S2 Yachts, the parent company of Tiara and Pursuit, is revamping its offerings to better serve post-recession consumers.
That’s according to president and CEO Tom Slikkers, who told Michigan business publication MiBiz that consumers have changed the way they spend discretionary dollars.
“We’re emerging from a bad era as it relates to the economy,” Slikkers told the publication. “Not only did we recalibrate the business as a result of the new economy, but we also had to recalibrate what people expected out of our product.”
To better react to consumer habits, the company has adopted a strategy of regular new product development as a way to hedge against the cyclical yacht business, which can be particularly vulnerable during economic downturns, Slikkers said.
“Our new product development is really the catalyst that we feel is our best way to counteract what’s happening in the marketplace,” Slikkers said. “It seems a little bit counterintuitive to start investing in new product at a time when people seem to be kind of pulling their horns in.”
To maintain sustainable growth, S2 has built a cadence to its product design and engineering process. At any given time, the company will have three projects in various stages of development.
With less discretionary income, consumers began to spend less time on their boats per trip, Slikkers said, focusing more on weekend or day trips than outings that last a week or longer.
The company launched a series of new products over the last two and a half years, including the Tiara Q44, that reflect the new trends in boating. The Q44 was designed as a “Swiss army knife” of the boating world, outfitted for day trips or longer hauls, Slikkers said.
“We’re looking at slow, controlled growth because the recession took a lot of our reserves,” Slikkers said. “Now we’re trying to rebuild those reserves but also be cautious about growth. We’re evaluating some of those surges in the marketplace and [want to] determine if these are more of a fad or if they have some kind of a trend to them.”
The company expects to grow 10 percent and is on track to generate annual sales in excess of $100 million this year, Slikkers said.
To keep its manufacturing operations nimble, S2 has integrated automation and other technology into its two manufacturing lines at its Holland, Mich., facility.