Retail finance plays key role in strong sales for bike retailers

The Association of Cycle Traders (ACT) has reported an increase in both new and returning customers in December 2020 among IBDs, in comparison to 2019.

The survey was part of an IRC initiative, where retail feedback is collected by a number of trade organisations for Government lobbying to the benefit of members. Figures also showed that November was a stronger sales month than December for the IBD.

“The year of 2020 was a challenging year for the retail sector as a whole, but for bike retailers, in particular, it meant a rise in demand never seen before, leading to booming sales and stock shortages,” said the ACT. “Seasonal cycling trends were thrown into disarray as the COVID-19 disruption impacted consumer buying habits. Most unusually, figures show that November was a stronger sales month than December for the IBD.”

Credit card volumes in the cycle sector were reportedly 19% higher in November than December, helped by a 10% increase in the average transaction value, a 25% reverse on the 2019 trend, the association found. Retail finance sales remained ‘buoyant’ throughout the period, reflecting an increasing consumer trend to spread the cost of larger value purchases.

November’s 2020 vs 2019 retail finance sales showed the highest growth since May 2020, and preliminary January figures suggest an increase in retail finance sales of 47% between Jan 2020 and Jan 2021. Online finance sales also saw a bigger increase than instore, due to trading limitations arising from shops closing or reducing their product and service offerings.

“UK retail as a whole recognises how the pandemic has accelerated online trading for the longer term; finance offered through a shop’s website has become the expected norm among consumers,” added the ACT.

“The increased popularity of bicycles in the last year combined with ongoing stock issues has driven finance to become yet more of a necessity as entry-level bicycle models have all sold out, leading retailers to upsell to better quality models with higher price points. Here, retail finance proves to be invaluable in allowing consumers to purchase at price points that might otherwise have lost the sale.”

Read the January issue of BikeBiz below:

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