EDITORIAL – SEPTEMBER 2022
The Market Is Big Enough For Now
by Gene Muchanski, Editor
The Dive Industry Professional
Welcome to the September 2022 Editorial of The Dive Industry Professional. For many years now, September has been the month when the major suppliers in the diving industry launch their marketing programs for the next season. The logic behind a September Launch is sound and has paid off handsomely for many companies for at least the last twenty-five years, maybe even longer. A September Industry Launch works well for the supply side of diving equipment channels of distribution. For the diving equipment manufacturers, equipment sales agents, and retail dive stores, September is the best month to introduce, sell, and order new lines for the next diving season. Let’s review a few of the reasons why you need to be in sync with this particular seasonality curve.
The traditional recreational season for scuba diving and watersports in the United States is generally Memorial Day through Labor Day. So, while scuba instructors, dive stores and charter boats are busy teaching classes, selling diving equipment and taking divers on dive boat charters, their manufacturing vendors are putting together their new line of equipment for the next season. By August, their samples have arrived from their OEM’s and these Manufacturers & Distributors are conducting their annual sales meetings. On the day after Labor Day, while the dive stores are still active and hopefully blessed with a generous open-to-buy budget from the current season, the major manufacturing Reps begin calling on their accounts to show their new lines and take orders for the upcoming season. For the Retailers, this allows them to put their current inventory on sale (clearance) and begin merchandising and selling next-years line for the Holiday Shopping Season. For the Manufacturers, a September Launch gives them important sales forecasting data for the next season and ties up their Dealers open-to-buy budgets. This allows the equipment manufacturers and Sales Reps to focus on seminars, workshops and social events at the annual industry trade show, two months later.
As we enter the post-pandemic era in our industry, the concept of a September Industry Launch is more important than ever. The number one reason is a declining market coupled with increased competition to capture market share. Twenty years ago, our industry had 2,400 dive stores. This year we are lucky if we have 1,200 viable dive stores in the U.S. So, the wholesale market has been cut in half. Secondly, the number of divers has to be significantly less, considering the number of baby boom divers who don’t dive anymore because of age or health reasons. Also, in the post-pandemic era, our recreation is being challenged by government restrictions, travel restrictions and staffing challenges, resort destination closures, and supply chain shortages. People are diving less. So, with a declining market and increasing challenges, Dive Industry Professionals have their work cut out for them. But there is a silver lining in the clouds.
Back in the days of John Cronin, Dick Bonin, and Bob Gray, we had Dive Industry Leaders who knew that unity would create a more manageable small niche market within the larger sporting goods market. They were Entrepreneurs and they knew that the industry had to be united to develop a large concentration of qualified retail buyers so they could meet in one place, at one time, to maximize sales and communications. They knew that having a smaller number of exhibitors at a trade show with a higher percentage of divers would be more successful for them than having a larger number of non-diving exhibitors and a lower percentage of divers at a National Sporting Goods Trade Show. They were spot on. I remember my first DEMA Show in 1982 in San Antonio, Texas. With only 182 Exhibitors but a high concentration of qualified retail buyers, the market was big enough and the show was successful for both exhibitors and buyers. We can do that again if our industry leaders would embrace the concept of unity.
Now I’m going to tell you about the mistakes that are happening in our industry today. Our industry is more fragmented than it has ever been. Some of our manufacturers have broken away from our united niche market and have tried to isolate a small sub-niche market for themselves. This tactic actually costs them more and brings them smaller returns. Some have even cut services and communications to their dealer base in hopes of selling directly to the consumer. To justify a larger marketing expenditure for diminishing returns from a declining niche market, these companies are giving up on more profitable trade shows, consumer dive shows, regional sales events, and most importantly, loyalty from their dealer base. As face-to-face marketing events try to make a come-back after the pandemic, we must not fall into the trap of spreading our marketing budget too thin, in hopes of picking up a small percentage of a non-diving events total market share. This is another mistake being made by companies who are conducting marketing efforts in unfamiliar markets. These critical errors in judgement may very well stem from the hiring of recent company management, who are not entrepreneurial in their thinking, but rather hired employees with little to no knowledge of the recreational diving market.
So, the silver lining in the clouds of uncertainty is that unity works and isolation marketing doesn’t. It’s easy to see what some companies are doing and realize that many will either fail to attract a sufficient market share, or they will go broke trying. For you, that is a good thing. For them, not so much. The market is big enough for now and we can capture a sufficient market share to succeed and grow. Yes, in this post-pandemic period, our advice is to circle our wagons and go after the bulk of the market that is centering around our common recreational activities. The best thing we can do at this point is to recommend that each dive business focus on marketing to their active current customers. This should bring in the most results from the least efforts and resources. If you are in need of additional market share, we recommend you next focus on recapturing your former customers, who have not purchased from you in the past 12 months. Find out why, and then create a strategy to reactivate them into current customers.
The third part of our plan is to prospect for new customers. Prospecting for new customers is the most costly and time consuming marketing. This is the part that is best done in unison with your regional diving community or your diving trade association. Our industry must encourage regional consumer dive shows again and support them. Regional dive shows have a higher concentration of divers per attendee. The cost to participate is small in comparison to the possible returns. Non-diving shows such as travel shows, boating shows, and outdoor shows are not cost effective for individual companies due to high booth prices and low diver concentration of attendees. They may be cost effective on a shared basis when your trade association represents your local diving community on your behalf. That is where the concept of unity will pay off for our industry.
And a final word of advice from our forty years of marketing at trade and consumer shows. A face-to-face show or event is a market that is temporarily created to bring buyers and sellers together. It is the responsibility of the show producer to do everything possible to bring as many buyers and sellers together as possible. It is not the responsibility of the sellers to bring their current customers to the event. If they could do that, they would not need the venue producer, they would simply invite their customers to visit them at their location. Trade and consumer shows are where we meet new customers. We vote (support) with our time, money and manpower where there is an opportunity to increase our revenue and our market share. The Surf Expo has two full-time staff members whose job is to visit Watersports Dealers and encourage them to attend the Surf Expos. Attendance at Surf Expo for qualified Retail Buyers incidentally, is free.
So, as we enter into the beginning of a new recreational diving season, let us focus on serving our current customers, recapturing our former customers and actively prospecting for new customers. The size of the industry’s current market is sufficient for now, to make many of our Dive Industry Professionals very successful. How many? That remains to be seen, but the likelihood will get increasingly better as we learn to prospect for new customers to add to the total market, as we learn to compete to capture a larger market share for ourselves. I’ve always said that it is easier to increase the size of a market then it is to compete over a declining market.
For more information on attracting and selling to Dive Industry Professionals, contact Gene Muchanski, Executive Director, Dive Industry Association, Inc., at firstname.lastname@example.org or call me at 321-914-3778.
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