 |
| Schwinn Panther Advertisement, 1950 (Image: Schwinn Catalog, 1950) |
The full history of Schwinn bicycles as a family business can be found in a separate, much longer article called "A Short History of Vintage Schwinn Bicycles."
This article is about Schwinn's history in the 1950s and 1960s and it is also is part of the full history.
Schwinn Catalogs provide an interesting source of Schwinn history and can be found at Vintage Schwinn Bicycle PDF Catalogs.
Schwinn Becomes a Cultural Icon in the 1950s
Frank W. Schwinn was making all the right movies. His vision for the company was either prescient or just plain lucky. Starting in the 1930s, he turned towards building stylish bicycles with flashy chrome and marketing them to kids. He also introduced a line of state-of-the-art lightweight bicycles for adults that were way ahead of their time. In an era of inexpensive cookie-cutter bicycles sold by large retailers, he gambled that consumers would pay for style and quality. He pivoted Schwinn’s reliance for sales through large retailers towards independent bicycle companies that were more in tune with consumer bicycle needs. Finally, he tweaked Schwinn’s “fair market” policies so that retailers could not compete against one another based on price.
By the beginning of the 1950s, Schwinn was poised for takeoff. The company was not alone. With the post-war baby boom in full swing, the whole bicycle industry was ready for growth. In 1946 when soldiers returned from overseas, three and three-quarter million babies were born, one of the highest levels in decades. This number would increase to over four and one-half million by 1955. All these children were primed and ready to ride bicycles produced by Schwinn and other manufacturers.
For the children of the 1950s, bicycles were more than just a toy. For them, the bicycle was a critical means of transportation and gave them the first taste of freedom from their parents. Children could independently ride around their neighborhoods, to a friend’s house, to pick up baseball games, or to just hang out. With the increasing suburban sprawl creating longer distances but safe low traffic volume streets, bicycles became something of a childhood necessity.
Schwinn in the early 1950s had a 25 percent share of bicycle sales, a level higher than any other brand. During the ensuing years, competitors would begin catching up with Schwinn. But with overall bicycle sales increasing, this was not a problem. Schwinn still increased its sales steadily from around five hundred thousand bicycles in 1950 to over one million by the late 1960s.
 |
| Schwinn Advertises Sales Dominance of the 1950s (Image: 1957 Schwinn Catalog) |
Schwinn also was in the process of refining its bicycle marketing strategies. The company hired an innovative marketing specialist named Ray Burch to liven up and better target their advertising. To better understand consumer demand, Schwinn also made it a point to listen to suggestions from its high-volume dealers.
Single-brand, authorized car dealerships were all the rage in the 1950s. Schwinn decided a similar model would work for bicycles. Schwinn began moving towards the idea of “Total Concept Stores” which eventually became “Authorized Schwinn Dealerships.” By happenstance, this had been a position advocated--but not fully adopted--by Frank W. Schwinn in the 1930s. It was not until the 1950s that his desire to break from large retailers would come to fruition.
The idea of moving towards dedicated bicycle dealers was reinforced by a visit of Ray Burch and his marketing team to a bike shop in California owned by George Garner that was selling Schwinn’s like hotcakes. A World War II veteran living in California, he had purchased a shop that sold a wide variety of products including bicycles. He got tired of selling model airplanes and other nickel and dime items. He decided to spruce up the shop and sell only Schwinn bicycles. The change worked and Schwinn bicycles began to fly out the door. The visiting Schwinn marketing team liked what they saw and took the idea of dedicated Schwinn dealers back to Chicago to sell to the boss.
The marketing team also did their research to back up their impressions. After painstakingly going through sales records, they found that 27 percent of Schwinn retailers accounted for 94 percent of sales (Crown and Coleman, 1996). To make matters worse, Schwinn marketing materials such as the catalogs at the end of this article were sent to small shops that sold less than one Schwinn per year.
Freezing out other retailers was not an easy decision. They represented a significant share of Schwinn’s sales. For instance, B. F. Goodrich sold many different products including Schwinn bicycles. In one notable conversation with his marketing team, Frank W. Schwinn said, “I guess you’re going to lose me that (B. F. Goodrich) account.” At the time B. F. Goodrich had 1700 different locations selling Schwinn bicycles. He also was friends with Alfred Sloan of General Motors who had developed a single-brand dealership model for selling cars. He accepted the advice of his younger managers and the “Authorized Schwinn Dealer” was born.
Schwinn also was not idle in developing new bicycle models. They launched the extremely popular Black Phantom in 1949. This was not much different than the earlier autocycle, but they added some fancy styling features that made it popular among consumers. The Black Phantom was advertised as having all the popular options, such as a spring fork, chrome fenders, horn button on tank, built-in fender light, and white wall tires. The model became quite popular during the 1950s and today they are a collector’s item.
 |
| The Black Phantom Was Introduced in 1949 and Was Instantly Popular (Image: Schwinn Catalog, 1952) |
Schwinn was facing increasing competition from Europe starting in the 1950s. The European bikes were lighter and featured 3-speed internal gears. True or not, they also were perceived as being somewhat fragile.
To meet this European competition, Schwinn developed a line of middleweight bicycles. The top of the line middleweight was the Corvette, a name mimicking the popular sports car. The lightweight bicycles were still not selling very well and in 1954 middleweight bikes like the Corvette, Jaguar and Panther filled the void for older children and young adults.
 |
| 1955 Schwinn Corvette and Middleweight Bicycles Introduction (Image: 1955 Schwinn Catalog Front Cover) |
These middleweight bikes became an immediate hit and led sales barely one year after their introduction. They were marketed as being just as nimble as their European counterparts but more reliable. Because of their popularity, Schwinn had created a whole line of bikes for those that were not enamored with the stylish, yet heavy, balloon tire bikes.
Schwinn had hit on a winning strategy. To meet the increased market demand of the 1950s, Schwinn increased and more finely tuned its advertising and marketing reach, expanded the availability of a wide range of high-quality bicycle models, and concentrated sales to clean, modern stores. Competition would soon come, but in the 1950s Schwinn became the bicycle of choice for many Americans. The popularity of Schwinn would make it a national icon and carry it through the next several decades.
Good Times Roll in the 1960s
Schwinn was poised on the runway and ready for takeoff. After years in the making, in the early 1960s, the three legs of a strategy to improve sales were finally in place. These included investments in innovative marketing techniques, strengthened manufacturing capacity, and improved efficiency of the company’s dealer network. Frank W. Schwinn had begun implementing all these changes ever since the 1930s. In the 1960s, they had come to fruition and Schwinn was ready to “Let the good times roll” (Crown and Coleman 1996).
Schwinn increased sales by about 15% per year during the 1960s. Schwinn started the decade selling 500 thousand bicycles in 1960 and reached close to 900 thousand by 1970 (Petty 2007). The company also was not resting on its laurels because it was busy introducing popular new models. There were some clouds on the horizon, but they would not materialize until much later.
Amid the good times, Schwinn hit a bump in the road in 1963. After contracting cancer, the company’s long-time owner and president Frank W. Schwinn passed away at the age of 69. In the short term, this wouldn’t have any impact on the success of the company. He had put in place a competent team of managers that—at least for the time being—could carry on without him.
Frank W. Schwinn had built the company into a bicycle powerhouse in over 30 years. He introduced a glitzy line of children’s bicycles that sold very well from the early 1930s through the 1960s. In the late 1930s, he produced world-class lightweight bicycles—including the Schwinn Paramount—that were ahead of their times. In the 1940s he recruited Hollywood and television stars to promote Schwinn as the best bicycles in the world.
Frank W. Schwinn also was constantly innovating on the factory floor by investing in new manufacturing techniques. He also turned Schwinn from a private label maker of bicycles sold in retail stores to an iconic national brand backed by an exclusive dealer network. His contributions were not only beneficial for Schwinn but also for the entire bicycle industry.
 |
| Schwinn 1960s Dealership and Sign (Image: 1966 Schwinn Catalog) |
Frank V. Schwinn took over the role of his father. He was a hands-off manager and let others manage their divisions. He began emphasizing marketing and financing at the expense of modernizing the factory. He felt most comfortable in finance and sales but now had to run the whole company. This approach had some success in the beginning but over time it began to take its toll on Schwinn.
Schwinn still was a company that could spot trends and quickly produced new bicycle models. In 1962 an executive at Schwinn named Al Fritz noticed a trend in California of boys riding funny-looking bicycles. They had small wheels, long seats, small frames, and riser handlebars that looked like Texas longhorn steers. With this unusual configuration, he was surprised to see kids doing instant wheelies and riding on the rear wheel for blocks.
With thoughts on a new model, Al Fritz brought the California components back to Chicago to develop a prototype. Everyone at Schwinn who rode the prototype was amazed that such an awkward-looking bicycle could handle so well. The factory quickly cranked out a new line of bikes to satisfy what they rightly anticipated would be a new bicycle craze. Al Fritz came up with the name Sting Ray. The Sting Ray was an instant hit 42 thousand were sold by 1964.
 |
| New Schwinn Sting-Ray Craze in 1965 (Image: 1965 Schwinn Catalog) |
By the end of the 1960s, the beginnings of an adult bicycle boom had begun. With the 1950s kids now entering early adulthood and the environmental movement in full swing, road bikes were starting to become very popular. Schwinn had been making lightweight bicycles for decades without much sales success. Given this experience, they should have been well positioned to develop new lightweight models for adults. They had a middleweight line that was aimed primarily at teens. New models for adults called the Varsity and Continental had been developed in the early 1960s but with their dropped bars were not very popular.
These Varsities and the Continentals were road bicycles made from the traditional heavy steels, the same material used in producing the kids' bicycles. They relied on existing factory technology to weld the frame for the Varsity and Continental. The frames were built with innovative electro-forged welding techniques which gave the bicycle frame very strong with a smooth look at the joints. The problem was that this technique could not be used with the newer, lighter chrome molly tubing.
The Varsities and Continentals did prove to be popular among teenagers who were fairly rough on their bicycles. These models were a good fit because they had very strong, almost indestructible frames. Unfortunately, the bicycles were heavy compared to European imports because they could not be used with modern alloys such as chrome-moly. As a result, the Varsities and Continentals made few inroads into the adult market. Only 1 in 20 Schwinn bicycles were purchased for use by adults.
With favorable exchange rates, European and a trickling of Japanese manufactures began to sell large numbers of bikes in the USA. By 1970, European imports reached about 2 million bicycle sales compared to close to 1 million by Schwinn. Despite the popular models bought mostly for children and teenagers, the market share of Schwinn bicycles sold in the USA continued to shrink from an all-time high of 25 percent in 1950 to 12% by the end of the 1960s (Petty 2007).
After the death of Frank W. Schwinn, the three legs of the stool that had built Schwinn bicycles began to wobble. With catalogs featuring places like Disneyland and 20th Century Fox, marketing continued to be a Schwinn strong point. However, management had begun to ignore the need to retool its factory. Manufacturing techniques were beginning to become outdated. Sales were still at all-time highs, but with the market share declining, Swhinn’s dominance in the bicycle industry was on the wane.
 |
| Schwinn 1966 Catalog Features Disneyland (Image: 1966 Schwinn Catalog) |
Due to the inability to handle the new lightweight steels, Schwinn began to look for alternative ways to sell lighter bicycles. Instead of modernizing to make the new bicycle lines in-house, in the early 1970s, the decision was made to import lugged lightweight bicycles from Japan. Schwinn was not alone in this practice. To take advantage of lower wages and favorable exchange rates, many US companies were beginning to manufacture products in Asia. As an example, Radio Corporation of America changes its name to RCA Corporation to recognize its manufacturing of a large range of products and expansion into other countries.
The seeds of an end to the Schwinn family dynasty as a bicycle manufacturer had been sowed after Frank W. Schwinn’s death in the early 1960s. The company's struggle to maintain pace with the rest of the bicycle industry would turn into reality in the 1970s. Many were quick to blame the generation of family managers after Frank W. Schwinn but the rise of low-cost manufacturing in Asia was challenging for all American companies. “Made in America” was giving way to made in Japan, Taiwan, and eventually China. Schwinn was still a force in the early 1970s, but the bloom was coming off the rose of an iconic American company.
No comments:
Post a Comment