He that wrestles with us strengthens our nerves and sharpens our skills. Our antagonist is our helper.”
— Edmund Burke, 18th Century Irish statesman, author and philosopher
“This industry has a culture of internal competition, not a culture of growing the overall market.”
— Thomas Lochocki, Ph.D., CEO,
National Swimming Pool Foundation , Colorado Springs, Colo.
One might think the loss of a major competitor would be cause for a spa retailer’s celebration.
But for a number of reasons, dealers today tend to be less-than-overjoyed when a fellow player in the hot tub market is forced to curtail or shutter the operation.
“Competition is good because it forces you to sharpen your skills and your knowledge base,” says Randall Glaske, president and owner of East Texas Spas in Tyler, Texas. “And it keeps me motivated to stay on top of the latest trends and ideas.
“It’s always bad when a good competitor goes out of business.”
To be sure, the philosophy doesn’t apply across the board since all businesses aren’t created equal. The here today, gone tomorrow peddler of low-quality spas is rarely welcome in any market. And many home show and tent sale merchants often promise consumers what they can’t deliver.
But the loss of a strong dealer with an established presence can have a negative impact on nearly any product category, particularly hot tubs. By contrast, robust competition can be healthy, even profitable, in a number of ways. Here, a handful of savvy retailers share how they use it to their advantage.
The Pacific Northwest is hot tub country. As such, the area has a select few spa dealers that are considered among the best in the industry.
Strong competition in the marketplace drives awareness, says Brian Quint, president/CEO of Aqua Quip in Seattle. And that often prompts consumers to shop.
What’s more, Aqua Quip’s nine locations typically attract a higher-end clientele for hot tubs, he says. And those customers frequently will visit two or three different retailers before making a decision.
“They’re going to do their research,” he says, “and we’re certainly going to get a percentage of that traffic.”
At Springs Spas in Colorado Springs, Colo., vice president Tammi Stuart believes any added consciousness for the category is positive.
“The number of homes that have spas is relatively few,” she says. “It’s not a very absorbed market. So anytime you can get people thinking about the product, it’s a good thing.”
The loss of a strong competitor, according to many dealers, also typically results in less advertising. That’s particularly bad, they say, because it takes the category — which is traditionally a “want” item as opposed to a “need” — further out of the public consciousness.
“You all ride the wave,” she says. “When people are advertising, it gets consumers out and shopping. But nobody really is advertising right now.”
It’s a similar story for Acrylic Spas of Arizona in Phoenix. The world’s largest dealer of Jacuzzi hot tubs has seen 75 percent of its statewide competition evaporate in the past three years.
The four-location dealer now accounts for nearly a quarter of all spa stores in Arizona. And while president Roger Abdin is pleased with his company’s market share, which he estimates at upwards of 40 percent, he remains wary of the state of that market.
“I never wish anyone to go out of business,” he says. “In fact, I’ve always liked that competition. I welcome a challenge. But now nobody’s advertising — they’re just existing. And when you don’t have that advertising, it doesn’t stir the market.”
Raising the standard
Stiff competition tends to raise the bar for all players.
Take Quint. As spa sales become threatened by a soft economy, the management at Aqua Quip has adopted a new approach. Launched this year, the program is called Best Foot Forward, and it follows the theory that each sales opportunity deserves the strongest probability of closure.
Every month the company identifies its top salesperson for each location. So when a couple walks into, say, the Bellevue store, the No. 1 sales associate greets them and tends to their needs.
“It’s based on no sharing of traffic,” Quint explains. “Every sales prospect that comes through the door gets the best salesperson available each time.
“These days you just can’t afford not to turn every opportunity into a sale.”
But what if the top seller isn’t readily available when a customer walks in? Say he is back in the water-testing department.
Another sales associate will find and relieve No. 1 and dispatch him to the incoming shopper.
It’s very deliberate, Quint says, and it keeps the staff focused on the primary goal, which is the store’s success.
“Plus, it should also enhance the shopping experience for the customer,” he adds.
Competition is a motivator for Abdin as well. He knows the day will come when spa retailers re-inhabit his area. And he’s preparing for it.
For example, when the Cal Spas dealer serving the Phoenix market went out of business a year and a half ago, Abdin took action.
That manufacturer, he says, was now available in his territory.
With competition in mind, he added the brand to his already robust line of Jacuzzi tubs. And that price-point has proven attractive to today’s spa customer, he says.
“So we’ve not only picked up the Cal Spas line,” Abdin says, “but we’re not going to have to go up against [that brand] when the economy does come back.”
ABC Pools & Spas in Baltimore has occupied the same location for 55 years. The mom-and-pop store is surrounded by competition, including a Leslie’s Swimming Pool Supplies a mere 500 feet away.
Another nearby competitor is Namco Pool & Patio Equipment. But Namco doesn’t carry much in the way of aftermarket products, which makes for a nice synergy between similar businesses.
“Their primary goal is the initial sale,” says Dawn Danik, ABC’s general manager. “They usually send their customers to us when they need things like chemicals, parts, jets, pillows — anything they don’t carry.”
It’s a philosophy Danik has come to embrace herself. And it’s proven to work both ways.
“A good competitor gives the customer options that you might not have,” she says. “And they should refer you elsewhere if they don’t have what you’re looking for.”
After all, she reasons, positive referrals reflect well on the party making the recommendation, too.
A good rapport also can benefit competing stores’ marketing efforts. When Danik knows what products are on sale down the street — chemicals, for example — she can run promotions on other items like, say, test kits.
“So everyone gets a piece of the pie,” she says.
This summer the Association of Pool & Spa Professionals indefinitely shelved its nationwide Hot Tub Industry Growth Initiative.
On the books since mid-2007, the promotional/educational campaign had sought to provide a jumpstart for lagging spa sales. Despite its fate, the initiative did reveal some telling information on the state of the consumer hot tub market.
Its findings included a target audience of nearly 17 million U.S. households with at least some likelihood of buying a spa. And it determined that vacations, home furniture and flat-screen TVs were most likely to compete with hot tubs for shoppers’ attention.
“People have to realize that it isn’t always the dealer up the street that’s the competition,” says Lauren Stack, director of public affairs and industry promotion for APSP in Alexandria, Va. “The key is getting to the consumers who aren’t already thinking about hot tubs.”
An approach that includes pooling resources, she adds, can push a more positive message and help elevate the category “beyond yell and sell tactics.”
Dealers have discussed holding home shows and joint tent sales to both counter those in existence and lend credibility to the industry. And Quint recently wrapped a yearlong co-promotion with a fellow dealer for the NSPF-published Hot Water & Healthy Living book on the health benefits of spas.
Again, Stack notes the importance of seeking out potential customers “rather than expecting them to come to you.”
She says retailers could join forces at charity events or local gatherings, “where you’re not just hawking your wares, but actually being there as a service to the community.”
“You can draw positive publicity from those types of things,” she adds, “and offer up the collective as a source of that publicity as opposed to just one dealer dominating the limelight.”