Tuesday, November 24, 2009

Renewed Emphasis on the Big Boat Shows

Beneteau’s new manufacturing efficiency will help achieve the intended effect of helping their dealers keep their overhead costs down. This will also benefit Beneteau by reducing the amount of boats that are built without an owner, but it will also benefit the customer because lower dealer overhead means lower prices on the boats we sell .
The changes in buying patterns by customers has led to all sailboat (and powerboat) dealers stocking far fewer boats and models than they have in the past. Drive by any new automobile dealer today and you tend to see a lot more vacant pavement, much more than ever before. The auto dealers were forced to adapt to survive under the new banking and credit realities, and the boating industry has been forced to adopt a similar strategy.
While the economy has obviously necessitated that the mode of business had to change, smart manufacturers and dealers also realized that there was very little benefit to carrying too much inventory. It costs a significant amount of capital to stock eight or nine boats at one time. In most cases, these were boats that a dealer owned and, as such, there was interest that had to be paid until these boats were sold. That no longer remains a viable position for any dealer to be in, and no one- buyer, dealer, or builder benefits from having too many boats sitting at the factory or at a dealership.

While the perception may be that a better price can be negotiated if there are more boats, or that one needs to see, touch, and feel every model, it is no longer possible for either the manufacturer or the dealer to survive in that mode of operation. The internet has made it much easier to shop larger models that dealers may not stock. In fact, you can access any of Beneteau’s models with a few clicks of a mouse, giving you a wealth of information, pictures, and virtual tours of all their boats.
Boat Shows: Quality, Not Quantity

We are already seeing a re-emphasis on the big, regional and national boat shows. Shows like Strictly Sail Chicago (January), Strictly Sail Fort Lauderdale (February), Strictly Sail Pacific (April), and the Annapolis Sailboat Show (October) are once again becoming the few places where sailing enthusiasts will be able to see and compare the majority of the new sailboat models available. Manufacturers throughout the industry have fewer dollars to allocate towards boat shows and they are picking and choosing more carefully which shows to attend. The smaller, local In-Water summer/fall shows are going to see that it is getting harder for these same builders - and the dealers - to justify the expense of these shows. Shows are expensive for dealers, as they always require dealers to have boats in stock at a time of year when the dealer is hoping to have sold all the current models and is planning their fall/winter stocking needs. Then, the dealer needs to arrange for transportation to get the boats to the venue, and hotels for their staffs, and many other expenses that all go along with the production of the show.
Following are some interesting excerpts from a recent article covering this topic. The comments were made by the president of the National Marine Manufacturer’s Association (who control and put on many of the largest shows in the USA, including all of the Strictly Sail Shows):
“Today, there are simply too many boat shows”. That’s what NMMA president Thom Dammrich said at the National Marine Bankers Association annual conference. He noted that manufacturers are looking for new business models, among them “cutting back boat shows from the 300 that now take place throughout the USA every year to perhaps 30,” he said. “They are expensive and often don’t return to exhibitors a good return on investment. Ninety percent of boat shows need to go away,” he added. Maybe 30 isn’t the number - maybe it’s 60, or 90, but it clearly shouldn’t be the 300 we have now.

“It’s not unusual, for example, for a dealer to be in six or seven shows a year. That’s a very big expense for that dealer, and they struggle to get a good return on their investment (ROI) from participating in so many shows. When they can’t do it, they blame all shows. The fact is, dealers should do one or two shows a year-the dominant ones in the market”.

“What should be left is an industry stable of large shows in large, centralized boating centers. Every area dealer would display, and the attendees would travel to them because that is all there is. Moreover, in the scenario, it will be necessary for manufacturers to provide more resources — financial and product — to the dealers in these shows. Fewer shows will mean manufacturers will support them better, which will mean better shows. There is nothing inherently wrong with boat shows or their ability to provide ROI - except there are just too many”.

What we expect over the next few years is that the organizers for some of the smaller shows will combine shows, and others will probably decide to eliminate some shows altogether. But the positive effect will be that the bigger, well-attended shows will receive even more emphasis, and will remain as an important part of the process of researching and buying a boat. See you at the show. Strictly Sail Chicago is January 28-31, 2010.

Photos: 2009 United States Sailboat Show (October) - Full line of Beneteau models on display

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