Raymond Verhelst & Associates

e-Bikes: Converting A Niche Market Into A Recognized Movement

 

There has been a consistent discussion for more than 10 years about the North American electric bike industry and when (or if) it will rise above the fringe market and whether the construction of the business model will grow beyond the initial DIY model.

 

Let’s face it, the US is car centric. People live in suburban communities enjoy their space and driving a few minutes to a shopping center is not inconvenient. By contrast, those living in urban, cityscapes avoid daily use of a car and the associated costs of parking, storage and often increased insurance. The use of a bicycle to get to and from has given hope to the electric bike importing community because one of the key benefits is the ability to ride dressed for business. The power supplement levels the terrain and eliminates and aggressive pedaling to get to the office without becoming dripping wet. The side benefit is that the rider also avoids the typically high parking fees.

 

In the dense urban European cities, the use of bicycles of all types, has been embraced far more by the population. Even in major capitals such as Madrid and Paris, bicycle ride sharing and the adoption of electric bicycles within the commercial delivery segment has grown more quickly. Outside of Asia, power assisted cycling in Europe has taken the clear second place for market size.

 

Another challenge has been the source of manufacturing for the majority of the electric bicycles. Yes, we gave up production-level manufacturing of bikes years ago and transitioned the parts and pieces to Asian producers. This is in part due to the volume of mainland Chinese who use bicycles as their primary means of transportation. At four times the gross population of North America, there’s common sense behind this decision, even for US brands.

 

Much debate within the US bicycle retailer community has taken place and there seems to be two distinct camps making the most noise. The shops that have built a business model around the cycling purist see electric bikes as a means of cheating. Not maximizing the exercise factor or the exclusive human power somehow defines the rider to be less than truthful or on par with those who do.

 

In reality, numerous studies have shown that electric power assist cycles have allowed a larger base of consumers to return to cycling. The various lifetime injuries to knees, hips and other common joints have kept many away from using a bicycle as a means of exercising or just enjoying a recreational ride for any length of time. Many of the same studies also showed that those returning to riding are actually riding longer with the assist level, getting more use from the bikes.

 

Because of this affront to marketing electric bikes through the traditional IBD’s, a new class of retailer has emerged. The independent e-Bike dealer, whose primary goal is to sell exclusively, rechargeable, power assist cycling. These new compact retailers range in format from complete independent shops to licensed brands that fall just short of franchising. Many of the small business owners are former successful executives of business owners who have transitioned into this as a new family business.

 

This commitment does not come without trials and tribulations. Not having the years of bicycling experience in repair, maintenance, and the all-important business model of promoting upgrades and accessories, has kept many from growing successfully. Add in the technical knowledge of electrical drive systems, rechargeable lithium battery packs and advanced chargers, and you have a significant barriers to entry.

 

For many of the retailers in the early years, relying on entrepreneurial importers for consistent inventory, replacement parts and quality technical support made it hard to deliver long term customer service. In many cases wholesale changes in parts suppliers back in China would just appear when the next round of goods would arrive, forcing the retailer to evaluate each shipment as if it was the first time. Because volumes did not meet the necessary business expectations, many of these brands would fold, leaving the store to dance around the customer’s questions.

 

Jumping forward to today, we now have a completely new energy behind the electric bike community and much of the enthusiasm is coming from the technologists based in Europe. New motor systems, improved battery integration and transmissions replacing the traditional gears and derailleurs that take advantage of the increased torque.

 

The bicycle styles have also changed. With the typical beach cruiser and traditional street bike being the dominant style, the new sport and mountain bike direction has made significant changes to the demographics of the rider base. The core age range of the baby-boomer has now expanded to include a much younger audience. Prices have also risen. On par with the elite road and mountain bikes, these new electric assist models are equipped with ultralight frames, advanced brake and suspension systems, exotic materials and drive systems with advanced communications that bring the convenience of your smartphone to the dash.

 

With all of these new advancements and the support of well-known brands like Bosch and Shimano, powering famous bike brands like Trek, Raleigh, and Cannondale, there’s a potential change in the attitude at the traditional bike shop. While the purist in the sales department may fight the intrusion, the owner simply can’t pass up the margins and profitability that comes with a premium product.

A motivator that can sway many over to the “dark side” is when consumer demand start to reach the sales floor in the local bike shop. Each time a potential customer walks in and asks for but can’t find a new generation electric bike, management will notice. To get the level of interest up to a measurable amount requires an industry supported, national demo program that gets consumers to come and experience the ride.

 

Until now, another challenge has been the lack of any professionally organized road show that would bring an independent demo experience into markets where customer demographics match the interest and ability to buy. There have been individual retailer demo days, where manufacturers show up and supplement the inventory for guests but the variety is limited and the experience is often confusing.

 

The new Electric Bike Expo is the very first of its kind in North America. Built on the success of the traveling demo days produced by our associate ExtraEnergy.org throughout Europe. The plan is to create a dynamic, professional environment where multiple brands can showcase their different models, and consumers can test each one on a set course of terrain options that are designed to highlight the capabilities of an electric bike. The long climbing hill demonstrates the torque while the small hills and banks feature the suspension and new wider tires.

 

The idea of the Electric Bike Expo has gained tremendous support from industry leaders of both top manufacturers as well as leading industry associations. Our plan is to build the enthusiasm through entertainment and experience. At the same time, we will capture the consumer’s opinion and feedback about the concept of a power assist electric bike. We will also record their initial perception vs. their new found knowledge as they exit the venue.

 

To further qualify the data, we are incorporating advanced data capture technology that records the rider’s choices, their preferences and allows us to match their tastes against nationally recorded economic demographics, including residential values.

 

To attract consumers, we are taking the crowdfunding philosophy of small amounts from each of the many manufacturing participants and spend it on local paid media campaigns that even a successful local retailer would find it hard to spend for a single weekend event. Combined with a concerted social media effort to reach out to the existing cycling community, the outdoor social activities organizations and commercial businesses that could find value in e-Bikes.

 

Time is relevant. With our partnership with Interbike, North America’s largest B2B show producer for the cycling industry, we plan to launch this annually through 2018. This long term goal will allow us to set measurable objectives, implement feedback from our supporters and grow the schedule to include a larger swath of the country.

 

The country is large and the pockets of cycling enthusiasts who embrace electric bikes are spread from coast to coast. This effort will go where manufacturers see interest and potential for expanding their dealer networks. Each season, we hope to double the number of destinations and carry our road show to exciting communities who are anxious to experience the excitement of electric bikes.

 

The consortium of leading experts that make up the ownership of Extra Energy Services North America, all have extensive years of experience in marketing, communications and successful operation management of events. Many also have extensive engineering and product development experience in the electric bike and light electric vehicle markets. From specific drive and rechargeable pack engineering to government legislative involvement to forward the acceptance of these bikes onto the wider network of trails and paths.

 

For Raymond Verhelst & Associates, this new corporation allows us to blend in many of our capabilities into this one important project. From our design capabilities to build the track designs for both the indoor program for Interbike as well as the outdoor venues. We have the resources to engineer all of the exhibit systems, secure the event supply vendors for everything from the specialized floor covering to the new guard rails, and design the UI for the customer experience system. Our team of top industry event management executives have the skills to deliver the proper marketing platforms and objectives for the e-Bike manufacturers and distributors.

 

From a higher elevation, the new Extra Energy Services North America, Inc. has an agenda to become a driving force behind the education of consumers about the features, benefits and safe use of legitimate electric bicycles throughout North America. We hope to be the conduit between industry trade associations who concentrate on the manufacturing and supply chain side and the retail consumer, who is the ultimate end user.