Bike cameras and accessories company Cycliq (ASX: CYQ) won big in November as a result of its Black Friday ad campaigns, offering 30% off storewide. The Company reported earning $1.2 million in Gross Revenue. At the same time, it saw successful sales of the Cycliq Fly 12 Sport safety camera.
This year’s Black Friday campaigns revealed the importance of Cycliq’s primary product in the cycling market, evident in a significant rise in individual orders (a 29% increase in total order count) and an unaudited Gross Revenue of $1.2 million for November 2023. Plus, there has been a positive shift in consumer perception, reflected in the TrustPilot rating, which has climbed to 4.1/5 stars, a notable improvement from the 2.4 stars recorded in November 2022.
The Cycliq Group, with a market cap of $1.07 million, has noticed a change in consumer spending habits within the cycling industry beyond the November sales month. The average order value (AOV) has declined by 28.3% to $449. Consumers increasingly prioritise essential purchases of its core safety, action, and sports cameras while reducing expenditures on additional accessories like mounting systems and product protection packs.
Cycliq feels that competitor strategies are to blame for this decrease. Retailers like Chain Reaction, Wiggle, Sigma Sports and others have offered unusually steep discounts ranging from 60% to 80% on accessories.
Besides accessories, Cycliq’s core products, like the Fly 12 Sport and Fly 6 cameras—serving as dash cams for biker safety—are not light on the wallet. The Fly 12 costs $485.8, while the Fly 6 amounts to $364. Seeing as the overall average order value is declining, customers might be opting for cheaper alternatives.
Nonetheless, this Black Friday appeared to have levelled the playing field for the time being at least, with about 2,000 new customers entering the Cycliq family this November—the single largest monthly increase in recent years.
Globally, the US saw the highest number of sales (29%), with the UK following closely behind at 23%. Surprisingly, Cycliq’s home base, Australia, saw a sales growth that lagged behind the Rest of the World (22%), amounting to 15%.
In Q1 FY24, Cycliq reported $865,000 in cash receipts from customers, marking a slight 3% decrease compared to the same quarter in 2022, when the Fly 12 Sport was initially launched. The Company’s operating costs amounted to $780,000, reflecting an 85% increase in manufacturing and operational expenditures as it ramped up production in preparation for Black Friday and Cyber Monday. Additionally, Cycliq incurred marketing expenses totalling $153,000 during this period.
In September 2023, the Company received a $244,097 cash refund under the Federal Government’s Research and Development Tax Incentive Scheme. Plus, next year, it is gearing up to launch its new flagship product, “Hero”, which is reaching the end of pre-production testing.
Alinda is a Business Reporter for The Sentiment
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