What can I say about the 2020 bike market that hasn't already been said? It certainly was an adventure for all of us.
There is one topic that I can offer a unique perspective on that may help your business as you prepare for a new season.
I’d like to talk about what we saw from our vantage point at SmartEtailing - and offer my take on what you can expect moving forward.
1. Bikes sold online
There has been an ongoing discussion within the industry about the best consumer experience for purchasing a bike - and what actions businesses should take to influence the consumer purchase journey.
While this discussion is still relevant, we now have undeniable evidence showing that the purchase journey itself is outside our control.
When market conditions constrained purchasing options, consumers fluidly shifted en masse to ecommerce to buy bikes site unseen - with online sales growth for bikes significantly outpacing in-store sales.
What does this mean for bike shops? It means that if you don’t have online sales capacity moving forward, you are shutting down what is now an essential path to purchase for a significant portion of the bike buying market.
It also means that competition will continue to increase for bike sales. Not only will a large percent of your local competitors be selling online - but so will manufacturers, pure-play ecommerce sellers, and marketplace sellers.
Manufacturers who lack an adequately digitized retail network and/or insufficient resources for direct-to-consumer (D2C) demand creation and logistics will increasingly add pure play ecommerce sellers to their distribution makeup.
An increasing number of manufacturers will allow approved retailers to ship complete bikes to consumers - so now local bike shops from across the country will be competing for consumers in every market.
This single takeaway from 2020 should be top of mind for any local bike shop that intends to remain competitive over the next five years.
2. SmartEtailing can produce results
By our estimate, 20% of bikes shops in the US and Canada rely on SmartEtailing as their online store. So that means we had a tremendous responsibility to perform during 2020. I’m pleased to say we did precisely that.
In 2020, we achieved 99.98% uptime along with a 40% improvement in site speeds - all while realizing a 140% increase in website traffic.
We measure ourselves based on online sales for our clients. You succeed. We succeed.
SmartEtailing network sales were up 814% year over year. If you compare the growth rate of website visitors to online sales, you can learn a couple of things. First, as I shared earlier - a LOT of bikes sold online.
But that being said, average order value was only up 44% from the previous year. Total orders, on the other hand, were up 534%. That signals that one of the key drivers of sales growth was consumer intent. Shoppers were visiting sites ready to buy, and SmartEtailing websites converted on those sales reliably.
During the peak of the bike boom the largest independent bike shops using SmartEtailing were selling over $250,000 each week. At the absolute crest, our top performing retailer sold $424,000 online in a single week.
It wasn’t only the largest retailers who posted big gains online. The average bike shop using SmartEtailing saw over 2,000% growth in online sales in May 2020. We measure average via trimmed mean - where we trim the top and bottom 5% from the sample to get a better representation of reality.
By every measure, SmartEtailing was there to back up our clients. Whether it was site speed and sales, faster data exchanges with Ascend, local home delivery, Apple Pay, Google Pay, or online financing - we understood our client needs and made every effort to support them.
To support the supply chain as a whole, we partnered with PeopleforBikes to develop the IBD Ecommerce Index for the Business Intelligence Hub and offer suppliers insights into what was happening in the market and empower them to make good decisions in support of your business.
There should be no doubt in your mind that SmartEtailing is a more than capable partner in supporting the growth of your bike shop - or that we are the ecommerce company best aligned with the interests of bike shops like yours.
3. Bike shops were up for the challenge
Many bike shops using SmartEtailing traditionally found the most valuable aspect of their website was providing consumers visibility into product assortment, availability, and pricing - with the intent of having informed customers visit the physical store to make a purchase.
There has always been a group of retailers who saw the true opportunity of ecommerce in supporting overall business growth - so, therefore, had proactive marketing strategies in place for demand creation. These same retailers also had proven processes to manage orders and provide online customer service.
When the bike boom happened, coinciding with the shift to ecommerce, these seasoned ecommerce sellers were well equipped to manage the increase in online business.
Many other retailers had to act fast, implementing operational changes on the fly while at the same time managing an unprecedented situation for their overall business.
It was truly impressive to see hundreds of retailers take on this new challenge. Online sales skyrocketed - and they embraced the operational changes needed to capitalize on sales.
Underlying this story is the unflappable Client Success team at SmartEtailing. They worked long hours handling a record volume of support requests and new client sign-ups. When clients were stressed out, they could count on a SmartEtailing team that was calm, knowledgeable, and helpful.
One of our company values is “Be a True Partner” - this partnership with our clients during this dramatic time in the bike business put this core value of ours on full display.
4. Ecommerce accelerated 10 years
The 20-year upward trajectory of ecommerce market penetration across the entire retail sector was predictable and unyielding, ascending from less than 1% of total retail sales in 2000 to 12.5% in 2019.
Large physical retailers, of course, worked to match that trajectory to remain competitive over the long term.
Experts now expect that ecommerce will represent 30% of all retail sales by 2030 in part because a few meaningful changes will accelerate the growth of ecommerce.
Grocery sector: Perhaps the biggest driver of ecommerce change is groceries. The way individuals shop for weekly essentials is habit-forming. A wide swath of the population shifted their grocery shopping to online, and they discovered how convenient it is. Once habits are formed, they are unlikely to change.
Automotive sector: Much like bicycle dealers, the traditional auto dealership encourages shoppers to visit the “lot” to view the selection in person and test drive. Previously, the automotive industry used their websites for lead generation - gathering contact information for sales representatives to contact customers. The automotive industry is now rapidly shifting to ecommerce, which will change vehicle buying habits moving forward.
Click and collect: While grocery home delivery also rose, buy online for curbside (or in-store) pickup usage climbed even more. Consumers quickly discovered that they could place a series of orders with local retailers - and with a single shopping trip rapidly complete a circuit around town to conveniently gather their purchases. This dramatically changed the time commitment associated with shopping. For busy people - time is a valuable resource worth saving.
Generational adoption: There has been a misconception that only younger generations were active ecommerce shoppers. That wasn’t true pre-2020, and it certainly isn’t true now. As the public health situation drove a wider swath of older adults to shop online, they learned how convenient and safe it is. It is expected that these shoppers will continue to use ecommerce at higher rates.
5. Now is the time for intentionality
2020 proved to every bike shop using SmartEtailing that their website can produce substantial sales results when demand creation happens organically.
Some bike shops will walk away from 2020 without shifting their long term strategic plans - they will keep to business as usual and acquire online sales passively.
I advocate for a different strategy - an intentional and proactive strategy.
With the success that the bike market is having, paired with the changes to the overall bicycle distribution dynamic, competition will increase.
Business as usual may get reasonable results as demand stays high - but as demand stabilizes then the retailers with the most intentional digital strategy and robust infrastructure will be the likely long-term winners in their local market.
What does intentional mean?
- An ecommerce website
- Data-driven website so consumers have a good experience
- Email marketing program
- Pay per click advertising program
- Procedures for exceptional online customer service
Now is the time to act. Make your preparations in the first quarter, so you can capitalize when demand is high. The habits your business builds now will help ensure a generation of success for your business.
Conclusion
If what I’ve shared here rings true for you - then please work with us to help you set your business on a path for sustainable growth.
For those of you who already work with SmartEtailing - learn from our best practices, sign up for a marketing services package, and leverage our expertise for your outbound marketing.
If you aren’t a SmartEtailing client - request a demo right away. Not only are we the easiest ecommerce option for you, but we are also the most advanced. Our prebuilt cycling catalog, extensive industry-specific integrations, and trained bike shop marketing professionals make us the ideal long term partner for you.
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