Our latest Pulse Report survey went out in late February, and given the traditionally slow retail period at the start of a new year, receiving a modest number of respondents — 57 retailers — was no surprise.
However, the pleasant surprise (and contrary to most years) was the clear majority, 72 percent, reporting retail growth in February, with only 8 percent indicating a decline. Clearly, the pandemic-fueled interest in all things marine keeps chugging along.
The monthly Pulse Report, conducted by Baird Research in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only, bears out the anecdotal evidence that while retail remains strong, the main concern right now is product.
New-boat inventory remains incredibly lean, with 94 percent of dealers reporting that new-boat inventory was too low. In fact, not a single dealer reported that new-boat inventory was too high. Same for the reports on used-boat inventory, with 94 percent of dealers also responding it was too low and none saying too high.
Expressing one point of view about the pandemic, a dealer responded, “We are happy we do not need to go to the boat shows. We do not miss them.”
Another dealer mentioned shifting the sales strategy to digital. “Lots and lots of photos of inventory on website. Customers are shopping hard online, and they want to see what the actual boat looks like, not the factory photo.”
Three other dealer comments also accentuated positives amid the retail situation. “We ran a two-month sale January and February and retailed all the boats we have on order through July,” with another stating, “Pretty much anything that floats is hot,” and the third highlighting a basic tenet of supply and demand: “Holding firm on prices. Let low ballers walk. No need to give product away.”
Still, every silver lining is shrouded by darkness. When asked what’s not working in the marketplace, comments were
variations on a similar theme. “Disappointments, back orders — when you call the manufacturer, ‘Next week,’ they say, but next week never comes.” Another comment was succinct: “No motors.”
One dealer comment seemed to be a resigned summary of current market conditions. “Manufacturers do not seem to have the same sense of urgency as boat dealers. We will never know the true sales potential 2020 and 2021 could have brought.”
Which leads to the question of inventory and what to do about the dearth of available product. Raising prices to manage product scarcity was the most popular response, followed by placing more orders for specific customers. Other comments included, “Increase margins, increase orders and convey that sense of urgency to the customer. Most already know it’s super hard to get boats right now, and that works to our favor.”
Some dealers are even introducing models they haven’t carried in the past. “Cut way back on brands that can’t get us product, while expanding with the ones who can, i.e., stocking models we usually don’t from an existing manufacturer who can get products to us, in an attempt to fill the void from the manufacturers that can’t deliver.”
Reality bites, as the saying goes, so other dealers are making the best of the current retail situation. “Taking whatever we can get.” And finally, “Not a whole lot we can do about it, except inform the customers not to wait if they want a boat by spring,” a dealer responded.
This article was originally published in the April 2021 issue.