BLC + SOC SUMMIT TAKEAWAYS

We were pleased to attend both the Bicycle Leadership Conference presented by People for Bikes and The Summit presented by Life Time and Sea Otter Classic. Adrian attended the BLC, I attended The Summit. So what did we learn?

6 MILLION MORE BUCKETS

COVID added 6MM more cyclists to the US market in 2020 and 2021. While we know we can not retain all those new legs, we should retain at a minimum 3MM consumers, and we should be able to convince many of them to upgrade their parts, accessories and bikes in 2022. The mood and outlook for the year at hand may likely be down from the off the charts 2020-2021, yet it still looks very strong versus the pre-COVID 2019 market.

E-MOBILITY RULES

One session of particular interest at The Summit was based around E-mobility. The first segment was hosted by MidOcean Partners’ DJ Jenson. He spoke about the exploding global growth that is likely to reach $1 trillion dollars annually at some point in the future when you combine E-mobility and micro mobility. DJ said, “This is the most significant industry upheaval and shift in a century.”

Bosch’s North American E-bike General Manager Claudia Wasko confirmed that in 2021, there were over 600,000 e-bikes sold in North America. While this pales in comparison to the 5.6 MM e-bikes sold in Europe in 2021, it does show that there is tremendous potential for further growth. I later ate dinner with Claudia and said that I felt there were closer to 1MM bikes sold in the US in 2021 when you add all the direct-to-consumer (DTC) brands that do not share sales results with the NPD Group, and are therefore unrecorded. Wisely, Claudia did not comment only to say, “We at Bosch are very conservative.” So we will never really know, but regardless of the final number, the US is finally onboard and gaining speed. We will likely continue the rapid growth pace again in 2022 at least until 2030 based on a smaller and later start than seen in Europe.  

DTC GROWTH REVISED FOR 2022

DTC STILL OUTPACING B2B

In-store retail sales have recovered, though they will likely see slower 3.58% growth in 2022. DTC growth is still expected for 2022, but at a slower rate than in 2019, 2020, and 2021. Global growth has been revised from a 15-16% rate forecasted last winter to a still significant 12.7% rate.

The average cost of sales (ACOS) is generally increasing as more brands migrate marketing spending toward digital techniques. This trend is pushing up ad bids, and therefore overall advertising costs.

Based on our CrankTank actual results in Q1, growth is getting trickier. This comes as consumers are feeling the pinch from high inflation and are cutting discretionary spending. People paying more at the gas station and restaurants, as well as the rising costs of housing with both mortgage rates and rents pushing upward, are all contributing factors.

TIME TO OFFER SOME BUY NOW PAY LATER LOVE

HELP YOUNGER WALLETS 

The younger the customer the more likely they are to utilize Buy-Now-Pay-Later (BNPL) options! Certainly the more affluent older customers are more likely to pay on purchase as they are more flush and have lower borrowing costs. If your AOV is less than $50, then it probably is not crucial. But for products over $100, $200, or more, we think a BNPL option is important to keep sales growing in 2022. If you need some advice on what program is best for your brand, give us a call or email.

Think+Crank,

Scott Montgomery

CEO, Founder