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1. 1.3 The evolution of the bicycle industry 50 years after Eddy Merckx’ victory 1
CONFIDENTIAL Template Innovation Day 2019CONFIDENTIAL
THE EVOLUTION OF THE BICYCLE INDUSTRY
50 YEARS AFTER EDDY MERCKX’ VICTORY
David Pas
Coordinator DesignLab
David.pas@verhaert.com
TRACK 1
MyFutureProduct

2. 1.3 The evolution of the bicycle industry 50 years after Eddy Merckx’ victory 2
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• 1969 : Some facts and figures
• SPRINT 1 : the race to performance
• SPRINT 2 : from performance to experience
• SPRINT 3 : from product to service
• SPRINT 4 : the next race
THE EVOLUTION OF THE BICYCLE INDUSTRY
50 YEARS AFTER EDDY MERCKX’ VICTORY

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1969
SOME FACTS & FIGURES
About Edouard Louis Joseph (Eddy) baron Merckx
and his Tour de France victory

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1. Eddy Merckx 116u 16' 02"
2. Roger Pingeon + 17' 54"
3. Raymond Poulidor + 22' 13"
4. Felice Gimondi + 29' 24"
5. Andres Gandarias + 33' 04"
6. Rini Wagtmans + 33' 57"
7. Franco Vianelli + 42' 40"
8. Joaquim Agostinho + 51' 24"
9. Désiré Letort + 51' 41"
10. Jan Janssen + 52' 56"
TOP 10 TOUR DE FRANCE 1969

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SPONSOR : FAEMA

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TEAM AND JERSEYS
Faema Team
In ‘69 Eddy won the yellow, green and polka dot jersey

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THE FAMOUS SPONSOR (AFTER 1969)

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1. Egan Bernal 82u57’
2. Geraint Thomas +1.11
3. Steven Kruijswijk +1.31
4. Emanuel Buchmann +1.56
5. Julian Alaphilippe +4.05
6. Mikel Landa +4.23
7. Rigoberto Uran +5.15
8. Nairo Quintana +5.30
9. Alejandro Valverde +6.12
10. Warren Barguil +7.32
TOP 10 TOUR DE FRANCE 2019

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THE RACE TO PERFORMANCE
Does better means faster ?
1969
SPRINT 1

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1. Egan Bernal 82u57’
2. Geraint Thomas + 1’11
3. Steven Kruijswijk + 1’31
COMPARISON TOP 3 1969 - 2019
1. Eddy Merckx 116u 16' 02"
2. Roger Pingeon + 17' 54"
3. Raymond Poulidor + 22' 13"
Distance
3365,8 km
average speed
40,58 km/h
Distance
4117 km
average speed
35,409 km/h

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THE MATERIAL
Steel frame, made by Kessels (“Main D’Or” brand)
10 speed Campagnolo
Carbon frame, Pinarello
22 speed Shimano Dura-Ace

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COMPONENT BREAKDOWN
49 %
OF THE COST
68%
OF THE
WEIGHT

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COMPONENT BREAKDOWN
49 %
OF THE COST
30%
OF THE
WEIGHT

14. 1.3 The evolution of the bicycle industry 50 years after Eddy Merckx’ victory 14
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COMPONENT BREAKDOWN
2 %
OF THE
WEIGHT

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FUNCTION, COST AND WEIGHT
Application Function Wear Strength Cost Weight
Wheel
multi-part mechanical
Performance
tensile loading tensile strength 21% 20%
Frame core structure
stress/strain
Loading
tension/compression
Strength
49% 68%
Components
moving
mechanical parts
high
mechanical wear
need varies 28% 10%
Helmet
protect
cyclist head
one use-failure
for safety
impact 2% 2%

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ANALOGY : CAR TODAY

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BUT WHAT’S THE BENEFIT?
Delta speed = 40,58 km/h - 35,409 km/h = 5,171 km/h
= 0,10 km/h faster per year
Eddy Merckx’ average
speed was 35,4 km/h
Egan Bernals’ average
speed was 40,58 km/h

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WHAT DRIVES THE SPEED ?
Delta speed = 40,58 km/h - 35,409 km/h = 5,171 km/h = 0,10 km/h per year
more gears
lower friction
lower weight
49% of the cost
30% of the weight
assume 50%
effect = 0,05 km/h

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THE OTHER 0,05 km/h : NUTRITION ?

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THE OTHER 0,05 km/h : SUIT AND AERODANYMIC ?

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AND DON’T FORGET THE EFFECT OF THIS…
BETTER ROADS

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OCCASIONALY SOME DISRUPTIVE INNOVATIONS IN BICYCLE HISTORY
carbon pedal
Breakthrough pedal technology innovation by LOOK in 1984, based on their ski binding expertise
clipless

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BUT MAINLY IT’S A BALANCE BETWEEN NEEDS & SATISFACTION
New technologies start out at the bottom left of the curve, delivering less than the customers
require. As a result, customers demand better technology and more features, regardless of the cost
or inconvenience. A transition occurs when the technology cannot satisfy the basic needs.
Index shifters
Integrated shifters
Electronic shifters

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SOMETIMES PUSHING TECHNOLOGY TO CREATE A NEED
Disk brakes are ‘pushed’ from mountain bikes to the race bike segment with the ambition to set a new standard

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INNOVATION DRIVERS AND VALUE TODAY
1. Frame
• Long term : material
• Short term : color and trim, graphics
2. Components
• Long term : new material/technology
• mid term : mechanical improvements
MARKETING
49%
49%
VALUE

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FUTURE INNOVATION DRIVERS AND VALUE
1. Frame
• Long term : material
• Short term : color and trim, graphics
2. Components
• Long term : new material/technology
• mid term : mechanical improvements
3. Software
• Short term : new UI, new features
• Mid term : power management
MARKETING
49%
? %
?%
VALUE
49%
? %

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ANALOGY WITH CAR BUSINESS - THE VALUE WILL SHIFT TO THE SOFTWARE
Morgan Stanley Research predict a value shift in the near
future in the car business, due to the increasing importance
of software.
The COWBOY bicycles have smart software delivering
automatic assistance that adapts intuitively to the speed
you need. No matter the terrain, power your ride in a flash.
Besides this, it comes with a Built-in GPS tracking and
connectivity for full support.

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FROM PERFORMANCE TO EXPERIENCE
Segmentation
Job-to-be-done
New market categories
1969
SPRINT 2

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THE SEVENTIES
BMX began during the early 1970s in the
United States when children began racing
their bicycles on dirt tracks inspired by the
motocross stars of the time. BMX racing
was a phenomenon by the mid-1970s.

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HOW MANY BIKES DO YOU USE? WHEN AND WHY?
WEEK WEEKEND

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THE ‘JOB-TO-BE-DONE’ THEORY
“PEOPLE DO NOT JUST BUY A
PRODUCT OR SERVICE.
THEY ‘HIRE’ THEM TO MAKE
PROGRESS”
The Job-to-be-done metaphor forces us to
focus on the customer. it emphasizes the
progress they are trying to achieve. we’re then
less likely to think about the product or service
first

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THE ‘JOB-TO-BE-DONE’ OF A BIKE. THE BASE FOR SEGMETATION
Comfort SpeedFUNCTIONAL
Pragmatic David ‘Me-time’ DavidEMOTIONAL
SOCIAL

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DO YOU BUY A CAR ONLY BECAUSE OF IT’S FUNCTION?
THE EMOTIONAL JOB-TO-BE-DONE ?

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DO YOU GO TO A BAR BECAUSE YOU’RE THIRSTY?
THE EMOTIONAL JOB-TO-BE-DONE ?

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FUNCTIONAL AND EMOTIONAL
The Job-to-be-done metaphor forces us to focus on
functional and emotional aspects. Note that the
emotional ones can be as important as the
functional ones. Think back of your latest purchase
and ask yourself about the different jobs.

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CAN WE ALWAYS RATIONALIZE THE EMOTIONAL VALUES ?
S-Works Tarmac Disc –
SRAM ETAP
€ 10.999,00
People tend to rationalize their emotional decision to purchase. A job-to-be-done strategy should take this into
account. But when a product is exceeding the expected performance level, this could be very challenging

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NEW MARKET CATEGORIES BASED ON NEW SECONDARY FUNCTIONALITIES
NEW FUNCTION NEW FUNCTION
EMOTIONAL ?
SOCIAL ?
EMOTIONAL ?
SOCIAL ?
Icon new categories create
strong brands and vice versa,
indicating that the emotional
JTBD is important.

38. 1.3 The evolution of the bicycle industry 50 years after Eddy Merckx’ victory 38
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Don’t you remember this one ?
IS IT REALLY NEW?

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FROM PRODUCT TO SERVICE
From bike ownership to bike ridership
1969
SPRINT 3

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MODAL SHIFT : THE BENCHMARK AND THE CHALLENGE

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It’s clear that energy efficiency is
not the key purchase driver.
If we want to increase bike ridership in
a significant way, let’s have a better
understanding of the motivators and
the barriers.
MODAL SHIFT : (LACK OF) MOTIVATION
Speed(MPH)
kcal/km

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INSIGHT : REASONS AND BARRIERS TO SWITCH TO E-BIKE
To keep me fit
Eco-friendly
To save money
Convenience
34%
30%
30%
22%
Bad weather
Expensive
Distance
Arriving sweaty
57%
34%
31%
25%
REASONS TO SWITCH
BARRIERS TO SWITCH

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CASE ATHLON: UNDERSTANDING MOTIVATION, ABILITY OR TRIGGERS?

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TOOLS: UNDERSTANDING PERCEPTION, LACK OF MOTIVATION OR ABILITY

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FOCUS ON THE RIGHT STEPS
BEHAVIOR = ƒ(MAT)HIGH IMPORTANCE
HIGH FRUSTRATION
DO WE LACK MOTIVATION OR DO
WE MISS CAPABILITIES….?
Focus on a step in the
process with….
And check the
following

46. 1.3 The evolution of the bicycle industry 50 years after Eddy Merckx’ victory 46
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PUSH BY INCREASING THE AVAILABILITY
Growing public initiatives to push the ridership -
against ownership - by offering large scale
24 hours availability and reliablity.
ANTWERP : 4200 bikes - 297 stations

47. 1.3 The evolution of the bicycle industry 50 years after Eddy Merckx’ victory 47
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COMMERCIAL INITIATIVES FOLLOW
Commercial initiatives
are launched next to the
public ones, and try to
offer more flexibility than
public systems.

48. 1.3 The evolution of the bicycle industry 50 years after Eddy Merckx’ victory 48
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THE SOLUTION STARTS BY UNDERSTANDING THE BARRIERS

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AVOIDING THE HASSLE : FROM PRODUCT TO FULL SERVICE

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NETFLIX FOR BIKES

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SPRINT 4
THE NEXT RACE
Electronics and new interfaces

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ACCESSORIES CAGR OF 7%

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INFOTAINMENT SYSTEMS

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CASE : CONNECTED HELMET PROXIMUS

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CONCLUSION
THE BICYCLE ON THE ROAD AGAIN

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SPRINT 1
THE RACE TO PERFORMANCE
SUMMARY : THE EVOLUTION OF THE BICYCLE INDUSTRY
1969
2019
SPRINT 2
FROM PERFORMANCE TO EXPERIENCE
SPRINT 3
FROM PRODUCT TO SERVICE
Performance rules until it crosses the transition
point where technology delivers basic needs
Choose or loose : differentiate with a unique
experience based on segments and unmet needs
Evolving from bike ownership to bike ridership with a
big challenge to understand barriers to change the
behavior

57. 1.3 The evolution of the bicycle industry 50 years after Eddy Merckx’ victory 57
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performance
experience
service
Mechanical
Electronics
Software
Data
MyFutureProduct
EVOLVING VALUE DRIVERS RESULT IN NEW SYSTEMS AND BUSINESS MODELS
+
+
configuration
Data
Platform &
eco system
product
product
product/service
product as a service
business model
product
product/service
1969
2019

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TRACK 1
MyFutureProduct
Business model
Technology (IP)
User experiences
Mechanical
Electronics
Optics
Software
Data Advanced
interfaces
Services
Platform &
eco system

59. 1.3 The evolution of the bicycle industry 50 years after Eddy Merckx’ victory 59
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One group, five brands
Our services are marketed through 5 brands each addressing
specific missions in product development.
INTEGRATED PRODUCT DEVELOPMENT
ON-SITE PRODUCT
DEVELOPMENT
DIGITAL PRODUCT
DEVELOPMENT
OPTICAL PRODUCT
DEVELOPMENT