Business Environment and Market
More and more people want to live active lives, which is driving the market forward
Thule is operating in a market with clear underlying growth – interest in sports and outdoor pursuits is increasing over time, throughout the world. At the same time, in the shorter perspective, the market is suffering from inflation and global uncertainties that affect consumer behavior and retailers alike.
Five macrotrends that are impacting Thule Group
1. Appeal of physical activities outdoors
People around the world are increasingly attracted to physical outdoor activities, often with friends and family, and more time and money is being spent in pursuit of such experiences. This is true for ski trips with the family, bike rides with a sleeping child in the bike trailer, and extreme mountain bike trips with your best friends.
2. Brands connected to lifestyle create loyalty
Brands that are used in connection with positive feelings are strengthened, which makes it easier to build consumer loyalty, sales growth and healthy profitability. Lifestyle brands that aim to be more than just a product and deliberately work to create a stronger connection to their consumers have greater possibilities of being long-term winners. The Thule brand is global and strong, and has an extensive history, with generations of users creating a relationship with the brand and our products.
3. Focus on sustainability
Consumer expectations have become much more demanding to meet in terms of corporate sustainability, transparency, respect for human rights, product quality and customer service. With Thule Group’s ambitious sustainability work, this means opportunities, and we work tirelessly to design increasingly sustainable products with high quality and life span. At the same time, we as a company want to increase the visibility of the work we do.
4. Standing out in the crowd
Today’s consumers are inundated with information and messages through ever more channels and from ever more players. New shopping patterns and new ways of interacting with the consumer, through both digital and physical channels, have emerged in recent years. It is crucial for retailers to create value in order to avoid being considered an unnecessary middleman between brands and consumers.
For Thule Group, visibility and service level are key components for success. We work cost-efficiently by collaborating with the best retailers in each product category in each individual market. We are also aware that although many consumers truly appreciate our leading products, few know about our full range. Consequently, we have stepped up our efforts to improve our visibility to consumers through, for example, a greater focus on events, PR and direct-to consumer (DTC) sales. DTC is a way to reach out with the full range of our product portfolio and to find new consumers who prefer to shop online.
5. Global uncertainty
In the past few years, the world economy has been marked by catastrophic events such as the coronavirus pandemic, Russia’s invasion of Ukraine and the war in Israel/Gaza. This has resulted in greater economic uncertainties in the market. Inflation rates have been higher than usual, as have interest rates. In the past few years, we have also seen increasing protectionism and new trade barriers throughout the world.
In late 2023, we noted two clear positive and two negative developments in market trends. On the positive side, European markets generally performed well, and bike-related products have – within Thule’s premium segment – resumed growth. On the negative side, we noted that North American consumers are less interested in shopping than European consumers, at least within the sports and outdoor industry. Several players have faced some extremely challenging years, resulting in restructuring and in some cases, bankruptcy. Furthermore, the RV and camper van sector (which impacts Thule Group’s “RV Products” product category) is now in the midst of a weaker cyclical phase. This industry is Thule Group’s only exposure to a historically cyclical segment.