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Best Buy Opens Up About E-Bikes

Published September 17, 2010

BY MATT WIEBE

Battery powered electric hub motor hit his mailbox the last day of December in 1895. Since then suppliers and retailers have had little success getting consumers to buy into them in the U.S. market.

The entry into the category by Best Buy last year was heralded as perhaps a move that would reverse 115 years of consumer indifference. The consumer electronics powerhouse opened a light electric vehicle (LEV) department at 20 stores, mostly in California and Oregon last summer to sell electric motorcycles and scooters in addition to bikes. Four of the company’s UK stores also sell LEVs.

“Our venture into the LEV market is an experiment, to see if it is something our customers want. We chose a phased in approach to learn the business. We didn’t want to approach it saying the LEV market is ‘X’ big and we want ‘Y’ share of it,” said Chad Bell, Best Buy’s transportation new business solutions group leader.

Best Buy has been selling electric vehicles for less than a year, but has opened an additional 16 LEV departments to bring its total to 36. And it’s adding heavier electric vehicles (EV) like electric micro cars to its electric vehicle product mix, which suggests the company is more than mildly encouraged by its early success.

Since the original roll out in California, Oregon and New York City, electric vehicle departments have opened in Illinois, Florida and Texas. The company also will experiment and open a few heavy electric vehicle only departments.

“New electric vehicle technologies are hitting the market and we want to introduce them to our customers. So it’s exciting to see if they are something our customers want,” Bell said.

Best Buy currently sells e-bikes from manufacturers including Currie, Sanyo and Ultra Motor in price points from $499 to $2,700. And while Best Buy’s Geek Squad uses a few of Mitsubishi’s i-MiEV four-seat electric cars, Bell said there is no official use of LEVs by the company.

Best Buy features a transportation calculator on its e-vehicle homepage. Do your customers see e-bikes as recreation or transportation bikes?

Bell: The most common question asked at the stores is how much money can I save compared to a car, so it made sense to develop the tool for the stores. They can access the Web site and walk the customer through how much savings an electric vehicle provides, depending on the cost of gas and the mileage your car gets.

We don’t have any consumer data about what type of customer makes an LEV purchase because we are so new in the segment. I can say I met a woman at one of our stores, a frequent shopper of ours in her mid-30s. She had had hip replacement surgery and had given up riding a bike. We encouraged her to demo one of the e-bikes and she ended up buying it and is so excited to be bike riding for fun again.

Then I know a customer who bought an electric scooter for his wife who is a professor at UCLA. She now uses the scooter to commute to campus. So it’s difficult to say at this stage whether recreation or commuting is driving sales—we have both customers.

What are some of the differences in retailing e-vehicles in say an urban area, like your Los Angeles stores, compared to very bike-friendly areas like Portland, Oregon?

Bell: I’ve heard that cyclists are not receptive to e-bikes but that is not something we’ve experienced. We sell the same range of product in LA that we do in Oregon. Most people shopping the LEV department are shopping the store, and they are open to the product whether they are cyclists or not.

We have found that college communities are a good market. We still haven’t gone through the heat of the back to school season yet so I cannot comment on student sales, but we have seen a lot of interest from professors. Colleges are bastions of different thinking and they are open to electric vehicles. We now have stores close to colleges in Austin, Evanston, Syracuse and Boca Raton.

Many e-bike regulations are state specific. Has this been an issue in deciding where to put your e-vehicle departments?

Bell: Many of the state laws governing LEVs have not caught up with the technology. I expect as more of these vehicles get out on the road this will change. But local electric vehicle laws are the first things we look at when we begin looking for a new location. If they don’t allow the vehicles we sell, we move on. We have a Government Relation Group that is looking at e-vehicle regulations, but they are looking at the whole space of electric mobility, not e-bikes specifically.

E-vehicle suppliers liked Best Buy’s program because of the company’s commitment to training staff to service these products. How has the training program turned out?

Bell: We had to have a close relation with our suppliers because we are new to the technology. We depend on them to help us understand what we were getting into.

We have an old store in Minnesota that closed and we use it for training. Last year in May we flew in LEV experts and vendors for four days to train our staff about products and service issues. Good training is a huge part of who we are and having well prepared people familiar with the technology is what our customers expect.

So far we haven’t seen any specific issues crop up that we didn’t anticipate, but we are relatively new selling these products. Well, we did get feedback from our Oregon stores that we needed waterproof bags so we added Ortlieb bags to our accessory offerings.

We also offer locks, helmets and tires. Flats and broken chains and tune-ups are taken care of in our Auto Bays where car stereos and GPS are installed.

What new LEV technology do you foresee will make an impact in the electric bike market?

Bell: It’s going to be connectivity with cell phones. I’m not really sure how this is going to develop. They can manage the LEV systems and track where you go, but I’m not sure how they will interact in the future. People are passionate about their phones, so integration with electric vehicles is going to happen.

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