2022 - A year in review for cycling e-commerce
Through 2022, we saw a significant change in how the industry operates, what sells well (what doesn’t), and the ever increasing external factors that dictate consumer behaviour. Although an exciting time for the sector with increased growth in new and interesting sub-sectors, the year hasn’t been without its challenges for online retail. We review the major trends for 2022, as well as giving our thoughts on if this will continue into the new year.
As seen in the research carried out by Statista, there has been a drop in the exceptional rate the sports & outdoors industry has been growing by over the past year in comparison to the previous 5, mainly driven by the repercussions of the pandemic and other international events affecting the global economy. The cycling industry has been equally affected by these events in the traditional areas, e.g. mountain & road bike sales, however it has also led to many opportunities for the industry to continue to grow such as the rise in e-bikes and increasing commuter bike sales.
E-bikes continued upward trajectory
If, by some chance, you aren’t stocking e-bikes or don’t think they will sell online, chances are you are missing out on significant opportunities for growth. In 2022, the rise of different variations of e-bikes became increasingly prevalent, with the sales of cargo bikes increasing significantly throughout the year, due to many factor, including but not limited to the squeeze on consumer spending, more environmentally conscious consumers and the increase in businesses exploring cargo e-bikes as a viable alternative to vans and cars for delivery services. To keep banging that drum, E-bikes and E-transport is very much part of the landscape and we would highly recommend those that are choosing not to stock them to research more around what value this may add to both your business and your loyal customer base.
Commuter bike growth
E-bikes aren’t the only area of the industry to have seen a spike in popularity over the past year. Commuter bike sales have been steadily growing as consumers look for an alternative to driving & other forms of transport. With environmental & economic benefits, we expect to see this trend to continue in 2023, it’s worth reviewing what offering you have for commuters. One key way to improve sales of these bikes is not just to advertise the products themselves, but also the key benefits of owning a commuter bike, instead of using other types of transport. For many, this may be the first time they have ridden a bike since they were young, so educating the consumer is an important step in engaging them, and bringing in that sale.
More congested digital landscape
We are all aware of a significant shift in the industry this year, with brands looking to sell directly to the consumer. This has unsurprisingly caused an increase in competition, especially with those brands primarily looking to generate sales through their e-commerce offering, instead of the traditional brick and mortar stores. Ripples of this effect have been wide-spread, for example, avg. CPC (the price online retailers are paying for a potential customer to click on their advert) has increased by 21% on average.
Stock surplus causing price wars online
After the supply issues caused in 2020 & 2021, we have flipped to a time of surplus stock within the industry. This combined with lower consumer spending due to a financial slump, has meant that many retailers have moved to significant discounting in order to move stock. Although not a new tactic, the end of 2022 has seen this taken to new levels, with increasing price drops meaning margins are diminishing, making it harder for smaller retailers to compete in an already busy marketplace. We expect this trend to continue into the first few months of 2023, however this will likely be mitigated by reduction in pricing from the brands, economic forces at work may see a reduction in supplier price, meaning the end rider and the retailer benefit.
Cost of living squeeze
The current financial climate has had an impact on consumer buying behaviour. This has led to many exploring new options when looking to pay for their products. For many this comes in the form of payment finance, with V12 and Klarna being two of the most popular used by cycling retailers,we’re reliably informed that Santander’s offering is imminent. This flexibility has made the cost of buying a new bike more affordable for the consumer, and has lessened the impact of the current financial situation.
The wider cycling industry landscape is in a very positive place. With a growing number of bikes being sold each year and huge demand for new products, there is ample opportunity for retailers to thrive in 2023, however this growth and subsequent opportunity should be navigated with caution. Global financial insecurity will dictate consumer buying behaviour, and it may be an idea to be reserved with regard to forecasting based on these factors to preserve your cash flow. Ever increasing digital sales (17.8% of all purchases in 2020 in comparison to an expected 20.8% in 2023) shows how important it is for retailers to cement their digital presence, and make the most of the e-commerce offerings.