BMC and Stromer...

[Brambor]

BAM!

Also known as the only folks that actually know how good the bikes are.

 

[GW Shark]

This community is best served with the strength of sharing opinions and respecting that of others. If someone has a bias, it is no surprise that they probably own the bike, right!?

The strength in the product is its utility for the end user, and none of us are exact here regarding expectations and usage. Taking capital and putting it towards what you believe in, whether it be buying a bike or buying an equity ownership in a small company or buying stock in a public company gives you skin in the game. When you have skin in the game you are naturally biased and that is a given, but by no means does it tarnish ones validity. We call it putting your money where your mouth is and for most this will lead to your opinion , whether good or bad and I have had pro's and con's shared with people with ownership to gain true knowledge.

You have traded capital for ownership , just as you have traded time to earn the capital. You know how much capital you have, yet no clue as to your time left. Think about that over a cold beverage.

The strength of EBR comes from the intelligent, knowledgable and respectful strength of the community and this forum is filled with very quality individuals that will even take personal calls and conversations to answer questions.

Also anyone that has dealt with dealers in the community such as Crazy Lenny acknowledges that without the strength and support of your dealer, you have nothing and I am grateful for what this dealer brings to the community regarding knowledge, competition, and care for the end user.
It gets down to respect and common good will of your fellow ebiker.

Off my soap box now...

 

[Cameron Newland]

Let's not be too harsh on Stromer. I am sure they are hitting anticipated targets in certain regions, but their limited offerings and high price points, will, most likely, not produce the North American numbers necessary for profitable growth. BMC has a heritage of producing very high quality products and its easy to see that Stromer is striving for design and performance excellence rather than unit sales. My recommendation to Stromer is to focus on those territories that are e-bike mature and where bikes serve as primary transportation. Stromer does not have an adequate value proposition for North America. Perhaps in the next 5-10 years that will change. The news article makes it perfectly clear that Rhys does not want to sink a lot of money into Stromer and is willing to partner or sell. You can politic the response all you want but whenever a CEO seeks partnership or sale it is because financials are NOT working. Not working can mean many things including loss, insufficient return on the dollar, or a growth curve that is insufficient to satisfy shareholders. It could also be that BMC wants to focus its dollars in another direction. Stromer is a tough sell to the bike industry as they are niche products in an immature market. Perhaps an investor outside of the bike industry would take a chance but it does not seem plausible that Accel or Derby or Giant or Specialized or Trek would take them on. IMHO

I get your point re: North America not being a mature ebike market and I mostly agree with you, but there are a few places where I've seen quite a few Stromers on the streets. Places like San Francisco, Silicon Valley, Washington, D.C., and New York City might qualify as mature ebike cities. I went to New Wheel in San Francisco last weekend and they seem to have been selling quite a few Stromers. One chap brought his ST2 in for service while I was visiting the shop.

 

[Deleted member 803]

I get your point re: North America not being a mature ebike market and I mostly agree with you, but there are a few places where I've seen quite a few Stromers on the streets. Places like San Francisco, Silicon Valley, Washington, D.C., and New York City might qualify as mature ebike cities. I went to New Wheel in San Francisco last weekend and they seem to have been selling quite a few Stromers. One chap brought his ST2 in for service while I was visiting the shop.

I'll go so far as to say the North American market is so small that, on the sale maturity curve, it has barely left the starting gate. I reiterate, for the umpteenth time that IBD/EBD retail is not the way to sell e-bikes in this country.

From Insg research:

"Growth of the Market by Country In recent years electric cars have received a great deal of press coverage, but globally electric bicycles outsell electric cars by a wide margin. About 112,000 electric cars were sold worldwide in 2013. By comparison something in the region of 40 million e-bicycles were sold worldwide in 2013. In China, there are more electric bikes than cars on the road. The global pattern for sales of e-bikes in 2013 has China in first place, at about 32 million, followed by Europe at 1.8 million, and Japan at 440,000. The U.S. had sales of an estimated 185,000 e-bikes. "

http://www.insg.org

 

[Brambor]

What is the way to sell e-bikes in this country?

I'll go so far as to say the North American market is so small that, on the sale maturity curve, it has barely left the starting gate. I reiterate, for the umpteenth time that IBD/EBD retail is not the way to sell e-bikes in this country.

From Insg research:

"Growth of the Market by Country In recent years electric cars have received a great deal of press coverage, but globally electric bicycles outsell electric cars by a wide margin. About 112,000 electric cars were sold worldwide in 2013. By comparison something in the region of 40 million e-bicycles were sold worldwide in 2013. In China, there are more electric bikes than cars on the road. The global pattern for sales of e-bikes in 2013 has China in first place, at about 32 million, followed by Europe at 1.8 million, and Japan at 440,000. The U.S. had sales of an estimated 185,000 e-bikes. "

http://www.insg.org/\docs\INSG_Insight_23_Global_Ebike_Market.pdf

 

[Cameron Newland]

I'll go so far as to say the North American market is so small that, on the sale maturity curve, it has barely left the starting gate. I reiterate, for the umpteenth time that IBD/EBD retail is not the way to sell e-bikes in this country.

From Insg research:

"Growth of the Market by Country In recent years electric cars have received a great deal of press coverage, but globally electric bicycles outsell electric cars by a wide margin. About 112,000 electric cars were sold worldwide in 2013. By comparison something in the region of 40 million e-bicycles were sold worldwide in 2013. In China, there are more electric bikes than cars on the road. The global pattern for sales of e-bikes in 2013 has China in first place, at about 32 million, followed by Europe at 1.8 million, and Japan at 440,000. The U.S. had sales of an estimated 185,000 e-bikes. "

http://www.insg.org/\docs\INSG_Insight_23_Global_Ebike_Market.pdf

The industry is selling 200,000-250,000 ebikes per year in the US, and the annual growth rate is ~15%. The US ebike market is more than half the size of Germany's! That's huge! Now, considering that Germany has a lower population, this does mean that the US is doing significantly less ebike sales per capita than Germany is doing, however, I don't think that's such an important detail, since compared to China, every country has terribly low ebike sales (Germany included).

IBD/EBD as a sales channel seems to be doing quite well in the US. It's complimented by the online sales and the crowdfunded channels that are growing, but having a variety of differentiated channels will help the industry grow. There's no one 'silver bullet' that will instantly cause US ebike sales to double YoY.

 

[bluecat]

...
myStromer AG now needs the next step: become bigger. For this, they are looking out for new money - or let's say venture capital. Thats it.
...

Where could this money come from? Maybe from a private equity company. (Remember: The major swiss competitor Biketec AG runs with money from Ernst Göhner Stiftung.) Or from another company which is already in this business? Let's think about Fairly!

Swiss alpine ski manufacturer Stöckli AG entered the market with the E.T. with the Go Swiss Drive hub motor. You know this bike under the brand name eflow. This bike is manufactured at Fairly Bike Manufacturing Company. The same company, which also made the Stromer.

Switzerland is a small country. For reaching your competitors HQ, a ST2 ride is enough...

 

[Deleted member 803]

What is the way to sell e-bikes in this country?

This is not a short response.

In classic marketing 101 you need a problem, a solution, a value proposition, and motivation in order to create sales. None of these criteria exists for the populace at large with regards to e-bikes. So!!! How do you overcome this.

The strategy that is typically applied is to tell the customer that they have a problem (any definition of problem i.e. meaning the current state of being is dissatisfactory) and then get them to experience the solution. In all the years of sophisticated approaches to marketing nothing works better than experiential behavior. In lay terms, until you outline the problem over and over again, and get them to experience the solution, you will never create a sale in a nascent market. So, how do you do this.

a. You proactively take the problem and the solution to the customer (retail is reactive and waits for someone to walk in the door).
b. You get the customer to experience the solution for themselves.
c. You give them social and politic support for their purchase

In practical terms:

a. You call every health and wellness manager at every company you can and tell them that you have a solution that helps them accomplish their employee health and wellness goals.
b. You meet the health and wellness manager at their location and present them with a 10 minute presentation on e-bikes as a legitimate source of transportation for work commuting.
c. You get the manager to put a helmet on and take an e-bike for a ride around the parking lot.

Pending you motivate the manager to take the next step:

d. You put a bike on site (cafeteria or lunch room is preferred), e-mail blast the employees to tell them that -bike demos will be available in the parking lot for the week (2-3 days).

e. You park 4-6 e-bikes in the parking lots and conduct demo rides all day long

f. You offer the company and its employees two monetary incentives; 1.a fleet discount program for campus bikes, 2. a matching money incentive for companies to offer individual employees. i.e. If the company donates X to the purchase of an e-bike, the selling agent will match it.

g. Bikes are ordered and paid for by the company and/or employees thru an intranet site that lists the offerings, prices, accessories et. al.

h. Bikes are then shipped (in the box) directly to the company. Upon arrival a mobile tech sets up the bike and hand carries it to the employee.

Beyond the corporate sale, deploy kiosks at ferry landings, tube stops, local events, and anywhere there is a mass of people offering demo rides. In addition, call on local municipalities and deploy the same demo strategy to police offices and other government agencies (postal) as available.

The methods described above are based on a simple premise: If you can get someone to experience your product, your chance of sale will increase dramatically.

The downside to this strategy for the retailer is that there will be hundreds/thousands of e-bikes in the community.....and the retailer will have to suffer through the dramatic increase in attention and store traffic this will generate. When Apple decided to open its own retail stores, big box vendors complained big time. The next result is that Apple products at independent retailers skyrocketed.

Have I explained enough???

 

[stevenast]

The classic "Procter and Gamble" model of marketing is simple: find a need and fill it.

The most successful marketing follows that guideline. They don't try to fit a square peg into a round hole. First they define a square hole before making the square peg.

That could be one of the issues with e-bikes in the United States; what is the need they're trying to fill? Commuting by bicycle, where practical, seems like the most likely answer.

 

[Brambor]

Yeah. Good Job! Did you say Tube Stops?

This is not a short response.

In classic marketing 101 you need a problem, a solution, a value proposition, and motivation in order to create sales. None of these criteria exists for the populace at large with regards to e-bikes. So!!! How do you overcome this.

The strategy that is typically applied is to tell the customer that they have a problem (any definition of problem i.e. meaning the current state of being is dissatisfactory) and then get them to experience the solution. In all the years of sophisticated approaches to marketing nothing works better than experiential behavior. In lay terms, until you outline the problem over and over again, and get them to experience the solution, you will never create a sale in a nascent market. So, how do you do this.

a. You proactively take the problem and the solution to the customer (retail is reactive and waits for someone to walk in the door).
b. You get the customer to experience the solution for themselves.
c. You give them social and politic support for their purchase

In practical terms:

a. You call every health and wellness manager at every company you can and tell them that you have a solution that helps them accomplish their employee health and wellness goals.
b. You meet the health and wellness manager at their location and present them with a 10 minute presentation on e-bikes as a legitimate source of transportation for work commuting.
c. You get the manager to put a helmet on and take an e-bike for a ride around the parking lot.

Pending you motivate the manager to take the next step:

d. You put a bike on site (cafeteria or lunch room is preferred), e-mail blast the employees to tell them that -bike demos will be available in the parking lot for the week (2-3 days).

e. You park 4-6 e-bikes in the parking lots and conduct demo rides all day long

f. You offer the company and its employees two monetary incentives; 1.a fleet discount program for campus bikes, 2. a matching money incentive for companies to offer individual employees. i.e. If the company donates X to the purchase of an e-bike, the selling agent will match it.

g. Bikes are ordered and paid for by the company and/or employees thru an intranet site that lists the offerings, prices, accessories et. al.

h. Bikes are then shipped (in the box) directly to the company. Upon arrival a mobile tech sets up the bike and hand carries it to the employee.

Beyond the corporate sale, deploy kiosks at ferry landings, tube stops, local events, and anywhere there is a mass of people offering demo rides. In addition, call on local municipalities and deploy the same demo strategy to police offices and other government agencies (postal) as available.

The methods described above are based on a simple premise: If you can get someone to experience your product, your chance of sale will increase dramatically.

The downside to this strategy for the retailer is that there will be hundreds/thousands of e-bikes in the community.....and the retailer will have to suffer through the dramatic increase in attention and store traffic this will generate. When Apple decided to open its own retail stores, big box vendors complained big time. The next result is that Apple products at independent retailers skyrocketed.

Have I explained enough???

 

[bluecat]

Have I explained enough???

You did it very well, thanks.

It sounds familiar, like the "corporate solutions" concept from myStromer AG. But I believe increasing the sales force/activities is the second step. First, you have to build a robust after sales service organisation - and you must be able to fulfill the demand in a reasonable timeframe. Unfortunately, Andy Rhis won't spend money for this. So, myStromer AG has to learn walk alone...

Other thing:

The typical european Stromer customer is...

• 45 years old
• has higher education
• has higher salary
• lives in urban/suburban
• has already a bicycle in use
• is is sporty and healthy
• has a sense for excellent industrial design
• likes to own high valuable objects

and use the Stromer either to commute of for leisure.

How would you describe the typical US Stromer customer?

 

[Deleted member 803]

You did it very well, thanks.

It sounds familiar, like the "corporate solutions" concept from myStromer AG. But I believe increasing the sales force/activities is the second step. First, you have to build a robust after sales service organisation - and you must be able to fulfill the demand in a reasonable timeframe. Unfortunately, Andy Rhis won't spend money for this. So, myStromer AG has to learn walk alone...

Other thing:

The typical european Stromer customer is...

• 45 years old
• has higher education
• has higher salary
• lives in urban/suburban
• has already a bicycle in use
• is is sporty and healthy
• has a sense for excellent industrial design
• likes to own high valuable objects

and use the Stromer either to commute of for leisure.

How would you describe the typical US Stromer customer?

Not sure I can answer this. I have no statistics. What I will say is that, for e-bikes to have sufficient grow, they must be sold to non-bikers whose primary interest is an alternative to the automobile for short range commuting. If you can argue successfully for e-bike commuting, the cost of an e-bike becomes a significant value proposition. If someone purchases an e-bike for recreational or exercise purposes, the bike will be perceived as an expensive purchase.

 

[Deleted member 803]

The industry is selling 200,000-250,000 ebikes per year in the US, and the annual growth rate is ~15%. The US ebike market is more than half the size of Germany's! That's huge! Now, considering that Germany has a lower population, this does mean that the US is doing significantly less ebike sales per capita than Germany is doing, however, I don't think that's such an important detail, since compared to China, every country has terribly low ebike sales (Germany included).

IBD/EBD as a sales channel seems to be doing quite well in the US. It's complimented by the online sales and the crowdfunded channels that are growing, but having a variety of differentiated channels will help the industry grow. There's no one 'silver bullet' that will instantly cause US ebike sales to double YoY.

How do you define "doing quite well." Most industry folks confuse distribution with sell-thru. I'm not talking about instantly doubling e-bike sales. I'm talking about increasing ebikes sales 100X. E-bike sales currently are for early adopters and bike enthusiasts. This is a tiny subset of the market I believe can benefit from an e-bike.

I had an opportunity to talk to one of the largest bike dealers (many locations) in the SF Bay area that carries Specialized and Stromer. They were thrilled that they were moving 2-5 bikes a week. I couldn't help but laugh.

 

[Cameron Newland]

How do you define "doing quite well." Most industry folks confuse distribution with sell-thru. I'm not talking about instantly doubling e-bike sales. I'm talking about increasing ebikes sales 100X. E-bike sales currently are for early adopters and bike enthusiasts. This is a tiny subset of the market I believe can benefit from an e-bike.

I had an opportunity to talk to one of the largest bike dealers (many locations) in the SF Bay area that carries Specialized and Stromer. They were thrilled that they were moving 2-5 bikes a week. I couldn't help but laugh.

How do I define 'doing quite well'? I guess that I mean that ebike sales have not only sustained themselves, but have even shown volume/revenue growth. We're talking about doubling US volume and sales every 5-7 years. If we keep on seeing this kind of growth in ebike sales, I think that bike retailers and repair shops will see their revenues rise and will consequently be able to expand/scale up. I think that 5 years from now, you'll be able to walk into a Performance Bike location and choose from a selection of quality ebikes priced from $1,500-$6,000. That's not the case today. At most bike shops, if they carry any ebikes at all, they're hiding them at the end of the rack. There's no prime placement or promotion. That's changing. Now we've got Specialized selling quality ebikes in the US, now Trek is seriously entering the market with their Powerfly+ model(s), we've got established, quality players in IZIP and Easy Motion, we've got new products and new technologies being introduced. I don't see how the current market situation wouldn't be described as favorable.

The 100X increase in bike/ebike sales that you seek won't happen overnight, and I doubt it will have only one principal driver. Incremental growth is what we're seeing, and it's here to stay, and I think we're all happy to see growth in this industry, no matter if we think it should be growing faster. There are so many factors at work, and only some will move in the right direction going forward so as to move the needle on ebike sales. Some factors will be stubbornly unresponsive. An example of this is bicycle infrastructure. Poor bicycle infrastructure limits the usefulness and safety of ebikes, yet improving bicycle infrastructure takes time, money, and activist effort. We won't see the kind of per-capita ebike sales in the US until bicycle infrastructure here matches the bicycle infrastructure in places with much higher bicycle use (Amsterdam, Copenhagen, etc). Bicycle infrastructure will slowly improve as the numbers of cyclists on our roads increase. The trends indicate that cycling trips will continue to increase, and that this will drive the improvement of bicycle infrastructure, albeit slowly. Ebike sales and distribution is slowly improving, too, but it's currently a very immature market. Diversifying sales channels and business models might serve to offer more options to consumers, but I doubt that there will be one magic advancement that will increase ebike sales 100X. I do agree that the cost savings proposition of ebike commuting vs. car commuting is extremely compelling, however, it's not necessarily feasible to offer that to people with commutes longer than, say, 15 miles each way (due to ebike range limitations), nor is it feasible to offer up year-round ebike commuting as a replacement for car commuting in climates with lots of snow/ice/rain. I really do like your suggestion for an explosion of ebike sales via getting commuters to adopt ebikes, and by having employers cover some or all of the costs. I think we're going to see that play out on a small scale soon. For example, Karmic has sold some of its first run of Koben ebikes to companies in SF who want to offer bikes for their employees to use. They may be setting an example that other companies follow.

I can't wait to see this industry continue to grow!

 

[George S.]

Accel has a billion in $$ revenues, but only 40% is ebikes. Parts eat another chunk. Only about 15% is North America. A 'large' US company might be Prodeco with $5 million in revenues.

I think BH is roughly 20% of Accel, with a fitness division that is substantial. Accel does not make much on that billion dollars, as a final profit. It's a bit odd.

Since we sort of go along with 'free trade' I don't see why the Chinese don't win with orders on AliExpress? They have the 'industry'.

 

[NCBlueridge]

Would love to see Currie buy the name/brand at what is probably a very good price given their losses.

 

[GW Shark]

When you look out at the forum, no other manufacturer other than Specialized compares relative to the number of posts, threads etc than Stromer, relative to the number of bike offerings on the market. With all that concern for a brand it is highly improbable that it can just "go away". The owner will cut his losses and someone else will pick up on managing and running the company.

I sure would like to see worldwide marketshare in monetary and unit sales for the given manufacturers and by brand. If the number of posts and following on our forum is any indication of true ownership of the product, then you would think that a hitter such as Specialized would scoop them up and have a "tank like" offering.

Are there not any market share statistics in any of the bike retailer rags other than total number of units sold in a given year? To get the aggregate you have to have the individual sales right? It would be great to see a link to this information.

 

[Deleted member 803]

When you look out at the forum, no other manufacturer other than Specialized compares relative to the number of posts, threads etc than Stromer, relative to the number of bike offerings on the market. With all that concern for a brand it is highly improbable that it can just "go away". The owner will cut his losses and someone else will pick up on managing and running the company.

I sure would like to see worldwide marketshare in monetary and unit sales for the given manufacturers and by brand. If the number of posts and following on our forum is any indication of true ownership of the product, then you would think that a hitter such as Specialized would scoop them up and have a "tank like" offering.

Are there not any market share statistics in any of the bike retailer rags other than total number of units sold in a given year? To get the aggregate you have to have the individual sales right? It would be great to see a link to this information.

If you look at the size of this forum, you will note that it is very very tiny. Probably not a good measure of market characteristics.

 

[GW Shark]

If you look at the size of this forum, you will note that it is very very tiny. Probably not a good measure of market characteristics.

Agree that it takes a great amount of projecting from this small sample but the point is there is a demand and if this small forum does typify mainstream then someone else will make a run at it and give it life. A hope, a prayer, who knows. I still would like to see market share, that is the missing link and the rest is rhetoric. It takes share at some point.

 

[stevenast]

Are there not any market share statistics in any of the bike retailer rags other than total number of units sold in a given year? To get the aggregate you have to have the individual sales right? It would be great to see a link to this information.

Yes, it would be quite interesting to get industry sales figures. I created a thread about that a week or so ago (for all brands) and apparently the information is not readily available. Even percentages would be cool to have...

...if anyone has inside information to post?