ELECTRIC BIKE SALES BOOM, BUT BIKE DEALERS STILL WORRY


SILVERDALE, Wash—IBDs enter the e-bike market with distinct advantages over other channels: consumers instinctively expect to find e-bikes in bike shops, the shops have service departments already skilled with the bikes’ non-electric parts, they know how to fit riders to their bikes, and they have relationships with the major bike brands now offering e-bikes.

But the channel remains nervous.

An array of statistics show explosive e-bike sales growth in the IBD market. For example, wholesale sales of the bikes were up 79 percent last year in the U.S., and the bikes’ high average selling price helped bolster revenues in a year when the number of bikes sold declined 10 percent. But the still immature market segment could evolve in ways that don’t favor traditional bike shops.

Enormous companies from the automotive and motorcycle world are entering the market — in the U.S., GM and Harley Davidson are just the first — and are likely to sell through their existing dealerships.

Consumer-direct e-commerce brands promise lower prices and convenience favored by modern consumers. E-bike and e-scooter share programs threaten to overshadow retail sales. The industry took note, for example, when Uber’s Lime division began importing thousands of e-bikes this winter.

In the enthusiast market, some note with alarm that companies like Harley-Davidson and Cake are offering light electric offroad bikes that don’t bother with human power: will electric bikes with pegs, but not pedals, pull sales away from the e-MTB?

Some IBDs remember being burned by earlier generations of unreliable e-bikes, while others fear that traditional IBD suppliers are on the wrong track pushing e-bikes that sell for $3,000 and more, opening the door for other channels offering e-bikes for half that.

E-bikes, like other tech products, are becoming better values with each new generation and at least one analyst worries that if the growth rate softens, the industry and retailers could be stuck with showrooms full of the equivalent of last year’s laptops — lesser products at the same or higher price tag.

In a January report on retail bike sales, an NPD Group analyst noted that while e-bike sales were continuing to grow, the growth rate was softening, “indicating the early stages of market saturation.”

Finally, e-bike only retailers and suppliers appear to be outperforming IBDs and their traditional suppliers in the e-nbike market.

Ed Benjamin, CEO of the International Light Electric Vehicle Association, noted that two of the fastest growing brands in the U.S. e-bike world, Pedego and Seattle-area supplier Rad Power Bikes, have one thing in common: focus.

“What do we know about them,” asked Benjamin? “They’re focused on electric bikes. They’re focused on electric bikes. And by the way, they’re focused on electric bikes.”

“The bottom line is focus. You can do a little research and find out that where one IBD bike shop may sell four or five e-bikes in a year, an established e-bike shop is selling a couple hundred. It’s not rocket science. Focus is everything.”

But Benjamin remains bullish on e-bike sales through IBDs.

“It’s important to understand the shifting trends in the bike industry, like the mountain bike craze or the 10-speed boom in the 70s. During the peak of those trends we saw a wide range of retailers jumped on the train — department stores, drugstores, toy stores, and hardware stores. The same is happening right now. It’s a bit like the Oklahoma Land Rush—ebikes are now lining the sales floors of garden and tractor supply stores, Costco warehouses, sporting goods stores, even RV and boat dealerships. It will settle down, and in time only reliable, solid dealers will remain.”

“The truth about established IBDs is that they generally have an advantage over their new-to-the-scene ebike retail counterparts. They’ve got the bicycle tools, bicycle parts, they know how to fix bikes. A good 90% of electric bike problems are bike problems. Yet, it’s not uncommon to see an ebike mechanic who knows how to swap out a defective controller but has no clue how to true a wheel.

“The only thing that’s keeping IBD bike mechanics from servicing electric bikes is fear.”

Even Pedego, which sells through more than 100 licensed Pedego-only stores, is seeing growth potential in the traditional IBDs. The company launched a trial program this winter to explore opening Pedego “store-within-store” in bike shops.

Retailers like David Brumsickle, who opened Silverdale Cyclery in Washington in 1985, are finding their way into the e-bike market after years of watching the category develop.

Brumsickle sees e-bikes as a solution to slow growth in the enthusiast market his store has served for decades, but he’s been careful about taking the right approach.

“We started exploring e-bikes 10 years ago,” he said. “The first ones were either very expensive or very unreliable. But In the last couple of years e-bikes began to be standardized … motors, batteries and controllers. But the price points were still above peoples’ tolerance here locally.”

Brumsickle eventually settled on offering e-bikes in the $1,500- $2,500 range that fit his customers’ needs.

“It’s a bit early,” says Brumsickle, “but we’re ready for the selling season. It’s definitely our year to go electric with some great products I know our customers are going to buy. It’s time.”

This article written by Phil Herzog for Bicycle Retailer and Industry News Magazine.

Winning The Pitch…Without Pitching

Part 1–Introduction

At the height of the frantic, money-grubbing dotcom era, Seattle’s business landscape was littered with tech start-ups and fat digital marketing budgets lining every street from Seattle to Bellevue to Blaine. Venture funding was flowing like freshly corked bottles of Dom Perignon. It was a heavenly moment for entrepreneurs and opportunists. For me and the ad agency pitch teams who chased after them with abandon it was a four star meal ticket to cash in on the region’s new-found prosperity. Or so we all thought.

On January 21, 2001 I uprooted my family from the piney woods of East Texas to stake my claim of fame and fortune in Seattle’s pot of digital marketing gold. I had a heart full of optimism, a head full of modestly successful marketing campaigns and a 20-year resume documenting my experience as the head of business development for Los Angeles and Dallas ad agencies and design firms. I had fire in my belly, fully convinced that hunting for plum new advertising accounts in the emerald green pastures of industry titans like Boeing, Microsoft, Starbucks and Amazon meant one thing. Big bucks.

And it was…until it wasn’t.

As many of us painfully discovered–in the irrefutable trends of macro-economics–what goes up must come down. The dotcom go-go era eventually slowed to a trickle, then bottomed out in 2001—not so fortuitously at the same time I left the comforts of East Texas to assume the reigns of new business for Seattle’s Horton-Lantz-Low marketing agency (arguably the largest and most innovative independent agency in Seattle at the time which unofficially merged with Ascentium in 2010).

Despite the downturn, for me it was a time of enormous challenge, growth and modest success. I learned to pitch business from the very best, in a team environment, competing for some of the richest and most storied advertising and design accounts on the planet—Patagonia, Shimano, Princess Cruises, Phillips Electronics, Microsoft, etc.

Though I brought to HL2 a solid background in account strategy and copywriting, I was hired for one reason: to get in front of prospects. And I did so, with dutiful enthusiasm as the sort of “tip of the spear” big game hunter for the firm.

What I learned could fill a book (which may happen one day). But for the purpose of this blog series I’ll lay the foundation for my learnings and pitch strategy by borrowing the simple but profoundly effective proprietary sales process model from my sales mentor and forever friend, the late Roy Chitwood. In his Max Sacks “Track Selling” training program (www.maxsacks.com – I wrote most of the copy and produced the website) Roy defines the track selling process as follows…

Approach  >  Qualification  >  Agreement of Need  > Sell the company  >  Fill the need  >  Act of commitment  >  Cement the sale

With this groundwork of a brief introduction and sales model laid, we’ll talk next week about that critical first step in the sales process that I’ve discovered, time and again, which separates the men from the boys—the Approach Stage.

Check in next week for Be first, be fast, be fabulous—Part 2

(photo credit courtesy of John Hamm, post Mad Men)