THE
SKATER'S
EDGE
Skatecycles
Lately I have noticed an increase in the
number of skateboarders on the streets in
my neighborhood. This isn't really a sur-
prise to me due to the fact that the industry
has recently seen an increase in overall
business. As I look back over the history of
skateboarding, I realize that this has hap-
pened before, this upswing in business, fol-
lowed by a leveling off period or consistent
sales, followed then by a slow decline of in-
terest. I've come to the conclusion that
skateboarding follows a definite cycle in its
life, not one that is only unique to it, but one
that is common to a lot of things in our lives.
The skateboard industry, like individuals,
passes through a series of stages in its
complete life. While humans progress from
infancy to childhood to adulthood to retire-
ment to death, a successful industry will
progress through five similar stages-in-
troduction, growth, maturity, decline, and
sometimes death. This progression being
known as the life cycle of the industry. It
might be interesting to follow skateboard-
ing through its life cycle to see if we can pin-
point where we are and maybe where we
are going in the future.
Introduction stage: this is the first stage in
the life cycle. A firm's main objective in this
early stage is to stimulate demand for the
new product. Since the product is not
known to the public, promotion stresses in-
formation about the product's features and
uses. In the skateboard industry we only
saw one real introduction stage for the in-
dustry as a whole, that is, the introduction
of the activity of skateboarding to the mass-
es back in the 1960s. Today we see indi-
vidual introductions for products new to the
market, like a new design for wheels,
decks, etc.
Profit losses are common during this
point of the cycle due to heavy promotion
and initial start-up costs, but the ground
work is laid for future profit earnings. Often
times in the skateboard industry we will see
one company taking the chance of intro-
ducing a new product design, making the
necessary expenditures of introducing the
product with other companies, then
capitalizing on the idea introducing similar
products without the initial expense. This is
a common activity in a number of indus-
tries, but unfortunate when it leads to second
rate and inferior products.
Growth stage: sales volume rises rapidly
during the growth stage as new customers
make initial purchases and early ones re-
purchase the product. Word of mouth and
additional promotion will induce buyers to
the product.
Oftentimes in the skateboard industry,
this word of mouth advertising will sell a
majority of the products available resulting
in regional sales pockets. An example of
this is the popularity of one style of truck in
a geographic area, with a majority of the
skaters using the same brand. Anyway, as
a firm begins to see profits from its initial in-
vestment during the growth stage, competi-
tors will be attracted. Success in anything
will produce imitation and other companies
will rush into the industry in search of prof-
its. This activity has plagued the skate-
board industry throughout its history. Each
time the life cycle hits the growth stage,
new and old companies enter the market to
tap in on profits. The companies that have
endured through the rough times are now
joined by these fast-buck companies who
only appear when profits are imminent.
Who gets hurt by all this? The buyer. In
order to grab a piece of the action, new
companies must offer an incentive to the
buyer to try their products, usually a lower
price through a lower quality product. Also
during this stage we see a number of toy
companies attempting to imitate the higher
quality products, with their low market price
ideology. This results in a flood of junk
equipment on the market. Along with these
low price products, we may experience an
overall increase in prices of the higher qual-
ity equipment as the original companies
seek to compensate for lost revenues.
Maturity stage: industry sales continue to
grow during the early part of this stage, but
they eventually level out as the supply of
new customers is depleted. By this time, a
large number of competitors have entered
the market and profits decline as competi-
tion rises. Also in this stage we see little dif-
ference between competing products as
manufacturers discover the most popular
product characteristics that are desired by
customers. Do you remember walking into
a skate shop and noticing that board
shapes, truck designs and wheel shapes
were all about the same? This was a point
where the industry was late in its maturity
stage, with companies playing it safe and
putting out only the most popular designs,
oftentimes closely resembling each other.
We may also witness slight price cuts in this
stage to attract new buyers into the market.
This starts a chain reaction among com-
petitors, decreasing profits for all firms and
leading the industry into the last stage of
the cycle.
Decline,stage: in this final stage we see
an absolute decline in industry sales, due
to consumer disillusionment with inferior
products or simply the shifting of consumer
interests. Industry profits will decline and
sometimes become negative as sales fall
and firms cut prices to grab the remainder
of a dwindling market. Those manufactur-
ers that we saw enter the market in the
growth stage will now leave in search
of more profitable ventures, leaving the
dedicated companies until the next cycle.
The length of the total life cycle and each
of its stages usually varies. A new product,
for example, may have a total life span of
12 months, with an intro stage of one
month, growth for two months, maturity for
eight months, and a decline of one month.
In the skateboard industry as a whole, we
usually see very short intro stages, if at all,
frighteningly short and fast growth stages,
long maturity stages, and longer decline
stages. A complete life cycle doesn't al-
ways run a smooth course, oftentimes we
may witness spurts of growth and decline,
attracting new companies to either dive in
or bail out prematurely, with older com-
panies holding firm.
So now that we have a general idea of
the life cycle of our sport, where do you
think we are and in which direction are we
headed? Well, from my point of view we are
on the edge or already into a new growth
period. New companies are starting up, old
ones are reentering the market, and most
importantly, new skaters are appearing
everywhere.
So where do you fit in and why the lec-
ture on life cycles? Well, whether you are
aware of it or not, you are the glue that holds
this whole industry together and you have
the power to influence the chain of events.
Maybe by being aware of what stage the
sport is in, you can help it become that
much better than it was in the past. Be
aware of those companies starting up and
returning in the growth stage for a fast
buck. Support those who have endured the
complete life cycle of the sport, companies
as well as those diehard shop owners, be-
cause they are the ones who will still be
around to back up our sport when things
aren't so pleasant or profitable. Take care
and skate safe.
Bob Denike
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