Best Practice in Omni-Channel: the Stella Success-Story
NUNSPEET, the Netherlands – The introduction of new business models on the Dutch retail market was disruptive for the regular IBD business in the past years. Especially the rapidly expanding e-bike market attracted many new brands, webshops and start-ups launching new sales concepts. One of them was Stella e-bikes. Two young entrepreneurs saw the potential of the e-bike market in combination with a strong online presence. Only eight years ago, Daan van Renselaar and Wilco van de Kamp started Stella e-bikes. It turned into the Stella success-Story.
Omni-channel distribution has many different faces. Bike Europe reported earlier on Rose Biketown in Germany. A fine example of a seamlessly merger of a brick and mortar store and a webshop as they had a long history in mail-ordering. Started as a traditional bicycle shop Rose recently opened a second office in Munich as well as showrooms in Italy, Switzerland, Denmark, Sweden, France and Spain; there’s a completely overhauled webshop and Rose totally integrated its digital and physical worlds.
Online – Offline
For Stella the online presence is probably even more important than for Rose Biketown, although for Stella most of the sales is done off line in direct contact with the customers. While many companies in the bicycle industry are taking their first careful steps in online sales or the development of omni-channel distribution strategies, Stella embraced this 21th century interactive communication medium completely. What made these two young entrepreneurs so successful in using internet for selling e-bikes, including the service this product requires, to people who have an average age of over 55 years?
‘Face to face contact is very important’
Together Daan van Renselaar and Wilco van de Kamp, both 30 years old now, started Stella with the idea that meeting their customers face to face was very important for the future of their business. Important part of their concept was also to sell e-bikes for much less than the average retail price which was common at that time.
Their idea proved to be correct and sales started to increase rapidly. People can easily book a test ride online and one of Stella’s sales people visits the customers at home with one of the more than hundred vans loaded with test bikes. Stella’s success came with a massive marketing campaign with TV and radio commercials, online bannering and full-page advertisement in the national newspapers.
Marketing worked out in detail
The head office based in the Dutch town of Nunspeet is also a pick-up point for consumers and their major warehouse. When arriving on an early October Wednesday morning for the interview, the parking lot is full, and people are waiting in a queue to pick-up their e-bikes. Stella’s marketing operation is thorough and efficient, although a Dutch advertising watchdog said last year that Stella should refrain to extend its ‘limited time discount offers’.
On location, all marketing has been worked out in detail. As a result, their e-bike sales are still thriving in October. Next to their head office, Stella has also opened some 40 shops nationwide. These locations serve as test centres, but also as pick-up point and service location. In this interview Daan van Renselaar andWilco van de Kamp explainthe successof Stella e-bikes.
What made you decide to start in the e-bike business 8 years ago: the product or the business model?
“We do have a background in the bicycle industry and saw the potential of the product. On the other hand, we were surprised to see the high average price of 2,000 euro at that time in the Netherlands. Offering these e-bikes for much less money with a different business model than generally used in the market, we knew the product had a huge potential. We saw the opportunity to open up the market for a much wider audience than only for those people who could or were prepared to pay so much money for an e-bike.”
Stella always claimed to be able to offer e-bikes for less than the average retail price as you operated without stores or a dealer network. Why did you change this original strategy from purely online in the past to a combination of online sales and brick and mortar stores?
“Online has always been a marginal part of our sales only. The biggest majority of our turn-over comes from sales by our own people who visit our customers at home. We regard face-to-face communication in combination with a high service level as essential for a successful business model. Seeing and riding an e-bike is of vital importance for consumers to decide about their purchase. That has been our philosophy from the start of Stella.”
‘We are absolutely surprised to see other leading brands to shift their focus from dealer to online distribution.’
Why have you started to open brick and mortar shops as these increases your expenses substantially?
“Our customers appreciated direct contact and for a service product like e-bikes we saw the necessity of service centre network. It is an important addition to the Stella experience. People want to feel and see Stella close to where they live. We are absolutely surprised to see other leading companies and brands in the bicycle industry to shift their focus from dealer to online distribution. They should value their dealers much better as their position is very strong.”
Stella now operates some 40 stores in the Netherlands and two in Germany. Is this network adequate?
“Yes, for now it is sufficient to cover the market in the Netherlands. However, we are always looking for retailers who want to join the Stella success. Dealerships don’t fit in our concept, we believe in single brand stores only. We are only looking for local heroes, those are the ones we like to add to our network and transform them into a Stella test centre.”
What is your view on the dumping duties levied on e-bikes imported from China that have already been announced on a provisional basis and that might be introduced next January?
“All Stella e-bike are assembled in Europe, so this will not affect our operation directly. We are in favour of the anti-dumping duties as it increases the employment opportunities in the European Union.”
Your ambition is to become market leader in Europe. How are you going to organize this international expansion in your operation as well as financially?
“It is too early to talk about our international expansion strategy. We will start in Germany were we already operate two shops. DM Equity Partners acquired a substantial minority share this spring. They not only bring the financial resources we need for the international expansion but more important their proven quality and European connections.”
To become European market leader in e-bikes, Stella will have to surpass the Accell Group. Accell’s e-bike sales in 2018 will exceed well over 250,000 units. How long do you need to pass these figures?
“When we started Stella we envisioned the future of the company and we have been successful to reach our goals on a national level. The same goes for our international expansion. Above all the growth of the company must be manageable which means that you first have to organize your back office before taking the next step. We don’t want to trouble our customers with the expansion of our business.”