Breaking Into The Retail Market
by Gene Muchanski, Editor
The Dive Industry Professional
I’ve always been fascinated by Retailing. It’s an Art and it’s a Science. It is, in fact, the lynch pin between producers and consumers. As Retailers, we are the Middlemen (and Women), in between where the Supply Chain meets the Demand Chain. We are both Buyers and Sellers in the eternal game of commerce. We are the Re-Sellers of the world’s programs, products and services.
I say “we”, because I consider myself a life-long Retailer. A born professional of the Merchant Class. My passion has always been focused on the quest to serve and to sell. I first realized my calling as young boy in Catholic School, where I was directed by the Nuns to sell punch cards for the church’s annual fundraising. After I sold out my cards, I was always given more cards to sell. Even then I realized there was something magical about meeting new people and selling them products that made their lives better. And mine. I liked people and I believed in what I was selling.
I look back on the jobs I had as a youth; Newspaper Boy, Christmas Card Salesperson, Clothing Salesman, Apparel Sales Consultant, and even my active duty job classification in the Navy was in the Naval Supply System Command. I majored in Marketing and minored in Retailing at the University of Connecticut. My first job out of college was with NAUI Worldwide where I was their Marketing Director and in charge of their 250 store Pro Facility Program. I worked in Retail Dive Stores as an employee, store manager, and owner. For over 40 years I have always been actively involved in the diving industry’s retail market. That’s my background. This is what it means to the diving industry.
Forty years ago there were over 2,400 Retail Dive Stores in our Industry. And that was just in the United States. Today there are less than 1,200 stores in the U.S. which means the retail market is 1/2 what it used to be. There are many reasons for the decline of retail stores in our recreation, and we will explore those reasons throughout the year. But for now, let’s just say that the size of the retail market is small and definitely underserved. In the following text, I will attempt to define the current retail market, point out the reasons the market is important to the survival of the industry, dive into some of the weaknesses and challenges of the market segment, and recommend some of the solutions that can overcome these challenges and put the market back on track to recovery. I have to point out that I may ruffle a few feathers here, but my intention is not to condemn, criticize or complain but to point out problems as I see them and offer solutions that I think would make the situation better. I hope you don’t mind. Incidentally I’m pretty thick-skinned and I’ve been shot at before, so I’m OK with your comments.
Why is the Retail Market Important to the Industry? Retail Dive Stores are the heart of the recreational diving industry. Dive stores teach diving, sell dive equipment, take people diving and keep them active in the recreational. To me, that means that Dive Industry Professionals working in the retail sector of our industry are the heartbeat of our international diving community. Dive stores are well suited to be the first point of contact between the general public and the suppliers of diving equipment, training, travel and lifestyle products. Never underestimate the power of first contact. But as we will see later, first contact can be a fleeting thing if not managed properly.
Dive Stores are the industry’s first responders. Store owners are responsible for customer acquisition, customer retention, and customer reactivation if necessary. Dive stores that are a one-stop-shop for the recreational diving industry are a significant market builder. By teaching diving, they create the market that purchases diving equipment. As a full time dive center, these stores retain their customers by forming dive clubs and conducting local, regional, national, and international diving activities. So when it comes to growing the recreational diving industry, dive stores need to be reminded that they are responsible for creating a local market for diving and maintaining that market to the best of their ability. In other words, if you teach diving lessons and don’t follow-through with equipment sales, someone else will. Now you just lost the market you created.
What are the conflicts? The short answer has to do with a limited amount of time, money and manpower. The long answer is a little more complicated. There is so much to do in running a successful diving retail store, that conflict always arise when the owners lose track of their priorities. A good business plan will spell out the details of why the business was started, how it is organized and operated, and how success is measured. After reading hundreds of retail profiles over the years, we have a pretty good idea of business models that work better than others in the retail industry.
First of all, a retail dive store is not in the diving industry. It is in the retail industry. Our Government calls it Industry # 45 in it’s NAICS (North American Industry Classification System). There are 4 digits after 45 that tells us what kind of retail business it is, but we don’t need to go there for now. One thing we can all agree on is that our dive stores are in the retail industry and the scuba diving market. It’s a niche market and it includes recreational education; diving equipment sales, rental and repairs; diving and adventure travel; and the sale of lifestyle products. Now, to be successful in the retail dive business, the owners have to understand and be proficiently qualified in the diving market and in retail business management. They have to understand diving and business.
Daily conflict can become apparent when owners don’t understand business or the market they are in. For now, let’s just say that the diving should be half of your focus and business should be the other half. Conflict also results when the business owners don’t evenly balance their focus on the things they sell in the store (Dive Equipment – Training – Travel). Besides running the store, should the owner focus more on teaching diving, selling gear, or going diving? As a business owner, that is your call to make, not mine. I am only saying that it should be balanced.
Solutions to your conflict. The solution to this 60 year old dilemma is simple. I didn’t say easy. I said simple. Go back to your Business Plan and look at your Vision for your Dive Store. What did you go into business for? What is your purpose? Now look at your Mission Statement. How did you plan to achieve your vision? The next step, I guess, would be delegation of your talents and those of your staff (if any). Who is responsible for training new divers (your new market)? Who is responsible for selling equipment to your customers (your market)? Who is responsible for keeping your customers active, like taking them on dive trips? Our recommendation is that you do some serious soul searching and conduct some detailed staff meetings to determine who is qualified to do what specific tasks. Another thing you should look at are the goals and desires of your store staff. Why are you and your staff in the business to begin with? Who is best qualified to produce a specific positive result to your planned outcomes?
A final word of caution. I know a lot of dive store owners that are either a mom & pop operation or a sole (single) proprietor operation. I’m not saying it should not be done, but I am saying that this is a very difficult way to go. If you’re teaching class, you’re not minding the store. If you’re on a dive trip every month, you’re not minding the store. But if you’re minding the store all the time, who is creating a new market and selling to them for you? Who teaches, who travels, and who minds the store is your call to make. Make it a smart call.
Why it’s difficult to reach the Retail Market. As you can see. Dive Store Owners are stretched pretty thin. They have to be proficient in business. That’s sales, marketing, accounting, law, merchandising, advertising, social media, computer hardware and software expertise, etc. They have to be knowledgeable in diving. That’s instruction, diving skills, dive equipment knowledge and repair, and travel destinations (resorts and liveaboards). They have to wear many hats and be very good at them to be competitive. One thing they probably don’t have a lot of is time. I know many Retailers who don’t read their eMail often and certainly don’t reply to it in a timely manner. And you can’t blame them.
Making the Industry Better. There are many things we can do to make the industry better. We can increase our knowledge of the industry by conducting and participating in industry-wide surveys. We can then improve our services to help each other become more professional, productive and profitable. We can work together to unfragment the industry and decrease duplication of efforts. We can change our dues structures to allow the retail sector to pick and choose the products and services they purchase from us. As an example, many organizations require retailers to pay dues to be able to purchase goods and services from them. If you belong to 3 certification agencies, you have to pay three annual dues, regardless of the numbers of certifications you issue for that agency. If you want to go to an annual trade event you have to pay dues first before you purchase your ticket. If you want travel insurance, you have to pay dues first before you can buy insurance. While all of these programs and products are important to us, we have to think of innovative ways to increase membership by reducing membership costs while increasing membership services and discounts. Perhaps your annual dues could be reduced as your purchases with an organization increase? I know it can be done. It just takes a little pre-planning and customer communication. A good example is the Surf Expo, in Orlando, Florida. They have two full time employees who’s responsibility is to get Retail Buyers to attend their two Trade Shows. Surf Expo does not charge Retail Buyers to attend the show. The Exhibitors agree with that policy because Retail Buyers make purchases! We supported a Rep Show in New Jersey one year and invited local Dive Stores to attend for free. Twenty Five (25) equipment manufacturing Reps paid for the event and 50 Dive Stores attended at no charge. A lot of orders were written. We can do that again.
Dive Industry Association has been a leader in the Global Diving Business Community for over 20 years. Our Member benefits have been on the increase ever since we started “Building a Better Industry, One Member at a Time.” Our members receive 24 free press releases a year, valued at $4,800. Our Members are included in numerous Trade Directories and websites at no charge. We have negotiated discounts for our Members with marketing companies such as Constant Contact and Modern Postcard. We have helped our members and all Dive Store Owners obtain free passes to Travel and Adventure Shows and the two annual Surf Expos. We have referred our members to Small Business Development Centers for free business consulting services. We have recently in the past few years, helped Retail Store Travel Buyers participate in free or low cost familization (FAM) Trips. We have been successful in obtaining funding for summit meetings, seminar events and luncheons from sponsors who are looking to make connections with the Retail Dive Stores in the United States. Our Mission is to bring Buyers & Sellers together.
That’s the way a Trade Association builds a better industry. It all begins by recognizing the importance of the Retail Industry that specializes in our market, and working to meet their needs. Let us work to meet your needs.