on Circana retail sales data

***Based on PeopleForBikes sell-in data from suppliers into IBDs

****Based on Bicycle Market Research data on peer-to-peer used marketplaces (eBay, Craigslist, Facebook Marketplace, Mercari)