While its foldable bicycles have appealed to older riders, the challenge is to connect with younger cyclists
Since its founding 26 years ago, Bike Friday has kept to its own unusual path. While many other specialty bike manufacturers have focused on building high-end, ultra-expensive, full-size bicycles, Bike Friday has occupied a very different niche: making more moderately priced bikes with small wheels and foldable for easy transportation.
The formula has worked well thus far. With 22 employees at its Eugene headquarters and factory, and a full slate of foldable, small-wheel bicycles, Bike Friday sells its products, typically about $2,000 a pop, to older, relatively well-heeled individuals keen on travel, touring and commuting. Bike Friday is the only U.S.-based maker of folding bikes, up against much larger major competitors based in Taiwan and Britain.
But big challenges loom for Bike Friday — and for the bicycle industry as a whole, said Bike Friday President Hannah Scholz.
The bike industry has been heavily driven by catering to older, wealthier white male bicyclists who favor very spendy, technology-intensive bikes, Scholz said. Younger people who may not have the cash for a big purchase haven't been much of a concern, she said. Yet to keep going, the industry needs the younger market, including young families, she said.
"The bike industry is not keeping up with the new generation. They are designing for the next fad and are really focused on older white men and sports stuff, and not really focused on how to serve families or how to serve women," Scholz said. "They are motivated by selling to male sports cyclists."
Scholz was founded by Hanna's father, Alan Scholz. He remains CEO, while she is in charge of operations and strategy.
Challenge of younger buyers
Hanna Scholz said her task is mapping out an avenue forward for Bike Friday that engages younger buyers.
Younger bicyclists likely don't have the income of older riders, and they also may want a bike for a very different reason, she said. They may be "looking for ways to have a really simple footprint in their lifestyle." she said.
"My challenge is finding out how to offer what the younger generations are wanting. ... High quality and high performance, but also the utility value. (A buyer) may only have one or maybe two bicycles, and they are really going to have to last a long time."
Reaching the younger market is not easy, she added. Many bike shops are struggling to make ends meet because bike manufacturers are increasingly bypassing bricks-and-mortar stores and selling via the Internet, she said. Plus, conventional media avenues, such as print magazines, are not reaching younger people, she said.
Reaching young consumers "is a struggle every industry is going through right now," she said.
One innovative move by Bike Friday: Using Kickstarter to help fund the launch of two bike models, the Haul-a-Day three years ago, and the pakiT two years ago. Using Kickstarter, people donate money to a company venture in return for a promise of services or products if the venture succeeds. In Bike Friday's case, the company offered donors low-cost bikes. Scholz said Kickstarter was a good way for Bike Friday to bond with a younger audience. Scholz said she wants to use Kickstarter again but hasn't settled on a project.
Bike Friday's workforce does extensive manufacturing and assembly at the company's west Eugene factory. The entire frame of each bike is made there — cut, shaped, welded — from raw tubing the company buys. Bike Friday buys wheel components — rims, hubs and spokes — which it assembles in Eugene into wheels. The company buys components that it adds onto bikes — pedals, tires, gears, brakes and the like — from vendors, most of them in other countries, Scholz said.
Custom orders are king
Virtually all the company's output is custom and made to order for buyers who have contacted the company by phone or email, she said. The company does have some bricks-and-mortar stores that order bikes, especially in overseas markets, she said. But in the United States, orders from bike stores are relatively thin, she said.
About 75 percent of the company's output is to U.S. buyers, with the rest sold overseas, mostly in Japan, Indonesia, Thailand and Singapore, she said.
The most popular bikes include the New World Tourist, a touring or commuter folding bike that starts at $1,300; the Haul-a-Day cargo bike, that starts at $1,300; and the pakiT, an ultralight folding bike that starts at $1,150.
Bike Friday's typical customers are over age 50, like to travel, care about their health and usually have higher education, Scholz said. "But we're moving into younger groups as well, younger families raising kids who care about health."
On the technological side, Bike Friday's innovation in the past year has been adding a line of electrical-assist drives as options for its bicycles. The attachable units weigh about 13 pounds.
Some much larger competitors make folding bikes, she said, but Bike Friday is the only U.S.-based manufacturer. Big competitors are Taiwan-based Tern and U.K.-based Brompton, Scholz said.
Scholz sees Bike Friday's prospects as stable, even while the entire industry struggles with the shift into online sales, not just of bicycles but of bicycle accessories that were crucial to bricks-and-mortar bike stores. "Bike stores have lost a bunch of revenue stream and have been struggling to find a business model," she said.
She counts herself lucky to be based in a metro area that values bicycling, has extensive bicycling infrastructure and a large bicycling community. To foster close ties with local cyclists, Bike Friday offers discounts, typically of 5 percent or more depending on the time of year, to local residents, Scholz said.