Retailers selling bikes have seen great traction thanks to the arrival of the e-bike a few years ago. E-bikes are changing transport in cities all over the world and present a huge opportunity for bicycle retailers. The current crisis will only accelerate this trend.
Traditionally only selling in-store, we are now seeing a rise in the sale of bikes online. Within three years, retailers are expecting more than one-third of all bike sales to be made online, compared to roughly one-fifth today. This shows that selling offline as well as online will become increasingly important.
Currently, shoppers mostly start their journey on one channel and complete it on another one. Since these lines will come to blur with time, retailers must adapt and allow shoppers to complete their purchase in the manner that is most convenient for them. This process should be seamless. Creating and owning a powerful omnichannel approach will become the ultimate key to a bike retailer’s success, and this is one of Qover’s unique advantages. Qover is a digital insurance specialist that provides Pan-European coverage in a digital way, thus facilitating a seamless offline or omnichannel approach.
E-bike buyers expect insurance, just like for a car
Mobility shiftHistorically, bikes were (almost exclusively) purchased for leisure, sport and/or weekend activities. In recent years, however, with rising traffic jams, packed public transportation, and an increase in health awareness, e-bikes especially have seen a huge rise in demand. People now use their bike as a mode of transportation. More specifically, it is used as a way of commuting efficiently on a daily basis. It is an independent and productive transportation mode that provides exercise and keeps you healthy at the same time. Together with the increasing share of e-bike sales, the profile of bike customers has also changed and as a new mobility solution, e-bike insurance has become crucial.
A quest for value-added servicesDavy Louwers, CEO of Online Bike Group (headquartered in one of the most mature markets in the world for cycling, i.e. the Netherlands), announced in spring 2019 that their prime brand, fietsenwinkel.nl, would change its strategy to adapt to this new market reality and go all-in on e-bikes. “It’s not enough to be the cheapest anymore, client-centricity is our main priority. 44% of our e-bike sales are commuters who are way more demanding. They want a good and fast bike with a great service offering. They choose an e-bike over a company car, so they expect replacement bikes, roadside assistance and flexible financing.”
A similar acknowledgement was made by Internetstores’ CEO Hans Dohrmann: “The customer who is looking for a high quality e-bike to commute, or the family who wants to buy an expensive cargo bike, must be offered the service level that they expect according to the price.”With the tremendous rise in e-bikes comes a rise in demand for insurance. Now that cycling has moved from recreational use to a functional mode of transport, the entire purpose of it has changed. And this is where insurance kicks in. When commuting more regularly with an e-bike, many people would rather have it insured as they are most likely leaving it unattended in a city. Having a theft and damage insurance, as well as assistance, eases the mind and means bike owners do not need to worry about their costly e-bike parked in the open street.In the quest for value-added services, insurance is definitely one of the lowest-hanging fruits available to retailers. E-bikes require a significant investment from customers, and tend to be used on a daily basis. This makes theft a real nightmare scenario that buyers want to hedge against.Insurance as a new source of revenue
A Roland Berger survey in The Netherlands showed that new bike sales account for 70% of the gross margin of a bike retailer, whereas workshop fees account for 25%. Unfortunately, there is only limited diversification possible with regard to the revenue sources of a bike shop. On top of that, the survey found that an average shop makes a profit of about 9% on capital, whereas 40% of shops were not profitable enough to pay the shop owners a salary of €40,000 per year. This means bike retailers must be extremely creative and generate new sources of revenue that do not eat their margin.
Guarantees and free maintenance are a popular sales incentive to sweeten the deal with a customer, but they have a real impact on cost structure and margin. Offering one year of free assistance, on the other hand, does not cause this side effect and is a valuable offer to someone who is going to be cycling to work every day. When looking at cycling brands, of which you have thousands to choose from, it does not look quite the same with insurance, as the range of choice is much more limited.
Qover is one of those unique companies that sells insurance both on online and offline channels, helping retailers to blur the lines between sales channels while making a smooth transition between them. Moreover, it enables a retailer to initiate a sale offline and let a customer finish it online or vice versa. Proposing insurance becomes inevitable and will turn into a competitive advantage for the retailer. By being able to sell it, you create customer delight, which in turn creates customer satisfaction and, in the long-term, customer retention.
You get the best of both worlds—but why? In the event of a stolen bike, for example, your customer will be more likely to come back to you, especially if the voucher is linked to your store, which is the case with Qover’s bike insurance. In addition to that, Qover can help you sell insurance across different European countries thanks to one simple API integration and technology that handles all of the associated complexities: