Every year, manufacturers in the hot-tub industry showcase a new array of products for the end user — from sleeker, more energy-efficient tubs, to covers, accessories and chemicals — all designed to make a long, hot soak that much more enjoyable. And while it would be nice to carry all of the latest products to entice your store patrons, the reality is that most retailers don’t have Costco-caliber showroom space to fill.
Each square foot of linoleum must contribute to the bottom line, and the inherent girth of hot tubs makes it even more important for retailers to find the right product mix for their stores.
To help determine the right product mix, we’ve consulted some heavy hitters in the hot tub industry to find out how they created their magic mix.
Take a Look Back
It’s true: Many times, you have to look back in order to move ahead. In formulating the mix of items to showcase in any of Olympic Hot Tub’s five Washington-state locations, President Don Riling tours each store with his sales manager at the beginning of the year. They examine what was sold in each location, then map out which products the stores should carry based on the popular sellers of the previous year.
Retailers also can make their yearly assessments using Key Performance Indicators. KPIs help measure the progress of a business in a variety of different areas (retail sales, customer service, etc.). Profits, for example, are a type of KPI, but retailers can break down and track the elements that create profits, such as Transactions Per Day and Average Monthly Sales, to get a better overall picture of how their business is performing.
Dennis Marunde has used the Sales Per Square Foot KPI to enhance various categories in his stores, including hot tubs. “Of course manufacturers would like you to have every single model on the floor,” says the president of Crystal Lake, Ill.-based Arvidson Pools & Spas. “But if one type of tub isn’t getting any attention from customers, it needs to be replaced with a model or brand that can generate some cash flow. I’m looking to have the most products on the floor that gives us the best turnaround.”
This does not, however, mean that every show floor is just one big carbon copy of last year’s hot sellers. For example, if a particular shell color moved well last year, customers would not walk into the store and find a sea of hot tub shells that are all in the same color family.
“I try to have a representation of all the shells on the floor, regardless of what the sell-through is for our company,” says Riling.
He recommends that retailers put at least one or two shell colors on display that have proven popular. But he also features at least one textured option for people who don’t want a high shine or slick finish.
The texture encourages shoppers to touch the tub, engaging their tactile senses and possibly impacting their buying decisions.
But what if you’re just starting your business and have no “last year” product mix to compare against? Then go to the experts, says Jessica Harkins, co-owner of TLC Outdoor Living in Katy, Texas.
When she first opened her business two years ago, she leaned heavily on product-mix recommendations from her hot tub sales representative. She also talked to other regional retailers who sold the same brand of hot tubs and clued her into the types of products that were big sellers in the area.
Neighborhood Analysis
To ascertain which hot tub products will work for your clientele, Marunde says, you also must develop a feel for the neighborhood — who’s in it and what types of products they are more likely to purchase.
A neighborhood’s inhabitants, along with their financial circumstances, can change annually. To keep track, Marunde sends online surveys to his database about every five years. They’re sent via the online platform Survey Monkey. They also are conducted in-house or in conjunction with interested manufacturers.
The questions are designed to seek out the “unarticulated needs” of customers, Marunde says. Instead of merely asking questions about which hot tub models and brands consumers prefer, the survey includes questions about their lifestyle. For example, if many customers in a particular neighborhood reveal that they’re spending more time at home, would like to entertain more, and wish that they’d purchased a larger hot tub to accommodate friends and family, Marunde might carry larger hot tubs in the location nearest that neighborhood.
In fact, when respondents revealed that they wished they could use their pools year round or that they had larger pools for lap swimming, it helped reinforce Marunde’s decision to carry swim spas.
The surveys also have a section where customers can freely type their responses. And when many of them explained that they were unsatisfied with their backyard design or the position of their hot tubs, Marunde decided to start offering in-home consultations.
“We find the [essay-type question] extremely valuable, because they’re taking time to give us insights that we didn’t think about,” he says.
Trial and Error
Mathematics has its place, but sometimes retailers must dive in and put a product on the show floor to see if it will gain any traction.
Even though Riling knows what products sell, he will occasionally “throw a wild card in” if a manufacturer releases an interesting new product line. He’s also experimented with hot tub accessories. He initially put wireless televisions in all five of his showrooms but, after slow sales, ultimately determined it was better to display them in only two locations.
This method has also worked for Marunde. He likes to fill 10% of the show floor with products that are new that year. While not every new, untested hot tub product is a hit, he plans to continue to use this trial and error method for the foreseeable future.
