And by being a prime purveyor of scooters, go-peds, pocket bikes and mini-choppers, Pep Boys has encountered pockets of protest punctuated by televised picketing parents with bullhorns on the streets of Philadelphia and volatile hearings before government bodies.
These pocket bike opponents “are not fooling around” when it comes to applying regulatory pressure on the category, reports stock market analyst Derrick Irwin of Advest, Inc.
Critics cite safety concerns and complain that inexpensive price points target working class neighborhoods and encourage inappropriate use on dangerous urban streets and crowded sidewalks.
Others are exploring the jungle-land of confusing and contradictory regulations among puzzled jurisdictions dancing in the dark while wrestling with the complexities of the emerging issues.
Pep Boys is firmly in the fray, as are other aftermarket operations that carry the products, though they have no plans to drop their scooter lines, according to Bill Furtkevic, senior director of marketing and advertising. (“Scooter lines” is an overall term covering a wide “personal transportation” category of off-road motorized equipment and accessories.)
He emphasizes that every effort is made to educate purchasers that the scooters are for off-road use only. Warnings stating such are on every box and included in the print advertising, plus Pep Boys personnel are required to go over all precautions with the customer at the checkout counter.
Furtkevic says that the customers are ultimately responsible for operating the products legally and responsibly.
The company has enlisted former U.S. House of Representatives leader Dick Armey to defend its sales in Texas. The outspoken Republican has argued to Lone Star State licensing regulators that the scooters are in fact “toys” rather than “vehicles.”
Hard-hitting coverage has been rampant in media outlets nationwide — hammering on safety concerns and the proliferation of the devices on public roads.
But despite some bad publicity, the scooters just keep rolling out the doors at Pep Boys.
“A non-core product is really driving a big part of their (sales) strategy,” explains Irwin, the Advest analyst.
“It’s certainly an issue they need to watch very carefully,” says analyst Cyd Wilson of Whitaker Securities. He offers some points for aftermarket retailers entering this market to ponder as the scooter scenario unfolds: Is this going to drive traffic and new customers into the stores? Will it be enough to slow down sales? Could it be a passing fad?
“You may see Pep Boys realign their merchandise along those lines,” Wilson says, noting that the company also sells a lot of accessories such as helmets and kneepads.
“The pocket scooters are very popular,” he adds, but “if sales slow down they may bring in other transportation products that catch attention. They’re even selling those scooters used by senior citizens.”
This new fad might be a great market opportunity for the aftermarket, but retailers should just be aware of all the pros and cons before zooming into it.
