Our industry - indeed, our world - has undergone tremendous change and upheaval in the last 16 months. Change that has been fundamental, cyclical and secular. Change that has been tectonic in its power and ability to not only rearrange our industry, but also the world economic landscape.
The idea that we will somehow return to normal once things "quiet down" seems both quaint and unlikely, given our recent past. The bubble burst, and we are emerging in a new normal. We are smaller, leaner and smarter, and in time, I believe, we will be healthier.
We are making a bottom even though more contraction is going to occur throughout winter. By some estimates, as many as 400 or more dealers will close their doors in 2010. Despite the painful winnowing, this year will be better than the one we are blessedly leaving in our prop wash.
The consumer remains a question mark moving forward in 2010. With households carrying record debt and the unprecedented drop in home prices (down 20 to 50 percent in metro markets), it's no surprise that many would-be buyers are reluctant at this time to pull the trigger on a boat - even if they could obtain financing. And many of those whose balance sheets are in better shape are still having difficulty getting loans.
An improving jobs picture - and the rise in consumer confidence likely to follow - will go a long way toward bringing folks back into showrooms and brokerages. The contrarian in me believes the consumer will re-emerge a bit faster than most forecasters predict, but he or she also will be a more cautious buyer, one looking for value, quality and resale.
Expect to see more "downsizing" by boaters still trying to find their sea legs after riding out this Force 10 storm. What will they be looking for? Seaworthy, simple, efficient, reliable, handsome - that's a pretty good set of criteria to design into boats targeting today's buyer.
In general, pre-owned boats should do better than current model-year boats, which will continue to be under price pressure from liquidated inventory. Overall, the market is expected to be flat, with perhaps some uptick in demand coming later in the year.
Inventory and expense control, floorplan financing and evolving distribution models will remain top agenda items for many businesses. There will be fewer boat shows and more use of the Web, e-newsletters and various forms of social media to push products and messages. Clearly, there is no one silver bullet, but those companies with many arrows in their quivers will do better than those that are simply doing the same old thing.
Technology that adds tangible value and benefits to boats, electronics and other equipment will draw some folks off the fence while also appealing to the early-adapters out there. Joystick control systems and propulsion breakthroughs such as Zeus, IPS and Axius are prime examples of advancements that should drive sales.
In this price-conscious world that we find ourselves in, savvy builders and manufacturers will do all they can to remove costs from their products without sacrificing quality. How? Solutions include improved manufacturing efficiencies, more standardization, installing more modest power in boats and resetting consumer expectations through a shift in marketing and advertising messages. That will take time, but for some market segments wringing out costs is a key to sustainability and, perhaps, survival.
Remember, the most effective marketing will focus on lifestyle - selling the "ing" rather than the "thing." And in this market, family fun, camaraderie and a healthy outdoor lifestyle will resonate more strongly and with more consumers than an appeal to purchase a "luxury product."
Boaters are a resilient lot. They will give up much before they give up their time on the water. It's a great strength, and one that in time will lift all of our boats.
This article originally appeared in the January 2010 issue.