It’s understandable that the industry is still basking in the glow of 400,000-plus boats sold last year, but it’s time to see that the candle is flickering, and a key to a continued high level of success may rest in expanding the Discover Boating campaign.
According to the National Marine Manufacturers Association and the highly regarded market intelligence firm Info-Link, 420,000 first-time buyers of new and preowned boats entered the market in 2021, on par with 2020. What a ride. These are levels the industry hasn’t seen since 2007, the report states. Since 2007 — remember that date?
Any dealer who was in business at that time will recall what dramatically impacted boat sales. With the economic situation deteriorating, the Federal Reserve began steadily reducing interest rates through June 2008. But then it stopped because that triggered rapid inflation, coincidentally driven by high prices for energy, food and just about everything else. Does that have a familiar ring?
However, the economy isn’t depressed today. Unemployment is at record lows. Consumers are spending. Money’s cheap, or it has been. But these circumstances have led to inflation, and when inflation gets out of control, we slip into the R-word. The Fed then attacks the recession by raising interest rates to depress spending throughout the economy. That had happened by 2008, and until the unexpected sales boom from Covid, boat sales never fully returned to the prerecession volumes of 2007.
And this is why the boating industry must start making moves now. Recall that during the early 1980s, we experienced what economists called a “hard-landing” by falling into a deep recession after the Fed pushed its discount interest rate to a mind-blowing 15 percent. Boat loans were in the 21 percent range. Selling boats was challenging, to say the least.
While there’s no suggestion here that such a painful interest rate scenario will repeat, the current rate of inflation is at a 40-year high. The Fed yesterday raised interest rates by half a percentage point to reduce demand and bring inflation under control while keeping the economic ship afloat. However, the Fed has never successfully lowered inflation by its current stated goal of 4 percent without triggering a recession.
Even Treasury Secretary Janet Yellen succinctly predicted that doing so “will require skill and also good luck.”
So what does this have to do with Discover Boating? In the capable hands of the NMMA, the Discover Boating campaign has kicked off a new “See You Out Here” campaign. It’s an exciting rebrand and digital transformation, and dealers should be using these professionally produced materials in their marketing efforts now.
The goal is to make Discover Boating our industry’s overall lifestyle brand. It kicked off with a strong focus on attracting the next generation of boaters, the success of which is the route to ensuring continued sales. But there must be more.
The current plan is to increase the brand’s recognition and impact by weaving it into boat shows beginning next year. That’s a powerful plan. However, the economy already appears headed in an unfavorable direction. The last quarter sent signals that it has passed its peak, so it’s prudent to prepare the ship for likely rough seas.
Finalization of the plan to integrate Discover Boating into next winter’s shows needs to be revised and moved up. The start of the fall boat show season is only four months away, and shows from the Pacific Northwest to the Great Lakes to the East Coast will present excellent opportunities to advance the Discover Boating brand at a time when our industry will seriously have to generate sales at the retail level.
Discover Boating has been around longer than many people realize. It was initiated under the Grow Boating banner 20 years ago. Over time, it’s funding model has seen cuts when, one can argue, it should have had increases. Upping the ante now is a must, because our horizon appears threatened.
It brings to mind an April 2011 editorial by Liz Walz, then editor of Boating Industry magazine and now vice president of the Marine Retailers Association of the Americas. The headline read, “Our Future is at Stake,” and Walz wrote:
“Grow Boating was designed to be a solution to the challenges our industry faced in 2003. If anything, our challenges have grown since then.”
Her words may be more meaningful than ever, as dealers and manufacturers navigate the months ahead. In the meantime, click here to take advantage of the newest Discover Boating resources.