“Let’s face it,” says Jack Ellis, managing director at Info-Link Technologies Inc., “owning a boat is not a rational decision.”
Not exactly a cheerful thought for those in the boating industry, especially when you consider the demographic that is buying boats — the baby boomers. Until recently, this has not been a problem, given that what has been the historically largest generation also has been one that was eager to buy boats.
But that generation is no longer growing. In fact, this year the millennial generation is projected to surpass the boomers, according to the Pew Research Center, which analyzed data that the U.S. Census Bureau released in December.
Millennials, which Pew defines as people between the ages of 18 and 34 in 2015, are projected to number 75.3 million, surpassing the projected 74.9 million boomers, who are ages 51 to 69 this year. The millennial generation continues to grow, particularly because immigrants tend to fall into that age group. At the same time, the boomer population is shrinking as the number of deaths in that group exceeds the number of older immigrants arriving in the country. According to Pew, the millennial population is projected to peak in 2036 at 81.1 million, and by 2050 there will be a projected 79.2 million millennials.
But perhaps more surprising is that the Gen X population (ages 35 to 50 this year) is projected to outnumber the boomers by 2028 — just 13 years from now — when the number of Gen Xers is expected to reach 64.6 million, versus 63.7 million boomers. Gen X has long been overlooked in marketing campaigns because it has always been known as the smallest generation, sandwiched between two giants. But that is, in part, because the generational span of the group is shorter than the millennials and the boomers at just 16 years. This group is expected to peak just three years from now, in 2018, at 65.8 million people, according to census data.
Factor all that data into the demographics of who is buying a boat — a group that is aging faster than the overall population — and “the writing’s on the wall,” says Ellis.
“Right now, the older generation is supporting our industry in its entirety,” Ellis says. “Everyone’s concerned. There’s no indication the millennials are going to step up. We have no reason to believe that millennials are going to spontaneously say, ‘I’m 40. Let me go buy a boat.’ We’ve got to figure out how to get these people on the water right now — either figure it out or suffer the consequences.”
The words might sound bleak, but looking at a graphic showing the purchase year and ages of buyers, it’s easy to see that a shift has occurred in the last decade and a half. In 1998, more than 30 percent of new-boat buyers were under the age of 40, and only about 12 percent were older than 60. That’s a stark contrast to 2014, when nearly the opposite was true, with about 32 percent of new buyers older than 60. Slightly more than 15 percent were under the age of 40.
“Most people don’t realize that millennials overtook boomers in terms of size,” says former BoatUS executive Michael Sciulla, who now runs Credibility & Co. Communications and writes a marketing column for Soundings Trade Only. Not only that, people don’t think about the shifting dynamic in today’s families, Sciulla says. In 1967, only 47 percent of households had dual incomes. In 1997 that figure rose to 70 percent.
“Between the lack of time and all the time that’s spent hooked up to the wired world, folks who are trying to sell five- and six-figure items that are only used occasionally — they’ve got to rethink the entire business of marketing their product,” Sciulla says.
The Rodney Dangerfields
Generation X is the generation of right now for the boating industry, Sciulla says, but as in many industries, it’s one that is often overlooked. A quick Google search on the buying power of Gen X turns up a slew of articles: “How to Market to the Forgotten Generation” and “Is Gen X the Dark Horse in 50+ Marketing?” are among the top hits.
“First mocked as slackers, then cast aside in the rush to get to those desirable, hip millennials, the men and women of Generation X … have quietly become respectable adult members of the community,” Rieva Lesonsky, CEO, president and founder of GrowBiz Media, writes in an American Express blog. “In fact, a new Shullman Pulse study says these 34- to 48-year-olds are poised to replace the baby boomers as a cash cow for marketers.”
Lesonsky says the numbers might seem small to companies looking to market their goods, but this group has more spending power than any other generation right now, with 29 percent of the estimated net worth dollars and 31 percent of the total income dollars.
That bears repeating: Generation X, though smaller than the generations it is sandwiched between, has more spending power than any other generation, according to the study. And that generation is not much smaller than the preceding and following generations, says Sciulla. Rather, it is a shorter time span that accounts for that generation than the other two, he says.
“The Gen Xers were there as society became wired in the mid- to late-1990s. They were early adopters, and they are much more into social media than boomers, for example,” Sciulla says. “I don’t think they’re getting the respect they deserve, and smart marketers would do well to craft messages to them — they are really the sweet spot. People age 35 to 50 have been the sweet spot for recreational boating sales for years. [But] they’ve got all the other things that compete with time and attention like no other generation before that.” That is another reason they’re often overlooked, he says. “They’re the Rodney Dangerfield of demographics.”
Recreational boating is not a unique pastime with this generation, Sciulla says. He has written about similar activities that are on the decline — golf, tennis, horse racing. “All the sort of participatory recreational pursuits are way off. Why? People are spending more time in front of the tube, on the computer, on smartphones and less time in either group activities or in single pursuit of things like taking out a recreational boat,” Sciulla says. “The whole recreational boating marketplace has got to be rethought. The only communal experience I can think of is going to a boat show.
“If you just leave it to the average Joe, the attraction to boating is not going to be there unless you literally bring the lifestyle to them,” Sciulla adds. “I just don’t think the industry has reached a point yet where it’s decided that it literally has to go out and expand the market beyond its current parameters. Most people in the know are aware that boat sales peaked in 1989. The dollar volume is still significant, but what they’re doing is basically selling fewer boats at much, much higher prices, and that is squeezing out literally thousands of people.”
But marketers have to be careful in their approach to Gen X, Sciulla says. This generation is skeptical of “native content,” or advertisements disguised as objective news articles. “They’re a lot more tech-savvy, and they are probably a little more cautious about marketing messages,” he says. And they don’t want the hard sell. In fact, salespeople might feel as if they’re spending a lot of time just chatting about life with this group and not much time trying to get someone to make a purchase.
Grabbing the spending power
So that’s what Generation X does not want. The question is, what do people in this group want?
Nielsen research shows that members of Generation X value authenticity above all else and connect with everyday household and family activity situations. Though more subtle, gender nuances still exist within Generation X, it showed. “Ads can connect with Gen X’s women by using sentimental milestone events, like a daughter getting her driver’s license, or a son’s wedding, to create an emotional appeal,” research found. “A more direct approach can be utilized to relate to men in this segment, using cars and sports to appeal to their masculine sensibilities.
“Appealing to the desire for authenticity, imagery featuring realistic events that may occur or have occurred in the lives of Gen Xers, is likely to resonate,” says Nielsen — a contrast to appealing to other generations’ aspirational desires. Perhaps one reason to avoid hard sells is that members of this generation know who they are and what they want, and they do not want to be convinced. Because they are tech-savvy, many experts say marketing to this generation should be done digitally.
A measure of success
Sabre Yachts has enjoyed a younger clientele in the past 10 years, says Bentley Collins, vice president of sales and marketing at Sabre and Back Cove. “Our average age has dropped quite dramatically over the past years. We’re quite pleased.”
Collins says socioeconomic factors have brought more buyers in their 40s, and those buyers seem to be enjoying the Down East style. “I was talking to another builder in our segment and mentioning that I’d noticed them building more flybridges. I asked how old the buyers were, and he said they’re younger than is typical of express-style boats. That makes sense because younger people don’t mind the ladders, don’t mind being up high, with a little more fresh air and less air conditioning.”
Many Gen Xers are at the right time of life to buy boats, and they are attracted to Sabre, Collins says. “With more and more young people with increasing liquidity, they’re coming to boats like ours instead of white plastic boats like they were 10 years ago.” Those buyers are successful, but not “Fortune 500 companies,” he says. “Every single person has a different story,” Collins says. From a baker of cakes to a new generation of dot-com entrepreneurs, this generation tends to be more creatively wealthy than those prior. “That’s something we didn’t see 10 years ago. The average owner age has probably gone down 10 years in the last 10 years.”
So what is it about blue boats that attracts these newly successful people just hitting their stride? “This new group of affluent boat buyers doesn’t want to buy what everybody else has,” Collins says. “They say, ‘Hey, I want to be different, and I can afford this.’”
The X generation also values technical advancements, having grown up in the digital era. “We’ve made our boats more interesting technically,” Collins says. “We have the most advanced pod drive systems, joysticks and everything. Everything is as good as it can get.”
Although the company anticipated Back Cove yachts being more popular among this group, the opposite is true, Collins says. “We anticipated younger people in Back Coves because they are more affordable. But the bigger ones, the 34 and 31, those have appealed to older people coming out of sailboats. It’s today’s version of a trawler yacht. They are not younger — they are looking for something simple, easy to maintain and use. So in many ways, Back Cove has hung in the same area with the boomer generation, and maybe a little older.”
Another selling point for Gen X is conservation, Collins says. The increasing price of fuel six or seven years ago got people looking at single-engine boats. “And now people are more contentious. I think America has finally gotten to the point of being aware of the impact of fuel. For the last 15 years, we’ve been told we’re buying fuel from people who were enemies, so I think there is a real awareness of fossil fuels. My generation is very aware. [Gen X] is hyper-aware,” Collins says.
The digital revolution is a big part of efforts by the industry as a whole to make itself more attractive to young people. Discover Boating is again teaming with platinum-selling artist Jake Owen as Owen joins Kenny Chesney’s “The Big Revival” tour. The partnership is, in part, to reach younger boaters and those who might not have considered boating. A major component of the effort will take place on social media and online. The Discover Boating website will feature a custom Jake Owen playlist, an extensive Q&A, a special Jake Owen boating section and exclusive content that Owen will share on social media and at Discover Boating.com. Observers say the Discover Boating campaign has been highly effective in targeting very specific audiences, including Gen Xers and millennials.
It was digital appeal to newer and younger boaters that prompted Robalo to unveil its new R160 completely online, says Robalo and Chaparral president Jim Lane. “In one of our meetings, we said, ‘You know, we should just try something totally different than we’ve ever done before.’ ” The company took its Facebook account and tied it in with its dealer network’s Facebook pages to launch the brand-new R160 through social media, Lane says. “That’s a little bit of a difference for us because we’ve always used more traditional ways of introducing new product — boat shows, or dealer meetings. But this time it’s all going to be on social media.”
That fits into the concept of the boat itself — a 16-foot center console that comes with engine and trailer for just under $20,000 “with all the quality benefits of a standard Robalo,” Lane says. Achieving that in itself is already quite a project. “We had to put in a lot of engineering thought and know-how in order to achieve that.”
Although he spoke with Soundings Trade Only before the actual unveiling, it was after a teaser video had been released on Facebook. “We’ve already had customers contact our dealers, and they want to be the first one to buy one. They’ve never seen the boat. They don’t know what it looks like, don’t know what the features are, but they just can’t believe they can buy a center console Robalo for under $20,000. We hope it’s going to be successful for us. We’re obviously appealing to a little bit younger buyer than we have in the past.”
That was the idea, given the past success of the H20, the Chaparral line that runs from 18 to 21 feet and has hit a lot of new buyers. “On that line, almost 80 percent of them had never owned a boat, and almost 40 percent of those buyers of H20 are under 40,” Lane says. “On the Robalo side, the same data is only 11 percent. So we thought perhaps we were not marketing Robalo to get what we’d call seed customers. Even though we did have an 18-foot and 19-foot Robalo, we thought we were missing the younger buyers. That’s how the 16 project started.”
Vortex, the company’s jetboat endeavor, also has resonated with younger buyers, Lane says, with 53 percent of all buyers under 44. “That sort of proves what I was saying about H20, and that’s what we’re hoping to achieve with the Robalo market. Our goal has been to interest a wider age group of boaters into all our product lines. If we’re successful with the social media introduction of this boat, we might consider trying it again on one of our other models, too.”
Though not specifically designing for Generation X, the company does want to market to it. “They’re starting to earn more money now, and I think it is a good section to market to right now,” Lane says.
It’s all about the ride, bro
Millennials. They are media darlings following the anonymous generation. But 26-year-old Ben Dorton, brand manager at Bryant Boats, says even with all the attention the group is getting, a bunch of boomers and Gen Xers in a room trying to figure out how to tap the market won’t work.
“We consume a lot differently than our parents do,” Dorton says. “Our trucks, cars, boats, bikes — they’re not prizes. They’re not trophy possessions that we buff and wax every day. They’re tools that enable us to do something.”
When Dorton sees boomers going out on boats, “they take their shoes off before they get in. They have bumpers and ropes to make sure the boat isn’t getting dinged at the dock. It’s like a journey for them, and they kind of like the experience of babying the boat, versus when me and my friends get on the boat — we throw the wakeboard on, get in with shoes on and immediately start talking about where we’re going wakeboarding for the day and who we’re going to socialize with.”
This group of buyers has minimalist DNA. “We want the experience, but we don’t need the stuff that goes along with it,” Dorton says. “I want a home, but I’m not looking to have this house that’s fully furnished, or even very large. I want it to be to the point. I want the stuff that’s really going to benefit me — I don’t need the decorations, the chandeliers. This generation likes something that’s easier to maintain so they’re freer to do the things they want. They don’t enjoy going home on weekends and tending to the gardens and cleaning the big house.”
The generation also likes to customize things because it wants to distinguish itself from everyone else — not to brag, Dorton says, but because they have grown up in an era of being able to tailor things to their specifications.
Although their cars and homes aren’t trophies, this generation does like to boast about experiences — what they’re doing and loving — on social media. “The average millennial out on the boat is going to go on Instagram, post a picture and say, ‘I’m on a boat,’ ” Dorton says. “They’re kind of bragging about it.”
Ellis agrees that the millennials seem to have the desire to boat. “But this generation, as far as we know, is willing to pay for an experience without necessarily owning a thing,” he says. “If they can figure out how to tap into that desire for the experience, and get people into boats,” it would benefit the industry. But builders would have to realize that they will not sell millennials a boat right away. “They just have to be exposed to it,” Ellis says.
This article originally appeared in the July 2015 issue.