IN MY VIEW
Understanding And Adapting To An Ever Changing Market
A WELL-KNOWN AND RESPECTED INDUSTRY FIGURE, TONY WELSBY IS MANAGING DIRECTOR OF SPA CREST EUROPE LTD AND IS A PAST PRESIDENT OF THE BSPF. HERE HE SHARES HIS THOUGHTS ON THE CHANGING HOT TUB SECTOR AND THE OPPORTUNITIES THAT STILL EXIST
T
he past few years have, needless to say, been very challenging for the industry, so when you’re asked to put some words together at the end of one year and ahead of the coming season, you can naturally tend to take stock of the negatives. But whilst we’ve had some real issues to deal with, I feel that there is still much to be positive about.
Despite all the challenges, there is still a lot of opportunity out there, but to exploit it most effectively the industry needs to understand and adapt to the things that have changed dramatically in the market over the last five years. First of all, it’s important to identify where those opportunities lie. Due to the effects of the economic crash, it means that a significant chunk of the potential market we had pre-2008 are no longer in the market. Those people were working and lower middle- class asparitional – type buyers – often impulse buyers - who wanted to buy lifestyle enhancing luxury consumer products and whose spending was based on high levels of confidence in the security of their jobs or businesses, easy access to credit and the promise of ever rising property prices. It is this sector of the population which was probably the biggest driver of growth in the industry in the early to mid 2000s. However, that part of the market has largely dried up now, due to job insecurity, no more easy credit, rising living costs and a dramatic squeeze on disposable incomes. Because of this we have seen a definite polarisation and gulf in the market.
At one end, there are buyers who are made up of those who are still desperate to own a spa, but are simply constrained, no matter how much they may wish to own a better spa, by the little access they have to money; and those who only buy on price and pay little or no attention to overall value. These buyers tend to be attracted to internet suppliers importing product from the Far East who just want to get ‘a spa’ and pay as little for it as possible. Competing in this end of the market is
fine, but is very precarious as costs of doing business are still very high, margins tend to be thin and therefore in order to stand a chance of being profitable, volumes need to be high. This then means that you need to generate lots of customers nationally, which means that you need to generate many more enquiries nationally which is also a relatively high overhead. Therefore you are targeting a customer who is fickle, has no brand loyalty or allegiance and who is going to disappear immediately when someone else enters the market who undercuts you. Needless to say, selling a high quality, high performance, incredibly reliable product that is still hand-built in the States, Spa Crest are not in that market, and nor do we seek to be. Our sights are firmly focused on the other chunk of the market and the larger chunk in our view, who are still buying. Buyers who are more confident about spending, discerning,
“THE INDUSTRY NEEDS TO UNDERSTAND AND ADAPT TO THE THINGS THAT HAVE CHANGED DRAMATICALLY IN THE MARKET OVER THE LAST FIVE YEARS”
88 April 2013 SPN
are not as affected by a poor economy, do aspire to improving their health and lifestyles and to buying products which help them do that. They do have access to money, do not base buying decisions purely on price and are prepared to pay extra, sometimes significantly so, to get exactly what they want and who expect much higher levels of personal service. However, the way customers also consume information and make buying decisions has also changed hugely and we have to work a lot harder these days to win sales as they require much more information and much more hand-holding from people they trust and who they feel know what they are talking about. This has been brought about by the economic changes which has made everyone that bit more careful these days when they do spend, and massive changes in technology and the way consumers respond to advertising messages, which has required new attitudes and strategies in marketing for new customers, and an acceptance that things which may have worked in the past don’t any more. We know this as we have paid much attention to this within Spa Crest Europe over the last couple of years. We’ve always had a fantastic product that we’re very proud of and, we’re told by our dealers, superb customer service. But this is only any good if people know about it. So we’ve radically adapted the way we market our business and build our relationships with the trade. Our Brand2Go initiative of giving the trade access to their own brand spa range supported by high quality marketing materials has been a part of this, but it’s gone much wider than that. It’s been hard work, frustrating at times, but we are happy to say we’ve definitely seen the results bear fruit.
The benefit of this has also made us better at pro-actively helping existing and new dealers do the same and we’re working more closely with them to pass on our experience, help them play to their strengths and ultimately to generate more enquiries and sell more product.
All reasons to be cheerful, no matter what happens with the weather or the economy! SPN
Spa Crest Europe Ltd 0844 871 8730
www.spacrest-europe.com
www.swimmingpoolnews.co.uk
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