A recovering economy holds a promising future for the portable spa industry.
As people continue to accumulate more disposable income, they once again will look to spend on luxury items. However, competition for those discretionary dollars will continue.
PSN spoke with several portable spa manufactures to uncover emerging trends, including areas for growth and potential challenges. For hot tub makers and retailers to thrive in the post-recession economy, they need to pay closer attention than ever to what consumers want when it comes to buying and the user experience.
Only the strong survive
Following the downturn and recession, many manufactures and dealers were shuttered. In fact, the number of spa manufactures was almost cut in half, according to industry research firm IBISWorld: Between 2006 and 2013, the number of producers dropped from 100 to 56.
But, as PSN reported in 2013, this is when the sector began to enjoy a rebound. IBISWorld reports that the remaining 54 U.S. hot tub manufacturers saw annual growth of approximately 4.8 percent from 2011 to 2016.
With the dust settled, many portable spa manufacturers have noticed more stability in the industry compared with five years ago.
“Some of that is because there are fewer players both on the manufacturing side and the dealer level,” says Kevin Richards, vice president of sales and marketing at Master Spas in Fort Wayne, Ind.
Those left hold a healthier market share, but must continue to innovate in order to grow, manufacturers agree. While the market is recovering, it doesn’t guarantee every company will adapt to new trends and survive.
“I believe that there will be continued consolidation in our industry, says Kristin Woiteshek, chairwoman of the International Hot Tub Association. “There is also always increased competition from foreign markets.”
Walking the generational line
Baby boomers are heading into retirement at the same time many millennials are entering the home buying market. Both generations provide opportunities for hot tub sales. However, there are some differences in how they buy and what they expect from a product.
For instance, they respond to different messages. “Most marketing of consequence in this industry is in digital communication on the internet and social media,” says Jim Johnson, vice president of marketing at Marquis, in Independence, Ore. “So delineating the messages for boomers versus millennials is mostly related to tweaking the imagery and language as you engage them on the web.”
Consumers are starting to view hot tubs as more of an aid for improved health. As boomers age, they face arthritis and other physical ailments. Organizations such as the Arthritis Foundation advocate warm water soaking and underwater exercise as beneficial for people with different forms of arthritis.
“Our biggest challenge is also our biggest opportunity — helping more people understand the health and wellness benefits of hot tubbing,” says Shelly Roberts, brand manager at Caldera Spas, based in Vista, Calif.
While boomers are interested in maintaining a good, healthy quality of life, Richards believes the industry could do a better job capitalizing on this. “I’m not sure our industry overall is doing its best to reach out to that segment,” he says. “I think we have a lot more opportunity to get more than we are.”
Of course, millennials respond to another aspect of ownership, having grown up using computers and smart devices for a large part of their lives. This generation expects a higher level of technological capability in most items they purchase, particularly in the area of automation.
“In working with the millennials, you must stay ahead on technology, whether it’s with the product, ease of communication, or the shopping experience,” says Woiteshek, who also serves as general manager at Nordic Hot Tubs in Grand Rapids, Mich.
In response to this sensibility, Jacuzzi has begun offering applications with remote functionality and monitoring. For example, its ProLink application sends an email to the user when the spa has an error. “The rise in ‘smart products’ is a trend that hasn’t skipped over our industry,” says Tracine Andrus Marroquin, vice president of product marketing at Jacuzzi. “Consumer expectation is that their hot tub is accessible from their smart phone.”
Boomers and millenials meet in the middle when it comes to the issue of maintenance. People want to enjoy the therapeutic and health benefits of their spas without putting in a lot of work to maintain them.
Even second-time hot tub owners who better understand the maintenance requirements of owning a spa, are drawn to features that reduce maintenance work, says Jody Gamracy, marketing manager at Arctic Spas in Thorsby, Alberta, Canada.
Because of this need for reduced maintenance, Strong Spas has seen an enthusiastic reception of its hard covers. “It’s one of the big selling points of our products,” says Wade Spicer, owner of the Northumberland, Pa.-based producer.
For the technically savvy, he said, the company also plans to offer automated covers that open via remote. And it is improving an auto-alert maintenance system in which hot-tub sensors notify a call center when a repair is needed. The call center can then contact the customer to schedule an appointment.
Mastering the great outdoors
The outdoor living trend continues to be hot with no signs of slowed growth.
According to Freedonia Group, an industry market research firm, demand in the United States for outdoor furniture, heaters, and other accessories is on track to rise 3.7 percent per year to an estimated 9.1 billion in 2019.
This trend shouldn’t be ignored by those selling hot tubs. Consumers want the whole package, which means they’ll be looking to incorporate a hot tub into a cohesive outdoor design. “Consumers really like the idea of the spa being integrated into the backyard project,” says Timothy Martin, director of new business development, Fox Pools in York, Pa.
To answer this need, his company is offering more shells meant for inground installation, and including all the jets and other features that can be found in a portable spa.
Plopping a portable hot tub into a backyard without responding to the landscaping and other outdoor living features will no longer fly.
“Our research indicates that hot tub consumers are looking for more than just a ‘box of water’ in their backyard,” says Tracine Andrus Marroquin, vice president of product marketing at Jacuzzi. “They want a product that matches the overall aesthetic of their yard and the styling decisions they have applied to their landscaping and home exterior and patio décor.”
Dealers and manufactures who do this well — whether by forming partnerships with design professionals or staffing personnel with backgrounds in that discipline — can position themselves as key players and capitalize on the trend.
Catering to consumers
The internet has definitely had an impact on the way people shop and gather information from a brand, but customer service and buying experience are still very important.
“Online reviews are having an influence on which brand is deemed trustworthy, as shoppers look to spa owner feedback to help reinforce their decisions,” Roberts observes.
Manufactures seem to feel there are still two sets of consumers: those who purchase based on price alone and those who value quality. The latter group will want to learn about their options and the differences between high-end and low-end products. They’re also more likely to seek out a professional who can guide them toward the product that provides the best value for their needs.
To grab these consumers, companies will invest more effort into customer service and the consumer’s perception of the industry in the next five years, predicts Shannon Knaub, spa sales and design at Diamond Spas in Frederick, Colo.
The goal of appealing to the quality-minded consumer also is where good salespeople and retail showrooms will play a role.
“Baby boomers, even though they’re internet savvy, still like to come in and see items before purchasing,” Spicer says.