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Marketing strategy · Isla Bikes · c. 2019 · case study 01 · 5-minute read

Isla Bikes: a bike that grows with the child

Kids outgrow bikes fast. I wrote a marketing plan for a circular scheme, renting or part-exchanging bikes as children grow, and looked at what it would do to a made-to-order business.

My roleMarketing plan and environment analysis
Whenc. 2019, university coursework (Innovation and Entrepreneurship)
StageDiscover and define
MethodsMicro and macro environment analysis, competitor benchmarking, channel strategy
The headline

Rental starts at a few pounds a month

£5.50 / month

The direct competitor already rented kids' bikes from £5.50 a month, with free UK delivery and free swaps after 18 months. Any scheme had to beat that on more than price.

The competition

Two ways to solve "they've outgrown it"

ModelWhoOffer
RentalThe Bike ClubFrom £5.50/month (kids) to £27 (adult); free swaps after 18 months; keep the bike after 30 months
Part-exchangeHalfords20% of the old bike's price off a new one, if the old one was bought there
Part-exchangeEvans Cycles10%, same condition
Part-exchangeRutland Cycling50%, same condition
What it means for the business

Two risks inside the business

Cash flow

  • Made-to-order is paid upfront. Monthly rental isn't, so bikes have to be funded before launch.
  • Funding has to be in place before the campaign goes live.

Existing customers

  • People who already bought a bike shouldn't feel punished.
  • Offer part-exchange credit against the subscription, and give bikes that can't be upgraded back to the community, or to families whose bikes were stolen.
The wider market

Direct-to-consumer, and the Amazon question

Bike shops were struggling, and brands were selling direct to customers (Mintel UK Cycling Market Report, 2019). Isla Bikes was already direct-to-consumer, which gave it customer data that resellers don't get.

The trade-off is reach. Most UK shoppers use Amazon, and its recommendations lower the effort of choosing. But it can also use a newcomer's sales data to launch its own cheaper range, so selling there was a risk.

Where shops fit

Concierge services: the shop as a service

Retailers were answering the direct-to-consumer shift by turning stores into services. John Lewis trialled a concierge offer, from product advice and home design appointments to in-store events and workshops. It also piloted letting other retailers use its click-and-collect network, so customers could pick up another brand's order at any John Lewis or Waitrose.

Digital concierges were going the other way. Voice assistants such as Alexa pick a product for the shopper, so the customer may never see the alternatives.

The opportunity for Isla Bikes: a direct-to-consumer brand doesn't need its own shops to give a physical service. Shared retail space and click-and-collect points could handle fittings, swaps and returns for a rental scheme, without giving up the customer relationship.
What I took from it

A circular offer changes the whole business model, not just the marketing

Then → Now

Then: A marketing plan. Now: I'd model the cash flow first, because the scheme lives or dies on funding the stock.

Then → Now

Then: Desk research. Now: I'd interview parents about when and why they replace bikes.

Then → Now

Then: Kids' bikes. Now: the same circular thinking runs through my bike work today.