Theories of Dynamic Tension, Critical Mass, And Black Holes.
In the wake of the, ah, mixed reviews that ensued from Interbike Demo East last week, now might be a good time to reconsider the whole Interbike question from an insider’s perspective…and why it makes almost no sense whatever that the biggest trade show of the year is held in the middle of September, without many of its biggest players, in the bike-unfriendliest district of what is already one of the least bike-friendly cities in North America.
Better minds than my own (which, I realize, could be just about anyone’s) have struggled with this problem, only to give up under the Sisyphean challenge of making sense of the whole messy thing. If I have succeeded where others have failed, it’s only because I realized early on the possibility—indeed the very probability— that trying to make sense of any and all questions concerning Interbike’s location in time and space are ultimately doomed, because in fact they make no sense whatever.
Like so many things in the bike business, understanding Interbike is like peeling an onion: by the time you reach the center, you discover there’s nothing there. That and the stink on your hands, of course. So here’s a series of three multilayered questions and answers designed to peel away the layers a diverse as misplaced corporate greed, the rise (and fall) of the mountain bike, and the ever-changing dates for Chinese New Year (really!). All presented one at a time so you can discover for yourself the Great Nothingness which resides therein.
1. Why September? The Dynamic Tension Theory
The Dynamic Tension theory, for those of us old enough to remember Charles Atlas ads in the back of comic books and/or to’ve had sand kicked in our faces by bullies at the beach, involves equally strong opposing forces counterbalancing each other. Which, we might point out, accomplishing exactly nothing. In the case of bike business trade shows, those opposing forces are suppliers and retailers. But the results are the same.
The short answer is, suppliers want dealers’ orders as early as possible in order to book their own orders for factory time and materials, and then have the retailers take delivery on their product as soon as possible. This accomplishes three important things: it streamlines the manufacturing process (meaning better prices and improved reliability of delivery), locks down as many of the retailers’ open-to-buy dollars as possible, and most importantly, puts the inventory in the retailers’ warehouses instead of their own.
Retailers, understandably, want to see suppliers inventory their own darn product and deliver it to their places of business as needed. That’s—according to retailers, anyway—what suppliers are supposed to do. (Suppliers, needless to say, have their own version of this theory, mentioned above, and which they propagate by means of non-cancellable advance orders and 180-day lines of credit. Both theories have their merits and disadvantages.)
“As needed,” for a big chunk of the country anyway, means March or April. In California it can run as late as May, which is when that quirky state’s joke of a “rainy season” ends. (In Seattle, on the other hand, it rains all the damn time anyway, so people tend not to care what month it is.) And for virtually all retailers, September is still a critical part of the selling season and one of their best months for making money. And as a result, one of the worst for having trade shows. This is one reason Interbike is always held in the middle of the week—so retailers and their staff can get back to work as soon as they blow town in a haze of jet exhaust and beer fumes.
For years, bike industry trade shows were held in January (BDS) or February (the old Toy & Bike Show in midtown Manhattan), or even (in the case of the now-defunct CABDA show), as late as March. Retailers would slog through the snow and ice (or go to sunny Long Beach where the BDS show was held, literally, in a basketball rink that always smelled funny), order up what they wanted for the coming season, and expect to have it delivered a couple months later.
They didn’t get it, of course, but that’s what they expected.
Now here’s the longer answer. The balance of power in the industry was changing. Prior to, say, 1980, you had Schwinn Bicycle Company of Chicago on the one hand—Schwinn being the equivalent of modern-day empires like Trek, Specialized, and Easton-Bell Sports, all rolled into one and ruled like a kingdom by whichever male member of the Schwinn Family Trust happened to be dictator-for-life at the moment. And on the other hand, you had, well, everyone else.
Schwinn was so powerful, in fact, that they could book their preseason orders pretty much whenever they wanted, and with the actual product largely sight unseen, and leave the scraps for the peons.
But in the 1980’s two things happened: the rise of the mountain bike, and the collapse of Schwinn family. Some historians correlate these events to a higher degree than others, but the net effect was the same either way. Schwinn had a massive, vertically integrated, almost industrial revolution approach to supply chain management. The new breed (like Specialized and GT and, later on, Trek and Cannondale) had much less interest in being in the manufacturing end of the business. They saw—correctly as it happened—that Asian-sourced manufacturing was not just cheaper, but ultimately better than Made-In-USA product (with the possible exception of the old Schwinn Paramount factory, which survives to this day as the artisan brand Waterford). But Asian manufacturing meant longer lead times—that ocean’s not going to cross itself, you know. And lacking the power of suppliers to compel retailer orders the way the old Schwinn had, that meant earlier trade shows.
The Bottom Line. Strategically, Interbike is all about getting retailers to the show. Everything else is window-dressing: deliver enough retailers ready to buy stuff, and suppliers will flock to Tierra del Fuego on Mother’s Day. And the current fourth-week-in-September dates represent that point of dynamic tension between the latest date suppliers can wait for retailers’ orders, and the earliest date when the retailers are willing to show up and deliver them.
Tweaking these dates get you into hot water no matter which way you jump. Move them up a week and you’re in the middle of the High Holidays for those of the Jewish persuasion. Push them back a week into October and even more suppliers will defect and decide it’s more cost-effective to put on their own shows, as any number of big (and even not-so-big) suppliers are doing.
Some folks might even say naive things like, why don’t we time our trade shows/model-year introductions to generate excitement among consumers and maximize increase sales industry wide? But as shown above, that would just be silly.
Next week: Part II