Memo to marine marketers, especially those of you in the business of building new boats: Are you tired of beating your head against the wall trying to find new customers from an ever-dwindling pool of prospects? If so, remember what James Carville said of the economy during the 1992 elections and send this message to your CEO — “It’s all about sharing.” Whether you want to add “stupid” is entirely up to you.
Those who argue that the way to make boating more attractive to consumers is to add this or that convenience feature are missing the boat. Making modifications to boats to make them more appealing to millennials and Gen Xers may be necessary to stem the tide, but that will not prove sufficient to turn the industry around anytime soon. It would be like expecting the little Dutch boy’s finger in the dike to permanently solve that pending catastrophe.
The fact is that recreational boat production is in a secular decline and has been since 1989, when new-boat sales last peaked. The marine industry didn’t cause the downturn. The truth is that the economic and demographic forces that led to the postwar boatbuilding bubble have petered out and the changes the digital economy has fostered during the past decade have significantly changed the lifestyles of most Americans.
According to a study eMarketer released in 2013, Americans spent an average of 11.52 hours a day consuming media of all types, including digital devices, television, radio, newspapers and magazines (see http://www.huffingtonpost.com/2013/08/01/tv-digital-devices_n_3691196.html). With eight to 10 hours set aside for sleeping and eating, that doesn’t leave much time for outdoor recreation, especially when the entry point costs tens of thousands of dollars and may only be enjoyed a few times a month.
Combine this with the fact that only 62.6 percent of the American labor force is employed, and it’s evident that a large number of middle-class Americans who bought recreational boats in record numbers in the 1960s, ’70s and ’80s have left the market. The figure was 66 percent before the Great Recession began and had been steadily declining since the mid-1990s.
There is, however, a possible solution. The Ford Motor Co. recently sent a letter to 14,000 Ford owners suggesting that they could earn extra cash by renting their cars to those who don’t necessarily want to own a car (http://www.washingtonpost.com/blogs/wonkblog/wp/2015/06/24/buying-a-car-could-soon-be-a-thing-of-the-past-and-ford-is-desperate-to-find-whats-next). The company will enable people making monthly payments on a Ford-financed car to get extra cash by renting that car out for as long as a week. According to a June 25 article in The Washington Post by Drew Harwell, Ford wants to become part of the trend in which cars are shared, not bought.
“Instead of depending on the business model that’s kept it going all these years, rolling new cars and trucks off the lot, Ford is trying desperately to, in the words of chief executive Mark Fields, challenge custom and question tradition,” Harwell wrote.
Although this may be nothing more than an experiment, let us not forget that it was Henry Ford whose innovations in mass production built an industry that has been a bedrock of the American economy for more than a century.
A new business model for boatbuilders of the 21st century just makes sense. A recent British study finds that the typical passenger vehicle is parked 96 percent of the time. If that’s true, I dare say the typical recreational boat is tied up — going nowhere — to an even greater extent.
Is this a move of desperation brought on by Ford’s plunging sales? Not at all. Auto sales may well hit a 14-year high in 2015. Instead, Global Automotive Outlook predicts that car-sharing services that now count 5 million members will grow to 26 million within five years.
Sharing is no longer your father’s pipe dream. It’s the wave of the future, and there are boatloads of money to be made. Think about Facebook, which at its core is built on the simple concept of sharing information. It was recently valued at $250 billion. Closer to home, so to speak, is Airbnb, with annual revenue that is expected to exceed $900 million this year. It’s valued at $25.5 billion.
What kind of brave new world are we living in? According to a recent article in the Wall Street Journal, more than a third of all global airlines now ask fliers to tag their own luggage during check-in — up from 13 percent in 2009 — and we’ll soon have the privilege of printing our own luggage tags at home and tracking our bags on our smartphones when they get lost.
Fundamental changes in the way we work and play are there for anyone to see. People from every walk of life are sharing their cars, their houses and now, with flexible work schedules and the portability of health insurance, their everyday jobs.
So if Ford executive chairman Bill Ford can say, “There’s no question our business model will look very different in the future than it does today,” why don’t boatbuilders also see the handwriting on the wall and begin making it very easy to use rather than own a recreational boat? When will we take full advantage of the fact that a boat is a floating billboard for a marvelous lifestyle?
Although it is true that a number of boat clubs and so-called peer-to-peer websites led by farsighted entrepreneurs have sprung up in the past few years, they are only scratching the surface of those who already have one leg in a boat, so to speak.
Imagine how many more customers would go boating if getting into a boat were as easy as renting a car from Hertz or Avis.
What is needed is a bottom-up effort by boatbuilders to make it easy to get into and out of using a boat. A parallel market to boat ownership needs to be created by boatbuilders as a self-standing profit center with the goal of enabling tens of thousands of Americans to discover boating. Perhaps some of these consumers will ultimately take the plunge and buy a boat. Although some will and some won’t, the bottom line is that more people will be exposed to the joys of boating, and in the long run that can only be good for the marine industry.
The choice is ours. We can continue to head down the path of the horse-and-buggy set who turned up their noses at those belching automobiles at the turn of the 20th century or we can embrace the sharing economy, which looks as if it’s not only here to stay, but also to grow.
Michael Sciulla is president of Credibility & Company Communications, as well as vice president of the Marine Marketers of America and a member of the board of directors of both Boating Writers International and the Marine Marketers of America. During a 28-year career at BoatUS he built the association’s brand as membership grew from 30,000 to 650,000 and testified more than 30 times before a number of congressional committees.
This article originally appeared in the August 2015 issue.