Segmentation strategy - Halfords abandons premium retail brand

Here’s a great example of a segmentation strategy that didn’t quite work out for leading bike retailer Halfords.

The Times reports that Halfords has decided to abandon its strategy of developing separate retail brands to target the premium niche of the cycling market.

Halfords has a 33% share of the general cycling retail sector; but only half that in the premium sector (higher performance bikes).

It will retrench its product range in the premium sector back into the main Halfords stores and brand. So Bike Hut and Cycle Republic will be closed at a cost of around £1.2m.

There is an interesting example of channel conflict in the Times article. Halford has developed its own range of premium cycles - which compete directly with the very manufacturers it was trying to offer in its retail outlets. Not surprisingly, Halfords struggled to gain distribution rights for from these competing manufacturers.