Late last year, members of the Northeast Spa and Pool Association formed a task force to develop ways to support brick-and-mortar stores as they square off against the Internet.
The idea wasn’t to drive online-only retailers out of the
pool and spa industry, but rather to “find a way that we can
all exist,” says Chris Lightenburg, northeast sales director
for Garrett Liners, in Morrisville, Pa., and a member of the group.
“This is an opportunity, not a crisis — I think
that’s the way that everybody needs to look at this,”
adds Lightenburg, who used to head a buying group designed to help
independent pool and spa companies better compete with Internet
According to the U.S. Commerce Department, total e-commerce sales
for 2009 were $134.9 billion, representing a 2 percent increase
from 2008. By contrast, brick-and-mortar stores saw retail sales
drop 7 percent in 2009.
What’s more, online retail sales in the U.S. are expected to
top $141 billion in 2010, a 7.5 percent increase over 2009 figures,
according to eMarketer Inc, which provides research and trend
analysis of digital marketing and media.
In the pool and spa realm, some products are a natural fit for
e-tailing — toys, for instance, which are easily shipped and
require no follow-up service. But consumers today are purchasing
bulkier, more service-intensive items that require professional
installation, such as pumps and filters.
And that’s where the real hardships are felt. While most
retailers understand the need to move product, many still would
like to see manufacturers better recognize the value of their
“We honestly feel that we built this industry,” says
Irene Insignares, owner of Cool Pool & Spa in Nanuet, N.Y., who helped
form the NESPA task force. “And I need support from the
manufacturers and distributors.”
So what are retailers doing to combat the Internet pricing
phenomenon? And what can manufacturers and distributors do to help
alleviate the pressures brought on by Web-based sellers?
Dale Howard estimates 20 percent of his higher-end product sales
are being lost to online-only retailers.
But what’s worse are the complaints he gets from customers
about his prices — some of which are more than 25 percent
higher than those found on the Internet. As a result, the owner and
president of B&L Pools, a five-store operation in Phoenix, is
losing patience with manufacturers that offer deep discounts to online vendors.
“I’m done trying to sell products that I’m going
to get hurt on,” Howard says. “And I won’t
promote products I’m going to lose customers on because the
pricing is so different.
“These dealers shouldn’t be able to sell products for
below my cost and still make a profit,” he adds. “When
it starts getting into significant dollars, even your best friend
will go to the Internet.”
Howard’s solution, like so many other retailers faced with
similar dilemmas, is to align his business with suppliers that
closely monitor their MAP, or minimum advertised pricing, programs.
“You just try to make it known to manufacturers that this is
key to keeping those relationships,” he says.
“Otherwise, it could be the end of mom-and-pop retailers.”
Kelly Reed agrees. The operations manager at Contemporary
Watercrafters in Gaithersburg, Md., will sometimes offer a
discount to a customer who approaches her with an Internet price
that’s 10 or 20 percent below her own.
“But when there’s a 50 percent price cut, you have to
let those sales go,” she says. “It’s really hard
when you get a longtime customer who wants it that much
As a result, she tends to favor manufacturers that offer better
pricing or warranties to traditional retailers over online-only
Along those lines, some retailers would like to see manufacturers
offer special programs and incentives for brick-and-mortar clients
who service their products. This would translate into a different
product line for mom-and-pop stores, who can then market the
special features and prestige of those items.
Indeed, after-sale support is directly linked to customer
satisfaction, says Kathleen Carlson, senior vice president of sales
and marketing at Aqua Quip in Seattle. She cites recent research
indicating that 50 percent of hot tub owners would not buy a spa
again, largely because of poor follow-up and warranty work, both of
which are virtually nonexistent online.
“If it wasn’t for the support from specialty retailers
would we have people happy with our products at all?” she
says. “If it’s a new product, who really lets the
consumer know about it? It’s the specialty retailer.
“Manufacturers have tried to pull product through this
industry,” she adds, “but those that work with the
specialty retailer find much better success.”
Bypassing mass merchant or Internet sellers would create added
excitement among staff, she explains, “and we are that much
more loyal to the product. The end result is that we sell a lot,
and the wholesaler and manufacturer make money.”
Howard agrees that in-store support of various product categories
— pumps, heaters and filters, to name a few — is
crucial. The absence of brick-and-mortar backing, he believes,
means consumers may not grasp the benefits of high-efficiency pumps.
“People are doing their research in the store, and then
turning around and buying it online,” he says.
So there’s a direct correlation, he explains, between a
successful brick-and-mortar industry and the marketing and sales of
brand-name products, though it may not be readily apparent.
“[Certain manufacturers] are moving a lot of product online
that’s getting recommended in stores,” Howard says.
“Without that, cheaper products from China, for example, are
going to take over. The Internet industry for pool products is
starting to trend toward those look-alikes that don’t
“When people really start getting burned, the pendulum may
swing back to brick-and-mortar, where you get a true sense of the
look and feel of the product,” he adds.
It’s a complicated subject, to be sure. Manufacturers and
distributors aren’t likely to cut off the Internet channels
because, quite frankly, they’re moving product.
But, some argue, the products would still move even if they
weren’t offered online.
“Without the Internet, the product is still going to get
sold,” Howard contends. “All this does is allow them to
be sold at a lower price.”
Take the Big Green Egg, a popular grill that’s provided steady sales
for pool and spa retailers. The product’s manufacturer
strictly prohibits mass merchandisers from carrying it, restricting
those channels to specialty retailers.
And when the policy is violated, the manufacturer is quick to respond.
“When the economy started going south, a retailer apparently
sold them to Sam’s Club, because it popped up online,”
says Steve Bludsworth, owner of All Pool Service & Supply in
Orlando, Fla. “The Big Green Egg folks went nuts. They just
refuse to sell to mass merchants.”
This strategy has worked in other industries. For instance, shoes
and clothes often sell on the Web for roughly the same price as in
“What happens with fashion, shoes and textiles is you often
depend on your retailers, so if they learn you can buy the products
at a discount [elsewhere], they may stop pushing that
product,” says Lars Perner, an assistant professor of
clinical marketing at USC’s Marshall School of Business.
“So those brands then become very dependent on the goodwill
of the full-service retailers, and they’ll do a lot to crack
down on the low market prices that are available online or by
Carlson maintains that manufacturers and distributors should follow
the lead of other industries in channeling their products.
Suggesting it can’t be done, she says, is “just an
“It is not an easy thing to fix and make right for everyone,
but it can and should be done,” she says. “Not just for
the specialty retailer, but for the industry.”
Rebecca Robledo contributed to this story.