With the April 21 launch of their S3 and X3 electric bikes, VanMoof has rolled into the spotlight. While they’ve sold over 100,000 total bikes since 2009, they have much larger ambitions for the S3/X3 and their successors. Their factories now have the capacity to produce over 100,000 bikes per year. To put that in perspective, 1.4 million e-bikes were sold in all of Germany last year (source). Beyond its ambitions, VanMoof stands out for its go-to-market strategy. No wonder they have garnered comparisons to Tesla and Apple, two iconic consumer technology brands. How will VanMoof’s GTM strategy help it sell a million e-bikes? We’ll examine this question across their customers (who), product (what), sales channels (where), and marketing (how). Then, we’ll propose what VanMoof can do to grow even faster. But before diving into VanMoof, let’s talk about how e-bikes are sold now.
The e-bike buying experience in 2020
Purchasing an e-bike is a quite varied and even intimidating process. The challenges start with finding the right bike. There are over a thousand e-bike makers and counting. New e-bikes get written about by different and often non-overlapping outlets. Electronics/EV sites like Electrek, tech news sites like TechCrunch, and bicycle review sites like Electric Bike Review are all in the mix. Case in point: the VanMoof S3/X3 itself. While it garnered extensive media coverage in tech outlets, popular review site electricbikereview.com has not reviewed any VanMoof bikes since 2014. Reviews themselves often fall short in their approachability. They are focused on those already familiar with bikes or who care about technical components. Written review formats are wordy, while video reviews can be long on entertainment but short on useful insights. Those would-be customers who get intimidated by this deluge and simply want to test-ride a bike don’t have it much better. The fragmentation of brands and high bike cost means shops often do not have a particular size or model in stock. Even worse, most direct-to-consumer brands cannot do test rides since they lack physical stores.
The purchase process itself varies widely depending on the brand. You’ll have to buy online for most direct-to-consumer brands and budget e-bikes, while brick and mortar retailers are the main option for traditional bike and high-end e-bike specialist brands. Then, the waiting game begins. Order delays have plagued many brands lately (including VanMoof), as they have struggled to meet soaring demand by rapidly scaling their manufacturing and logistics processes. Shipping presents one final potential headache. Damaged bikes can result from mishandling of the heavy, awkward boxes and/or poorly padded bikes.
The post-sales ownership experience is equally challenged. Bike shops often lack e-bike expertise, particularly for direct-to-consumer brands where technical support and training is limited. Some bike shops will not service direct to consumer bikes at all, whether to prioritize their own bike customers or because they view certain bikes as difficult or even dangerous.
Given the complex reality of e-bike buying today, VanMoof and other innovators have a real opportunity to improve the experience and more specifically, attract first-time customers.
VanMoof targets a particular customer: younger urbanites who are technology early adopters. These customers appreciate- and are willing to pay for- good industrial design, like Apple’s most fervent fans. They live in Western Europe, particularly Germany and the Netherlands, the US, and a few cities in Asia, such as Tokyo. One can glean this from interviews and analyzing their marketing efforts- such as digital media, store locations, and Facebook owner groups.
My take: VanMoof’s sharp focus on this group is savvy. Their core demographic will be able to identify with the brand more clearly than its competitors, who tend to take more expansive views of their potential customers. The products themselves are a good match for these people as well- stylish, great for on-road, shorter trips with minimal cargo.
VanMoof sells two bikes to accommodate a range of sized people: the S3 and X3, both priced at $1998/€1998. They also sell accessories (racks, locks, etc). More uniquely, they offer two “Peace of Mind” (PoM) services: anti-theft protection and maintenance for three years each. One must purchase and pay for these services at the time of sale.
My take: The eye-catching design of the VanMoof is arguably the smartest go-to-market choice they’ve made. The distinctive frame shape, with its top tube extending beyond the downtube and seat tube, makes the bike stand out on the street. You instantly recognize it as a VanMoof, even from a distance. If you don’t yet know about VanMoof, you want to know what it is. Within micromobility, only the original JUMP Bike and the Boosted Rev scooter can claim to both be as visually distinctive and pleasing.
Integrated channels (where)
VanMoof’s vertical integration of the customer experience benefits customers starting when they are considering the bike and then throughout ownership. They own and sell bikes on their website, operate nine brand stores, and handle all post-sales services.
Pre-sale, their reinforce marketing efforts by offering test rides and increasing brand awareness thanks to their high foot-traffic locations. For example, their San Francisco store is located on the Mission District’s Valencia Street, a popular destination for pedestrians and cyclists alike. Eyeglass startup Warby Parker provides a good analogy for VanMoof’s retail strategy. Warby started online but since expanded to brick and mortar stores to facilitate try-before-you-buy, increase awareness, and drive sales. As a sign of confidence in this strategy, VanMoof CEO and co-founder Taco Carlier revealed during the S3/X3 launch they plan to open 20 new pop-up stores this summer, mainly in western Europe.
Post-sale, the brand stores meaningfully improve the customer experience and help drive upsells of their “Peace of Mind” maintenance and anti-theft services. This is because both services are conducted out of their stores and thus both faster and more convenient. This is quite rare among bike makers, electric or not.
For anti-theft, its shop employees go looking for stolen VanMoofs (more on the “Bike Hunters” later). This increases the chances a customer will promptly get their own bike back if it’s stolen.
For maintenance, VanMoof has a three-tier system that demonstrates an uncommonly high level of direct involvement. It looks a little different depending on whether one buys PoM service. If one does, there are 21 cities offering mobile maintenance- a mechanic will come to your house or office. This is a rare offering in micromobility. Elsewhere, VanMoof provides remote assistance and/or shipping to the nearest service center. For those not purchasing PoM maintenance, the nine brand stores handle warranty repairs, plus routine service for a fee. Elsewhere, it’s a similar arrangement as described for PoM- remote assistance and shipping covering only warranty repairs.
My take: Owning the entire experience is a mixed bag. It’s good for VanMoof in the near term but gets harder in the long term- unless they diversify. The degree of control and consistency for the customer is a big competitive advantage. However, you simply cannot reach many customers if you are solely reliant on opening your own stores every step of the way. It’s too expensive and will take time.
VanMoof has built a highly recognizable brand. It is futuristic, sleek, technological, practical, and design-focused. Where does it communicate this? Across a variety of earned, owned, and paid media. If you’re unfamiliar with those terms, see this quick summary.
While VanMoof had planned to announce the bike at the Micromobility Conference in California, it shifted to a livestreamed online launch event when COVID19 struck. This event seemed inspired by Tesla, both casual and well-produced. Simply holding such an event communicated that the S3/X3 was something truly different and noteworthy. “The medium is the message”, as Marshall McLuhan famously said.
VanMoof’s Youtube channel is perhaps its most entertaining marketing effort. There are rider stories, product overviews and, most importantly, the Bike Hunters’ monthly adventures. The Bike Hunters are VanMoof employees who attempt to locate stolen bikes if you have Peace of Mind service. These pursuits take them to faraway cities and even countries. Publicly devoting resources to bike retrieval sends a message both to bike thieves (leave VanMoofs alone) and to prospective buyers (we are fighting the good fight and worthy of your business). Beyond that, the Bike Hunter episodes are quite entertaining. I even heard Michal Naka is pitching a Bike Hunter reality TV concept to Netflix ;).
On the day of the S3/X3 launch, VanMoof received a spate of reviews from digital news outlets like TechCrunch, Electrek, and the Verge. These authors had been given test rides on early versions of the bike and wrote about their experiences. Also prior to launch, 20 riders were sent bikes so they could film and share their first impressions as part of an unscripted reaction montage video during the launch event.
VanMoof is focused on digital advertising, but looking elsewhere too. Google search engine ads and Facebook/Instagram ads have been spotted. The VanMoof marketing team focuses on three objectives with these ads: increasing brand awareness, demo ride signups, and bike sales. VanMoof is just dipping its toe into more traditional advertising- running with a new TV commercial.
My take: VanMoof’s disciplined focus is on full display with their marketing. The branding imagery is slick yet approachable and stands out in a way that’s consistent with their product and customers. They’re being very creative with owned efforts like the global launch event and the Bike Hunters videos. The paid marketing is a little anodyne, but they do walk a fine line between staying classy and really selling the e-bikes.
VanMoof should adopt a range of new tactics to achieve its goal of selling 100k+ e-bikes a year.
- Drive more test rides in current markets. The striking appearance of the bike and the riding experience are powerful arguments to purchase. Increase spend on digital ads. Adjust the content to highlight safety precautions being taken during COVID19. Consider other channels for testing once public health guidance allows (e.g. community events).
- Expand test rides to new markets. VanMoof’s announced plan will give them 29 markets with a physical presence by this summer, but why stop there? Brand ambassadors could be engaged in smaller but receptive markets like college towns or active pursuit meccas.
- Re-open indirect sales channels. Though VanMoof sold via existing bike shops in the early days, this would be a big shift. However, it would unlock serious growth that is not dependent on up front investment. For reference, Apple gets more than 70% of sales through its indirect channels (source).
- Increase software investment. A “smartphone on wheels” (h/t Horace Dediu) deserves iPhone-quality software. This deserves its own post, but better software integration and functionality has the potential to expand the e-bike’s utility and would truly differentiate VanMoof from rivals.
- Expand digital paid marketing, particularly lower-funnel direct response efforts to drive sales. There is a playbook for how to do this- retargeting ads and well-targeted Facebook-app family ads are great tools in the hands of a skilled marketer. VanMoof produces beautiful content already. This could be repurposed for such ads.
- Start a referral program for current owners. By many accounts, VanMoof owners love the brand and presumably are already driving sales among their friends and family. What better way to accelerate this than incentives? While Tesla was literally giving away Roadsters to tens of top referrers for a few years, VanMoof can benefit even with much more modest perks like accessories or an extension on the PoM service.
VanMoof has already distinguished itself among e-bike makers, both in its products and its strategy to sell them. And yet, growing sales 10x will demand new tactics- particularly those proven by the most respected consumer brands. I look forward to VanMoof applying its ingenuity to this challenge.
Thank you Michal and Zoe for reviewing early drafts of this post.