DTC ELECTRIFIED
Record growth in e-commerce fueled by COVID fears and restrictions has altered the way consumers shop. This sets the stage for further online growth in 2021, though we expect sales will return to earth growing at a more modest 12%. The deceleration is expected as consumers may gain more access to brick and mortar retail by Q3 if authorities are comfortable with vaccination rates at that point in the year. Remember, the online sales segment now represents about 19% of all goods sold, so if your DTC sales are not reaching this target you might be missing out.
BIKE MEETS MOTOR
Trends sometimes travel from West to East, think Mountain bikes in the late 80’s, and sometimes they move westward, think e-bikes from Europe! With Bosch, Fazua and Brose motor systems coming west, we believe US e-bike sales will continue growing by 60% minimum in 2021! We think another year of 100% growth could easily be achieved if brands can deliver on product demand. The other big driver of e-bike sales for ‘21 will be model diversity.
E-bikes like the Masi Fazua gravel bike pictured above with 80 mile/128 kilometer range will offer cyclists excellent cross-utility for city, commuter, mountain, road, gravel, and delivery use.
MIGHT SEE CHOPPY WATERS BY Q3, 2021
Bike and Outdoor brands had a year to remember in 2020! Supply chain strains limited by component volume bottlenecks, logistics issues, and the return of normal behavior could make Q3 growth unsustainable. Most brands are missing early turns with a lack of supply as the biggest issue to Q1 and Q2 success. We think this supply issue, combined with price increases, could put us in a situation that presents more supply than demand by late summer, leading to the potential of large Q3 and Q4 closeout sales.
Remember that housebound consumers chose to buy outdoor toys like bikes, tents, RV’s and backpacks when advised to stay out of planes and restaurants. We think when this COVID mess comes to an end consumers will be eager to eat out, and travel on planes to vacation and see loved ones. That spending reallocation will suck up disposable income that was previously spent having fun outdoors in 2020.
If you don’t see the “DTC Shift” progressing fast enough inside your organization please give us a shout.
Think+Crank™
Scott Montgomery