Best Buy to Test Electric Motorcycle and Bike Sales
Motorcycles
and bikes are not what most consumers expect to find in the typical Best
Buy store, but that may change one day as the consumer electronics retailer
plans to test selling the Brammo Enertia electric motorcycle
in a store in Portland, Oregon next month, according to the Minneapolis/St.
Paul Business Journal.
Best
Buy intends to roll out the Enertia bikes to other store locations on the
West Coast following the launch. The motorcycle will retail for $12,000
and be eligible for a 10
percent federal tax credit. The Entertia is 100 percent plug-in electric
and has a range of about 45 miles.
Best Buy
is also going to sell six Izip e-bikes
and two electric scooters from Currie Technologies in the same stores.
According to a report last month on the Bicycle
Retailer and Industry News website, the Izip bikes will retail from $499 to
$2,000.
Another company, Ultra
Motor, will also sell some of its e-bikes through the consumer electronics
chain.
Currie president Larry Pizzi believes
Best Buy is looking to get the jump in a space where bike dealers have
yet to rush in. "They see specialty retailers not diving in head first,"
he told Bicycle
Retailer and Industry News.
"Their Geek Squad
knows how to analyze electronics," said Mr. Pizzi.
"Combining all those resources, they felt like they could handle this category."
Ed Benjamin, an e-bike
expert, told Bicycle
Retailer and Industry News, "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." He added, "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."
Discussion Questions:
What do you think about Best Buy’s test of electric bikes and motorcycles?
Will its early entry into the category give it an advantage over mass
retailers as well as bike shops and motorcycle dealers?
It’s one thing for Best Buy to branch into musical instruments: There is a correlation between this type of product and other sorts of audio and home entertainment equipment sold in the store. It’s also a chance to “nationalize” a very fragmented category.
But it’s hard to make the same argument for electric bikes and motorcycles. True, this is another fragmented category dominated by local independent retailers (outside of dealer networks for mega-brands like Harley). But its relevance to the rest of Best Buy’s business is hard to figure. Granted, Best Buy needs to fill space vacated by the shrinking CD and DVD departments…but it doesn’t need to become “a bunch of stuff” either, just because it sees a tenuous connection between these leisure-oriented businesses.
Seems a tad off-brand, but it may be worth a pilot.
As an early adopter, Best Buy will certainly gain some valuable learning on the demand for these products as well as the degree to which consumers will give them credibility for carrying such a specialized product category. Many retailers like to sit back, watch and learn from early adopters like Best Buy in this case and certainly other retailers will be paying close attention.
Selecting the right mix of stores to carry such a product will have a lot to do with its success. A “green-friendly” product like electric bikes should resonate well on the West Coast and could be great for students on large campuses for example but price could be an issue. I wonder if they are studying the roll out strategy of the Segway.
It would seem that Best Buy is taking us for a ride.
This is a good move to generate press and if I’m one of the bike companies, I like it. That said, I have to question this decision. The cost of demonstrating, repairing and selling these bikes is not worth the PR or potential profit.
Seems to be moving out of its core competency. In addition, what about the space issue? What comes out of the retail store to make room for motorcycles, bicycles, and the space for repair work?
I think it is interesting that so many people are wary of this idea. I personally think it makes a lot of sense. Best Buy is an store that sells electronics. As the definition for electronics change, why shouldn’t Best Buy expand their product line? I don’t think this is getting away from their core competency at all, in fact I believe it is right on target.
Let’s take it a step further. Fast forward 10 years from now. If automobiles are produced being 100% electronic, with computers monitoring the efficiency of the vehicle, who would we want to sell those cars? A mechanic who has grease on their hands from working on traditional autos, or a computer and electronics expert who understands circuity and rebooting? I think we are not that far away from seeing Best Buy test the sale of electric powered cars.
I know it is a cliche, but if the passenger train companies thought of themselves instead as transportation companies, they would have been the dominant players in the airlines business. Best Buy is smart not to think of themselves as a music company, or a company that sells televisions, they are a company that understands and markets electronics. This will allow them to enter into additional categories that currently do not even exist today.
There is a reason that “transportation” is becoming a test-the-waters category right now, even as the major auto makers struggle mightily. The need for energy-efficient transport isn’t going away, and a complete overhaul of the current build-it-and-they-will-come auto industry is overdue. Michael Dell quietly shopped major auto groups a while back, Walmart keeps hinting at going into the hybrid/electric car business and in the meantime they’ve begun to sell better bikes in some locations in a direct assault on specialty bike stores. Best Buy is jumping into a hot category head first and expanding the its Geek Squad service premise at the same time. Everyone will will be watching.
P.S. Maybe once we wrap out heads around this, we can talk about why they are expanding vinyl and selling patio furniture!
It makes sense to experiment–you have a potential good fit with the demographic. People come to Best Buy to learn about new electronics and “toys”; many stores are in suburban malls with space to accommodate something new. Early days for small e-vehicles, so a good time to see consumer response and the type of service structure needed to make it work.
Great idea, why not? More retailers should think like Best Buy does–try to innovate! This could open up all new avenues for them–or not–but in any case, they’ll at least know something faster than their competitors. James Damien is a brilliant guy.
OK, let’s face facts. Best Buy is taking a very large chance. While both are electric, computers and bikes are a world apart. One is complicated electrical engineering, the other is relatively simple mechanical engineering. You don’t fix electric bikes, you replace components which requires a fairly deep parts department.
As the Geek Squad seems to have few parts in stock for TVs, laptops, etc, and have been known to keep consumers waiting for weeks to repair under-warranty TVs, I would think a wholesale rethink of service will have to happen to make this work.
Hey, let me see a Geek flush the brake fluid on a bike. Lots of Luck! But this will be fun to watch!
Good for Best Buy, electric…electronics, it fits. They aren’t going to go crazy, they will learn. If it gets legs they are early adopters and can make money, if not they get good press for being leading edge which will translate to their core consumer. I think some of their car audio installers can cover the brake lines for the geeks.
I think it’s an interesting observation to note that the surviving entity from the failed Circuit City is CarMax, Inc. (KMX) which, at the time, many analysts thought was a goofy idea: an electronics retailer being in a fixed price value based new car business.
I think there is a good chance this seemingly goofy idea from BBY in the long term should be successful. The idea may seem a novel concept, but it sounds timely for at least a trial effort.
Best Buy is a retailer. It touches so many customers, and these items are clearly something whose day has come. BB should meet their customer’s needs. This is a good idea, however, is it the best use of BB’s retail space vs. offering more software, computers, CDs etc? I think not. The velocity and margins will not offset the traditional CD dollars that this space occupies. Add to this the customer service and repairs that BB now needs to offer, and you have an entire shift in focus.