How to encourage upgrades from e-scooters to e-bikes

With the boost of electric power, the scooter, once reserved for children’s playground fun, has now become a common sight in cities across the world. Seen as an environmentally friendly way to avoid traffic jams, the e-scooter has become the go-to option for many inner-city commuters, but is it the best solution?

Reviewing the growth of the e-scooter market, we explore how e-bikes offer a better alternative for commuters and recreational travel and share how to use sales promotions to encourage customers to upgrade from an e-scooter to an e-bike.

The e-scooter market in 2020

The interest in e-scooters was growing pre-pandemic with sales up annually by nearly 100 per cent at the start of the year.1 The reasons behind this rise could be attributed to increasing environmental awareness or improvements in technology that made travel by e-scooter more viable. The health concerns and social distancing restrictions imposed as a result of COVID-19 only accelerated this growth. Halfords has reported an increase in sales of e-mobility products, including e-scooters and e-bikes, of more than 230% since April 2 while the Bicycle Association estimates current UK ownership of e-scooters at 200,000.3

Weighing up the best e-product option

Could there be a dose of novelty factor when purchasing an e-scooter? One that leads to a point where a more suitable alternative is then considered? Richard Thorpe, the founder of Gocycle, sees this as an opportunity for e-bike sales:

“I think the e-scooter market is a really interesting one because I think it's an amazing natural feeder for new customers that are going to want to upgrade to e-bikes after they've gone through their initial phase of fun and exhilaration of commuting on an e-scooter, and then realised that it’s quite a stressful commute to do that daily.” 4

Affordability is also likely to be a key factor when choosing an e-product, with most e-scooters costing less than the average e-bike. However, in terms of value and overall practicality, the e-bike stretches ahead with its advantages.

Long term, the e-bike is better for the wallet and the environment. Its battery lifespan lasts for an average 3-5 years5, compared to the 1-3 years of an e-scooter.6 When factoring in comfort and convenience, the benefits of an e-bike makes it clearly the better option. Its sitting position and storage compartments for laptops and bags allow for much more comfortable travel. And, with the added benefit of being able to pedal should it be desired or required, an e-bike offers increased flexibility for longer trips.

Promoting the upgrade

The practical advantages of an e-bike may be apparent to your customers. Still, when making their choice, certain purchase barriers may remain, particularly if they are venturing into purchasing an e-product for the first time. The question then remains, how do you encourage upgrades from e-scooters to e-bikes?

Removing purchase barriers can be achieved using creative, tactical sales promotions. These strategies will boost confidence in the product, offer reassurance in the purchase decision and make the price-point more appealing to customers looking to upgrade.

Here are our favourite sales promotion tactics that are proven in incentivising customers to upgrade their products:

Trade-ins

Design a creative campaign around a time-limited trade-in promotion and customers will be motivated to upgrade their current e-scooter to an e-bike alternative. By adding in a reward, either with cashback or a relevant gift, alongside the prospect of a new e-bike for trading in a current e-scooter, you can use this promotional mechanism to shorten refresh cycles and motivate product upgrades.

Cashbacks

Cashback promotions are an effective strategy for removing price purchase barriers. This innovative alternative to costly traditional discounting offers customers savings on their purchase, in this case of an e-bike, driving a sales uplift while still protecting a brand’s bottom line.

 Buy and try

For new or unfamiliar, higher-value products, such as e-bikes, giving customers the option to ‘buy and try' offers reassurance in their purchase decision. With a no-obligation trial period, where customers can return their product if desired and receive a full refund, risk considerations are removed, and product sales are uplifted.

Opia makes running these sales campaigns easy, with our end-to-end promotion management service. From campaign design and platform set-up to claim handling, collections and recycling, we focus on making the process easy and hassle-free for you and your customers.

There are definite advantages to purchasing an e-bike over an e-scooter. However, for some customers, reservations remain. Using smart sales promotions, such as the strategies suggested, alongside imaginative marketing campaigns, will help to persuade customers to make this upgrade from an e-scooter to an e-bike.

To find out how we can help you motivate customer upgrades on your product lines, please get in contact with our team.

 

1 https://www.thisismoney.co.uk/money/cars/article-8435691/Are-e-scooters-greener-transport-future-menace.html

2 https://www.theguardian.com/uk-news/2020/oct/07/the-e-scooter-road-menace-or-saviour-of-the-commute

3 https://www.bicycleassociation.org.uk/e-bikes-vs-e-scooters/

4 https://electricbikeaction.com/the-go-behind-gocycle/

5 https://www.bicycling.com/bikes-gear/g20045132/your-ebike-questions-answered/#

6 https://www.electricbikescootercar.co.uk/how-long-do-electric-scooters-last-before-you-need-to-change-the-battery/


Why Avoiding the Discounting Trap is Critical for the Profitability of Furniture Retailers

The relentless sales from big brand furniture retailers are something to which we’ve all become accustomed. Boxing Day, the summer season, and, only shortly around the corner, Black Friday all begin to merge into one rolling tide of price cuts, resulting in customers always on the lookout for discounts and yet never really believing they are saving money from these ever-lasting offers.

Competing in this environment is tough, particularly during a year when sales of high-value goods, like furniture, have been so turbulent. We review the impact of this discounting trap, created by high-profile furniture brands, before exploring how to avoid discounting products through the use of smart alternatives that can boost sales without being detrimental to your bottom line.

The curse of the discounting trap

Black Friday is on the horizon, on the 27th of November. As always, significant price cuts are expected. However, despite the hype, there is a sense of discount-fatigue, particularly in the furniture sector. Too many cut-price sales by well-known brands have meant that these ‘special’ prices just don’t feel as special any more.

Trying to compete with this level of price-cuts is challenging, particularly for smaller retailers where margins aren’t so big, and it becomes simply unviable for their profitability.

An erratic year of furniture sales

Furniture manufacturers and retailers have been on a bit of a roller-coaster ride with their trade throughout 2020. The lockdown in March saw manufacturing forced to stop and retailers close their doors, leading to many employees being furloughed.

At the same time, the lockdown travel restrictions also created customers with more money to spend and wanting to improve their home, where they were now spending so much more time. Online orders soared, and when retailers opened their doors in mid-June, business began booming.2

The repercussions of this spike in sales is a shortage of foam and particleboard, reducing production capacity and driving up costs in the run-up to Christmas3. Furniture retailers have been left needing to pass on these increases or close their order books early at a crucial time.

However, the industry is under no illusion. This rush of sales could quickly turn as the country faces an economic downturn, and they deal with the added complication of Brexit also interrupting material supplies.4 A clear, effective strategy is needed to retain profitability, and, for many furniture manufacturers, traditional discounting is not the answer.

The long-term impacts of discounting

Traditional price cuts are used to drive footfall into stores and create a sales uplift across specific product lines. And it works – for the short term. However, these untargeted price discounts are an extremely costly way to boost sales, unnecessarily cutting sharply into your margins. Recovering your full-price position also becomes very difficult, leading to a discounting trap, which can have disastrous long-term effects on your bottom line.

Furthermore, with so many furniture retailers using discounts to attract their customers, the impact is becoming lost, and promotions of this kind lack any point of difference against competitors.

It is vital that furniture retailers understand how to avoid discounting products whilst retaining sales if they are to remain profitable. The good news is there is a smart alternative to traditional discounting that protects margins and offers the same, if not improved, motivation to buy.

How to avoid discounting products – alternative solutions

There is a range of innovative sales promotion solutions that can be used to engage your customers, drive a sales uplift and deliver improved profitability.

Designing a creative campaign, using tactical promotions, will create the same buzz around a product as upfront discounts. Proven in effectively removing the purchase barrier, they provide brands with a much more cost-effective method of promotion.

Examples of these promotional strategies include cashback campaigns, gifts with purchase or instant win offers:

  • Cashback rewards highlight customers’ savings and motivate purchases without the need for upfront discounting.
  • Gift with purchase promotions work on a similar basis, presenting better-perceived value for the customer with the addition of a specially selected, market-relevant gift.
  • Instant wins campaigns use high-value, sought-after rewards with the added excitement around a competition to drive sales.

Securing longer-term profitability, particularly during a climate of uncertainty, will also be immensely valuable to your brand’s future. Strategic sales solutions strengthen brand loyalty, shorten refresh cycles, widen your reach and lead to an increased share of the customer wallet.

Mechanics that achieve these goals include referral and rewards programs, which use strong incentives to drive recommendations and reviews, and trade-in promotions, which offer time-limited rewards to motivate product upgrades.

Creating smart sales promotions provide customers with a compelling reason for purchase without the need for costly upfront discounting. Working on the basis that only the most engaged customers make their claim, promotional costs are significantly reduced – often by up to 50%!

Furthermore, driven by market insights, these innovative and unique campaigns create a point of difference when compared to competitors' relentless discounting.

In a highly competitive market, finding cost-effective solutions that allow you to avoid the traditional discount trap is critical. And with a discount-fatigue setting in and an increased sense of uncertainty about the actual savings being made, campaigns that offer something of value are shown to be highly responsive.

To find out more about how Opia creates market disruptive promotions that allow your brand to stand apart from your competitors, engage customers and drive a sales uplift, please get in touch with our strategy team.

 

1 https://www.idealhome.co.uk/news/black-friday-257538

2 https://www.theguardian.com/business/2020/oct/10/covid-boom-uk-furniture-firms-sitting-pretty

3 https://www.furniturenews.net/news/articles/2020/10/940782193-material-shortages-affecting-furniture-production-and-pricing-says

4 https://www.business-live.co.uk/manufacturing/manufacturer-reveals-how-lockdown-led-19019417