The boat business isn’t the same as the car business, but could recent observations about the former be an indicator of what’s ahead for marine dealers now?
First, there’s no question that both are looking ahead and trying to figure out where sales will come from as we wind up a wild 2020 and dive into 2021. It’s even more perplexing when viewed in light of operating without any major market in-person winter boat shows — normally a sales driver.
Last summer, boating not only survived the Covid-19 pandemic, but set a course to excel because of it. The industry was humming in the first two months of 2020: boat shows were reporting great attendance and plenty of sales. March came in like a lion and by the middle of the month, most manufacturers and dealers were being forced to shut down. It became a very scary time.
Then, along came May and most industries — including marine — were learning to adapt to the challenges of survival in a Covid world. Boats unexpectedly became a favored choice for family recreation in the new way of living among travel protocols and canceled vacations.
Success began eating up the inventories in showrooms. Boat builders had been shut down, parts suppliers fell behind, and most dealers today are at an inventory low point.
So where will things be going from here? I don’t have a crystal ball but looking over at the auto industry for some possible indications of what marine dealers may experience in the months ahead triggers some interesting observations.
It’s been reported in the Wall Street Journal that car dealer inventories are running about 25 percent below normal these days, primarily a result of two months of Covid factory shutdowns earlier this year. Accordingly, many car buyers who are used to the instant gratification of driving home their new car from the dealership the day they sign the papers aren’t getting that experience now. Instead, the lower inventories are forcing many customers to now order their new car and wait weeks to finally drive it off the lot.
Notwithstanding the disruption to a car salesman’s number one tool to lock up the deal by putting the customer in his new car that day, dealers are discovering an unforeseen benefit of having fewer cars in stock — the dealership’s profits are up.
That raises the prospect that in the car business, stocking fewer cars may become a permanent operating standard even after the pandemic is behind us, especially in times of good retail demand.
So, what can be applied to the boat business? We know overall inventories are low, too, following healthy summer sales in most categories. And, if we follow the auto model, dealership profits are most likely up, as has been reported by some major dealer organizations already.
At the same time, several uncertainties about 2021 make following the car model questionable. For example, a marine dealer cannot sell from an empty basket. And while there’s ads on TV implying people are buying cars online, boats and cars aren’t comparable.
With rare exception, primarily only in low-priced used boats, boat buyers do not sign without having that first-person tactile experience at the dealership.
Boat prospects want to be connected through the tactile sense of touch. They also want to smell it, sit in it and, most of all, imagine it in. After all, buying a boat is the act of imagining the experiences the prospect thinks he’ll love. When they’re sitting on board, vocal and visual signals from the sales person become less important as prospects tactile signals intensify.
So, arguably, while ordering boats may be more acceptable to customers, dealers must reasonably replenish their low inventories for 2021 or they won’t likely be able to sustain increased profit experience enjoyed this year.