The Business of bicycles
It seems that from coast to coast Americans are getting on their bikes in startling numbers. The National Household Travel Survey showed that the number of trips made by bicycle in the U.S. more than doubled from 1.7 billion in 2001 to 4 billion in 2009. Nationwide, the number of people who travelled to work by bike increased roughly 60 percent over the last decade. In another study, the number of bicyclists in the US increased from about 51 million riders in 2012 to slightly more than 66 million riders in 2017.
It is clear that more and more people will start to ditch their cars for bikes as they recognize the many health benefits of cycling and as municipalities continue to support cycling infrastructure.
Omni-channel retailing: a gear shift in complexity
The supply chains that support today’s leading cycling brands have been redefined by changing consumer behavior. E-commerce has many variants and as more and more of us shop online, cycling businesses have had to respond accordingly. Today, even local bicycle shops (LBS) have successfully established an online shop to bolster their existing retail landscape. That said, there are undoubtedly more stand-alone web shops today than there were 5 years ago.
As more and more bicycle businesses continue to explore the ever expanding omni-channel environment, maintaining high levels of availability is now of paramount importance. Given the transparency of pricing on the web, consumer demand in E-tail is far more erratic in comparison to traditional retail outlets. After all, regardless of whether the customer is shopping in store or online, stock-outs directly result in lost sales and disappointed customers. Consequently, businesses must optimize their inventory to ensure the right stock, in the right place, at the right time.
Product lifecycles: the grand fondue
Maintaining consistently high levels of availability across complex product assortments can prove difficult in the best of times. However, in the cycling industry, this challenge is only further exacerbated by the sheer number of new product introductions and ever-shortening product lifecycles.
Simply put, failure to manage product lifecycles effectively can come at great cost to the business: both in terms of lost sales due to poorly introduced new items as well as unnecessarily tying valuable working capital in obsolete stock that won’t sell!
As suppliers further up the chain release new product updates and variations as well as entirely new products lines, retailers have little choice but to add these items to their assortments. Even so, as these assortments grow, businesses must invest in tools and technologies that provide the required insight to make informed inventory decisions. Only then, can business put in place the right strategies to ensure new items are introduced effectively while end-of-life items are phased out with minimal financial impact to the business.
Seasonality: managing the fair-weather cyclist
Inventory challenges are not limited to new product lines and products at the end of the product lifecycle, even mature items can prove problematic. Given that every item is likely to have its own individual seasonal demand profile with different sales peaks throughout the year, business can easily find themselves dangerously exposed to seasonal fluctuations in demand.
For instance, while a long summer is likely to stimulate high demand for new bikes as people make the most of the good weather, a cold snap or a late-arriving spring could seriously hamper sales. Managed effectively, seasonal influxes can provide a welcome boost to sales. Yet, managed badly, these surges in demand can result in high levels of excess stock and, consequently, waste.
As a result, business must remain responsive to seasonal influxes and manage inventory levels accordingly. Through encompassing seasonal uplifts into the demand planning process, business optimize inventory levels before, during and after a season influx.
Outpace the competition with Slim4
Thanks to the accurate analysis and forecasting capabilities of Slimstock’s inventory management tool, Slim4, some of the biggest names in cycling rely on our solution to provide supply chain insights to make informed inventory decisions.
With the management by exception principle of Slim4, manufacturers, distributors, traditional retailers and E-tailors can focus their time and attention where it is required most, thus, ensuring planning teams are able to remain more responsive to the challenges presented by the omni-channel environment.
Ultimately, customers of Slimstock can make more intelligent supply chain decisions, respond to seasonal demand and manage product lifecycle: all while maintaining complete control of their entire assortment.
Retailer/ E-tail customers of Slim4 can typically enjoy the following results:
- Up to 30% reduction in inventory sales
- Increased availability across the entire range to over 97%
- Stock-outs reduction of up to 60%
- Greater control over inventory costs
If you want to know more, contact us directly to find out more.