Companies in the battery-powered scooter market are expanding their product lines and offering a wider range of prices. This strategy is a result of increased competition, limited Medicare reimbursement and consumer demand for product variety and more affordable prices.
About 20 vendors sell scooters in the United States through durable medical equipment dealers, direct sales to end-users or a combination of the two channels. Scooters are available for indoor and/or outdoor use in various designs and weights. Some vendors are selling four-wheel units for supermarket and department store shopping, a niche that more vendors will try to pursue. List prices range from about $800 to $4,000. An extensive list of scooters and their features appears in the June 1992 “Mobility Focus” supplement to Homecare magazine.
The primary end-users are elderly people who have difficulty walking long distances. The over-65 population continues to grow and thus will increase the potential candidate pool for scooters. The U.S. Census Bureau projects that there will be more than 35 million people over age 65 by 2000. Other customers include people afflicted with muscular diseases, such as muscular dystrophy and multiple sclerosis, people who have suffered heart attacks or strokes, or people with other conditions that limit their mobility. There are an estimated 43 million disabled Americans.
The companies named most often by scooter suppliers as the major players in the market (in terms of volume) include Ortho-Kinetics Inc., Waukesha, Wis; Amigo Mobility International Inc., Bridgeport, Mich.; Electric Mobility, Sewell, N.J.; Pride Health Care Inc., Pittston, Pa.; Leisure-Lift, Kansas City, Kan.; Fortress Inc., Clovis, Calif.; and Bruno Independent Living Aids, Oconomowoc, Wis.
Invacare Corp., which now has a small share of total scooter sales, is predicted to become a strong contender over the next few years. It has two scooters on the market–Tri-Rolls, which lists for $2,700 and Tri-Scoot, which lists for $1,700. The Elyria, Ohio-based company is the country’s largest supplier of home medical equipment.
“The scooter market is in our field,” said Hymie Pogir, Invacare’s vice president of marketing. “It makes sense to exploit it as best as we can. We see scooters as a long-term commitment.”
Market is growing
Suppliers’ estimates of the size of the U.S. scooter market range from 45,000 units to 65,000 units.
Invacare estimates that 50,000 to 60,000 units will be shipped by the end of 1992, translating into a $60 million market based on an average scooter price of $1,200. Annual growth is predicted in the 5% to 10% range. Frost & Sullivan Inc., a New York-based market research firm, places the dollar value of scooter sales in 1992 at $114.5 million, with projected annual growth of 8% through 1996. Sales in 1996 are forecasted to reach $151.3 million.
Barriers to entry in this market include restricted Medicare reimbursement, a depressed economy that reduces consumers’ TABULAR DATA OMITTED disposable income and solid manufacturer/dealer relationships, which will make it difficult for a new player to get visibility. “When a new product is introduced, there has to be a significant incentive for us to walk away from a product we have a commitment to,” said Randy Brooks, general manager of The DME Shop, Naperville, Ill., one of the largest scooter dealers in the Chicago area.
The strongest barrier, according to Pogir, is the cost to promote and support the product. “The scooter is not a great technological feat, but it takes a great deal of money to market it,” he said.
Consumers base their purchasing decision on a variety of factors, including quality; price; maneuverability; ride and comfort; safety; hand control; maintenance; and customization, according to one leading supplier. Dealers select a vendor based on price, quality (features and function), service availability and product availability in that order, the vendor said.
The DME Shop says it looks for product features that are innovative and/or not available on competing units, pricing, whether it has a long-term relationship with the vendor, vendor support and the methods the vendor uses to promote the product.
The DME Shop carries scooters from Ortho-Kinetics, Amigo, Invacare, Pride, Bruno and Ranger All Season Corp., George, Iowa. Brooks believes that Ortho-Kinetics and Amigo are the leaders in product dependability and availability, meeting shipping commitments in inventory and parts and providing technical support.
The company had $14 million in retail sales in 1991 and just under $10 million in revenues. Amigo is projecting fiscal 1992 revenues of $12 million and retail sales of $17.6 million. It has a 10% to 12% share of the scooter market, the company said.
Sales have been growing between 15% and 20% this year and Amigo expects to sell about 5,000 units by year-end, according to Mitch Reno, director of marketing and advertising. Amigo would like to slow down this growth, he said, to the 5% to 10% range.
“You need to balance every part of your company and you have to make sure that training and service are kept up. Our production facility also needs to be expanded.”
During the past five years, the company has had periods of both slow and strong revenue growth. In the mid-1980s, a dozen competitors entered the market and Amigo’s revenues fell, Reno said. After 1987, revenues started to rebound.
The growing elderly population has had a strong impact on Amigo’s sales, Reno said. His research indicates that 20% of the over-65 age group has the disposable income to make a scooter purchase.
Another potential boost to scooter sales is the Americans with Disabilities Act, which became law earlier this year. The ADA prohibits employers from discriminating against job applicants who are disabled and requires new public transportation vehicles and public places to be accessible to disabled people. The law, Reno said, may prompt corporations to offer accessibility vehicles to their employees.
Amigo sells its scooters through several channels: a franchise organization of a dozen mobility centers; 600 home health care dealers; and some 200 direct sales reps, many of whom are Amigo scooter owners. These Amigo owners provided the means for distributing the product when the company was started. Amigo also has a commercial and international division.
International markets in the Far East present promising opportunities for scooter sales, according to Amigo. Its vehicles already are sold in 22 countries. The company has just begun marketing its scooters in Japan, Hong Kong and South Korea and has set up its newest distributorship, Amigo of Korea.
Promoting the products involves exhibiting at trade and consumer shows and advertising in trade and consumer publications. The shows include the Abilities Expos, home health care meetings and international equipment exhibitions. Advertising has appeared in Homecare, Home Health Care Dealer, Independent Living, Accent on Living, Mainstream, Inside M.S., Paraplegic News and others.
Amigo also puts out a magazine for its Amigo owners called Friendly Wheels and gives them monetary awards for product referrals under its “Gold Program.”
Customizing scooters is how Amigo primarily differentiates its products, Reno said. The company also provides a three-year warranty and a 24-hour service hotline.