VAUDE has stands on three pillars: the strongest – and the foundation of the company – is Outdoor Sports. In recent years, the bike division has developed strongly and is slowly but surely catching up with the outdoor sports division. Packs 'n Bags has suffered a lot from Corona restrictions, as the travel segment is anchored in this division.
The distribution of turnover over several business segments is intended to give the company stability. In Outdoor Sports and Bike Sports, we have been able to achieve significant growth rates in recent years. The Packs 'n Bags segment has stagnated or even declined slightly, but did grow again in 2019.
With 66 percent of sales, apparel is our largest product group. It has grown disproportionately over the last five years and is now significantly above the EU average for apparel in the outdoor market, which was about 51 percent according to EOG data in 2018.
The second largest product group is backpacks and it accounts for 25 percent of our sales. This is also well above the EU average of 8 percent. Backpacks were VAUDE’s first products and are represented in all three market segments in roughly equal proportions. In many countries, VAUDE is still perceived as a backpack brand.
It all began with backpacks. And even today, they are in high demand. Nearly 32 percent of VAUDE backpacks are made in Germany and the share is rising.
Our intention was to reduce dependency on retail sales and to optimize production at our manufacturing facilities by reducing cyclical production with orders that aren't dependent on seasonal sales. This segment was initially promoted quite strongly in German speaking countries. The experiences of the first three years have shown that we have considerable potential in the German-speaking areas. Therefore, we are concentrating on these countries for the time being and will only expand our business to other EU countries sporadically.
The target customers in this area are diverse. They include industrial companies of all sizes, from companies that trade on the Frankfurt Stock Exchange to local southern German craftsmen's businesses. The customer portfolio also includes public authorities, associations and other public institutions.
The product range is correspondingly broad. It contains garments as well as backpacks of all kinds. Tents, sleeping bags and accessories also play a role. The range includes completely new product developments as well as articles from the collection that are adapted to the needs of the customer.
Products manufactured here in Obereisenbach are also very popular. These products include articles made from post-consumer recycled materials such as the discontinued fabric skins of zeppelins from Friedrichshafen.
For this business field, VAUDE also pays close attention to the application of its strict corporate code, which includes regulations regarding which industrial sectors, authorities and organizations in which countries may be supplied (white-list). Our strict ecological requirements for materials and the high social standards for producers apply here just as in the normal product range production process.
These factors are also issues that are very important for our customers and motivate them to buy VAUDE products.
Following Germany, our Objective-1 countries are Switzerland, Austria, the Netherlands and Belgium. In these countries, the sales percentage of product groups is basically the same as the overall averages at VAUDE. Great Britain, also an Objective-1 country, is strongly represented in backpacks and tents. Apparel plays a disproportionately large role here for a variety of reasons. Due to the BREXIT issue, we have downgraded the priority of GB until further notice.
In general, we want to expand our export share, with a strong focus on Europe. This is where we see the biggest growth opportunities and the best profitability of resources used. Outside of Europe, we are concentrating on a few major markets in Asia and North America. VAUDE has grown rapidly both in Germany and in Europe in recent years – double digits over many years. We've also achieved strong growth in many European countries. This allowed an increase in market shares and expansion of sales of VAUDE products. Due to the high level of domestic growth, it has been a special challenge to significantly increase the percentage of exports. So though it has remained constant, the level has been higher.
In Germany, the Netherlands and Switzerland (since July 1, 2020) VAUDE has worked with a team of permanent sales representatives in all 3 market segments and the VAUDE Professional segment. In Austria this concerns the Bike and P&B sectors. A separate sales organization exists in Spain.
In other EU countries, VAUDE works with agencies, while in non-EU countries it works with distributors. The benefits of agencies are obvious: The entire product range in the country can be offered by the central warehouse in Obereisenbach and shipped directly to the customer. The distributors, on the other hand, first buy the goods, then stock them and sell to retailers in each country. This means that the product range is greatly restricted in such countries.
We also generated sales in the following countries last year:
Principality of Liechtenstein
United Arab Emirates
VAUDE is and remains a strong partner of retail business. This also applies to the ever-growing online business at vaude.com. Many qualified dealers, including the VAUDE franchise partners, can apply here for daily customer orders, provided they have the ordered goods in stock. Anything that cannot be delivered in this way comes directly from VAUDE.
In addition, VAUDE operates 18 VAUDE Franchise Stores (status 31.12.2020). These are also retail partners. The franchisor is VAUDE Franchise GmbH, whose second shareholder (in addition to VAUDE) is also a retailer. VAUDE holds the majority of the shareholders’ shares.
The four outlets run by VAUDE are an exception. These stores sell outdated merchandise, sample merchandise, merchandise from leftover fabrics as well as other merchandise stemming from returns from retailers. As such, these outlets are an important part of the VAUDE marketing and service chain. Economical marketing of retail inventories wouldn't be possible without them.
Distribution Channels 2020
Brick-and-mortar specialized stores and multi-channel (incl. vaude.com)
Internet retailers (specialized dealers who earn at least 90% of sales online, including vaude.com)
Retailers – VAUDE Franchise GmbH stores
Retailers – Outlets
All three market segments can be depicted in these structures. The differences between on and offline sales between the market segments are relatively low. A special feature of the Packs ’n Bags segment is that they are strongly marketed in leather goods stores, especially in Germany, although this share is constantly decreasing.
It is worth mentioning that since 2018, business with "sustainability retailers", i.e. retailers who are strongly committed to ecologically and socially fairly produced goods, has risen sharply. These are often retailers who offer a diverse range of products that cannot be attributed solely to sport. We see further growth opportunities here because we serve a clientele that seeks and appreciates VAUDE's values. The sales share of these retailers, however, is only about 1%, but it is growing strongly.
For the Outdoor Sports segment, specialized sports stores play a major role in addition to outdoor recreation stores. In addition, it is clear that there are significant overlaps, especially between the Mountain and Bike segments in terms of sales of the product ranges. This applies to apparel and backpacks.
The international outdoor market continues to be characterized by cut-throat competition and strong concentration processes. This is likely to be exacerbated by the CORONA pandemic. Many small and medium-sized corporate customers have disappeared in the last few years or have been swallowed by larger companies. This is also reflected in VAUDE's customer structure. The absolute number of corporate customers has not increased over the last 5 years – despite strong growth in sales and market share and the emergence of many online customers.
As a result, a relatively small number of corporate customers account for a large proportion of VAUDE sales. Although A-customers represent only about 10 percent of our total customer count, they are responsible for approximately 70 percent of our revenues. This is a general trend in the market. In particular, the percentage of medium-sized corporate customers is decreasing.
In addition, we break down our consumers according to sports/activities (from everyday life to bike sports/outdoor sports):
And also by values/outlooks
We also see large overlaps in our consumer target groups with the members of the German Alpine Association and with LOHAS (Lifestyle of Health and Sustainability).