Although the desire of consumers to improve their backyard experience remains strong post-pandemic, economic concerns such as inflation are having an impact on the hot tub industry. While Shawn Maynard, owner of Bullfrog Spas of Northern Utah, expects continued demand for hot tubs and swim spas, “The more inflation rises, the more of a damper we will see on purchasing,” he says.
With a possible shift in the market, retailers such as Maynard are refocusing their sales efforts on product categories such as chemicals to transform one-time buyers into repeat customers and secure future business.
Dealers face fierce competition in this arena, however, as many spa buyers turn to online sites for their chemical products. “It’s difficult to compete with online sales based on price or even convenience,” Maynard says. “We acknowledge that most customers are happy to drive 30 minutes to make a one-time $20,000 purchase, but they are much less likely to drive 10 minutes to make a $20 purchase.”
We acknowledge that most customers are happy to drive 30 minutes to make a one-time $20,000 purchase, but they are much less likely to drive 10 minutes to make a $20 purchase.”
Shawn Maynard, Bullfrog Spas of Northern Utah
Despite challenges — notably, managing delayed inventories that can arrive in bulk and need to be delivered — dealers are taking various steps to compete with big online marketers.
“We update our pricing monthly for in-store to be as competitive as possible,” says Tori Lambright, executive assistant at The Place in Medina, Ohio. “We do a lot of comparison against Amazon, and it gives people a good reason to come into the store and purchase.”
Some have created their own online retail sites, such as Maynard’s, which offers free shipping for orders over $100. Lambright has also crossed over into the e-commerce world for selling chemicals. “We have an online retail page where you purchase a kit and have it shipped to your home every few months,” she says.
Service is a key factor in maintaining customer loyalty — and chemical sales — beyond the initial relationship. This includes the convenience of curbside pickup and delivery, which are becoming standard in the industry.
This can also take the form of in-store water testing and chemical classes. Bullfrog Spas of Northern Utah offers both, says Maynard. So does The Place, says Lambright. “We have a testing station in our care products department,” Lambright says. “And at least one fully trained staff member who handles advice in taking care of hot tubs.” The business also offers spa classes for everyone who has purchased a spa in its store.
Sam Gore, general manager of Colorado Custom Spas with locations in Denver and Castle Rock, Colorado, has a direct approach for service, telling customers to “Pick up the phone and call me every day of the week if you want. I’ll spend an hour on the phone with you because we’re here to help. I’d rather engage you [personally] because every water chemistry issue is a little different.”
The company is also considering a spa inspection-type program, similar to the 50-point inspection for one’s car, Gore says. “We’ll do a system flush on your spa, will do our 25-30-whatever point inspection on your hot tub and identify [issues] such as water leaking on your pump seal, which will mean you’re probably going to need a new pump, or your ozonator has reached the end of its life expectancy, so you’re going to need an ozonator. While we’re here, we’ll also set you up with your chemical supply at a discount.”
One way some dealers are making the chemical-buying process easier for spa owners is an auto-ship program, which is offered by chemical manufacturers such as Florida-based Serum Watercare. According to Mark Henderson, Serum’s president, spa buyers sign up for their chemicals with the dealer they bought their tub from, “who implements Serum’s automated computer program to track and determine when the customer is ready for the next bottle: The retailer [then] ships the product directly to the consumer; we just supply the product to the dealer, who keeps it in stock,” Henderson says. “The consumer does not need to be involved with the shipment unless they want additional chemicals.” This, he adds, is a win-win process, as “the retailer retains a revenue stream, and the customer does nothing.”
This allows the dealers to focus on hot tub sales, while ensuring the chemical sales revenue doesn’t go to Amazon. “Our goal as a company is to help retailers retain business after the sale of the tub,” explains Henderson.
His plan to accomplish this goal is two-fold: Auto-ship as described above — important because it builds a recurring revenue that Henderson says is the “strongest factor” in any business. And secondly, give the customer something he believes will make the auto-ship offer too good to turn down. “In exchange for auto-ship, we offer a lifetime jet warranty. If a customer buys the product on a regular basis from the [original] retailer, we will replace any removable jets that fail because of water chemistry, a lifetime jet warranty,” Henderson says. “Nobody else in the industry does this.”
Another challenge may be on the horizon: the potential for chemical and container shortages, which have affected sales in the past. But, according to Maynard, “Since the beginning of COVID, we have ordered substantially more than we needed, warehoused much more product than in previous years to hedge against tomorrow’s supply-chain problem.” Henderson dittos the precaution for his clear plastic BEP containers, which are produced in China: “I have a five-year supply stored in a warehouse.”
In other words, they’re ready for what’s ahead.