Independents are electric
Posted on 6 Apr 2010
The UK cycle industry has been bulging with electric bicycle stories of recent and the specialist retail trade is being battered with sound bites about why we should all go electric.
We are told that the electric bicycle market in Holland is now larger in sales value than the Dutch conventional bike market. We are warned that Halfords has already been brave enough to jump on the bandwagon and that numerous other non-cycle retailers will quickly follow suit. Sustrans has even considered supplying electric bicycles to satisfy the demand of its female members who feel that the UK cycle trade is ignoring the electric sector.
BikeBiz recently published a feature on the range of electric bicycles available, with subsequent announcements that Zyro are introducing BionX, enabling cyclists to convert bicycles into electric assisted bikes and that Shimano will have a range of electric bike components available for 2012 year models.
So, are we all really turning our back on this phenomenal commercial opportunity or is there a little more to the story?
A survey of retail members has identified a number of issues which have limited the involvement of the retail sector to date. Early entrants got their fingers burnt with poor quality product supplied without sufficient warranty back up and support. Marketing was focused at a customer base that was not atypical of the established UK retailer network, without functions to match consumer to retailer. Investment in the supply chain and particularly in retailer education was negligible. All of this played out against the background of high profile legislative wrangling regarding what defined an ‘electric bicycle', adding uncertainty to any retail investment.
Questionable quality, high priced, technical product, without sufficient supplier support was seen as a high commercial risk and naturally turned many retailers off the sector, but clearly things are changing, fast.
Established cycle brands such as Trek, Giant and Raleigh all have electric products on offer and Halfords are introducing electric bicycles to 80 stores, retailing at between £650 and £900, which ActSmart forecasts accounts for a sales budget of between 300k - 500k this spring/summer. However, the understanding of electric bicycles by the trade at large remains limited and is the most important barrier to overcome if we want to capitalise on the electric market.
Although the supply base is still reasonably small it is growing and a focus of the second coming is quality. Whilst the non-cycle businesses will inevitably be tempted to down-sell and turn their back on customer service and repeat business, this is a product category made for the IBD.
A good electric bicycle, one that fulfils its promise to the consumer, is firstly a good bicycle and then one which features a number of electric, technical components that only a specialist retailer will truly invest in understanding and maintaining.
The power of the brand is not yet established in this sector of the market and the retailer who invests in shop floor education, workshop support and the right supplier and product can clearly be king of the supply chain.
BEBA (The British Electric Bicycle Association) has established a code of practice for its supplier members, aimed at assuring quality of product and supply. BEBA has recently undertaken a market and technical review exercise with the Cytech delivery team to incorporate electric bicycles throughout the Cytech technical training programme and create a standalone Cytech Electric Course.
There is an inherent customer bias towards the slightly older, discerning customer market, as there is to the female market, as Sustrans bikebelles demand for product shows. This potential to expand an IBD's customer base further warrants investment in the sector.
This is one sector of the business where "we only service the brands we sell" signs may well have a place in the workshop, if you don't want to be picking up the cost of repairing low tech products sold in corporates and the those less willing to invest in their future. Cycle Finance will also prove to be a valuable sales tool for specialists selling £1000+ products to a wider consumer base.
The most successful retailers will clearly be those who embrace electric bicycles fully and invest in service and support. Choosing your supply partners will be key as they will need to underwrite retail investment in sustained product quality and supply, but the right partnerships will deliver a very lucrative, quality business addition to the specialist retailer offering.
Candidates can register their interest in the Cytech Electric Bicycle course here.
UK Electric Bicycle Market - BEBA Fact File
- UK Electric Bicycle Sales hit an all-time record of over 200,000 units sold in 2009
- The total value of the UK Electric Assisted Bicycle (EAB) market was c£13 million in 2008
- EAB sales for 2009 are forecast to have been c£25 million
- 50% sales growth is forecast by manufacturers in 2010 vs 2009
- Electric bicycle owners cycle 821 miles p.a.on average compared with 123 miles for conventional-bike owners
- E-bikes are legally classified as bicycles, provided that they have motors of 250 watts or less and a top assisted speed not exceeding 15 mph
- There are currently 5 supplier members of BEBA
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