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Best Buy Goes After Budding E-Bike Market

Published May 15, 2009

BY JASON NORMAN

MINNEAPOLIS, MN—Electric bikes will soon be displayed alongside flat-screen TVs, gaming systems and refrigerators as Best Buy adds the budding category to the vast array of products it sells.

“Best Buy will be piloting electric-powered personal transportation products at some of our stores on the West Coast later this spring,” said Paula Baldwin, senior manager for Best Buy public relations.

Currie Technologies, the country’s biggest e-bike distributor, will provide Best Buy with six Izip models ranging in price from $499 to $2,000. The Southern California-based company will also sell two of its electric scooters priced at $299 and $599 through the mass merchant, said Currie president Larry Pizzi.

“There could be a larger rollout as we approach this holiday season,” Pizzi said, adding that the e-bikes will be sold in 20 Best Buy stores.

London-based Ultra Motor, which introduced its A2B electric bike to U.S. dealers at Interbike last year, also will sell some models through Best Buy. Company representatives could not be reached for comment.

“We’re encouraging Best Buy to have diversity [of brands],” Pizzi said. “We hope that many others participate.”

Best Buy is willing to take a chance on new product. Not long ago, the consumer electronics giant set aside an area in its stores to showcase and sell musical instruments.

Pizzi thinks Best Buy sees another opportunity to sell outside the box with e-bikes. “They see specialty retailers not diving in head first,” Pizzi said.

In general, specialty bike dealers have been slow to embrace electric bikes, something e-bike expert Ed Benjamin attributes to their pervasive enthusiast-driven culture.

“Many IBDs have an ‘I don’t need no stinking motor’ culture that has really inhibited them from taking electric seriously,” said Benjamin, managing director of Benjamin Consulting. “My experience is that most consumers do not have this block and embrace powered bikes. On this point, Best Buy would be superior because they are about selling things and making money, rather than a lifestyle or bike culture.

“I see it as part of a cultural problem—asking young men with big thighs to take electric motors as seriously as their over-55 customers do is not a viable idea—partly due to the repeated bad experiences that IBDs have had with electric bikes,” Benjamin added.

Pizzi said that Currie does its largest volume in the mass channel, but that the specialty retailer is important. Currently, the company sells through between 400 and 450 U.S. specialty shops.

“Bike dealers are just not thoroughly embracing the category,” Pizzi said. Perhaps if e-bikes become more mainstream—and having them at Best Buy will help—dealers will have no choice but to “get on the bandwagon,” Pizzi said.

Some IBDs might scoff at Best Buy carrying e-bikes from a service and repair perspective, but Pizzi argues that Best Buy is more than capable of handling any mechanical issues.

“Their Geek Squad knows how to analyze electronics,” said Pizzi, adding that Best Buy can also tap into its resources in the car audio division. “Combining all those resources, they felt like they could handle this category.”

Benjamin said Best Buy will inevitably go through a learning curve.

“Best Buy will have to do a great deal to equip themselves to handle bikes in addition to computers in terms of after-sales service,” Benjamin said. “Best Buy will have a bit of a struggle with test rides. And I suspect their risk management people have not yet woken up to the dangers of selling products that involve kinetic energy, stored energy, traffic and the American consumer.”

Benjamin called e-bikes a “high information product,” where the consumer needs lots of information before making the purchase.

“Typically, mass merchants are not good at this, and are limited to whatever the consumer can read on the outside of the box, or knows already from marketing or maybe the Internet,” Benjamin said.

Despite these potential challenges, Benjamin is impressed that Best Buy is willing to give e-bikes a try.

“It looks like senior management there is taking electric vehicles very seriously, which is good news, and may change the way mass merchants do business in such products,” Benjamin said.

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