OPINION
AGE-DEMOGRAPHICS – A TALE OF YOUNG AND OLD The survey also reveals different ways consumers use finance. For those under 25, finance was key to making the purchase
(with over 70% saying they couldn’t have made the purchase another way). At the same time, over 50% of those under 25 said their spending did not increase due to the availability of finance. Whereas for older age groups, finance was less essential (with around 40% saying they could have funded the purchase another way), but the availability of finance allowed the majority of them to spend more.
BA DEALER SURVEY - QUALITATIVE RESULTS Whilst Novuna has been sharing its insights from quantitative consumer research, the Bicycle Association have been undertaking qualitative research with IBDs, reaching out to over 200 stores, listening to and understanding their challenges around consumer finance.
From these conversations, a clear picture emerges that many IBDs have struggled with consumer finance, especially in recent years, with many citing four key issues:
FCA LICENSING – A COSTLY OVERHEAD FOR SMALL BUSINESSES Many stores mentioned that FCA licensing has become more costly and time-consuming in recent years. When these costs can run into the thousands and need to be repeated every year, the fixed cost overhead has proved uneconomic when compared to the number of bicycles sold using finance. As a result, many stores had given up offering finance altogether.
INTEGRATION IS KEY For those who operate an EPOS/ECOMM system, integration has been strongly mentioned as a key driver in selecting a partner. Some who had attempted running parallel or manual
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systems had discovered that errors can occur between different staff/locations without integration.
RATES HAVE TO BE LOW Many stores mentioned high subsidy rates as a reason they stepped away from, or gave up entirely on 0% consumer finance, some saying these fees could eat up to 50% or more of the available gross dealer margin.
UPFRONT FEES AREN’T WELCOME Some stores also mentioned annual fees or administration fees could be off-putting, especially if charged upfront, where they may be uncertain how many finance deals they might sell in any given year.
FINANCE PROVISION IN THE IBD MARKET In previous research (looking at consumers and the cost- of-living crisis), I visited 100 IBD websites and found that
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