Major Industry Change re: Online Scuba Sales....

[cerich]

Very interesting!

Marketing...

Intitially diving was confined to SoCal a few US sunshine states and population centers. So cal had the majority of the manufactures, the only organized instruction, the only dive magazine (Skin Diver) and the majority of the US Diving population.

It was US Divers (Aqua Lung) who opened up diving in the hinterlands in the Spring 1956 Sears catalog (see Page 961), Wards followed in the 1957 Spring and Summer Catalog (Healthways) and finally Penny's in 1974 (Voit page 579) Equipment was marketed sans training other than a small brochure; It was suggested that Tanks could be filled at the local fire station or medical supply company.

Ten years later John Culley, the new sales Manager of US Divers placed US Divers equipment in the then new discount stores that were sprouting up all over the US, Gemco etc...(like Cosco & Walmart.) The LDS rebelled refused to assemble, fill, repair or in any way service US Divers equipment. John was dismissed from USD and the US divers equipment was removed from discount stores..

the late Gus Della Valle & Dick Bonin established SCUBA PRO about the same time frame. They were professionals and Scuba Pro was "professional equipment" which gave rise to the "professional store" and a fixed price with no discounting or mail order sales. Scuba Pro had a un offical training branch, the NASDS program and stores headed by the late John Gaffney

A few years later the late John Cronin became the top gun in US Divers. John was not a diver like the others, Della Valle, Bonin, Recigno ( sea tec) Jehle (Voit) etc but rather a master marketer with a capital M. He Bob Chow, and Ralph Erickerson had created PADI--John used it as a marketing tool for US Divers products --US Divers and PADI were one and the same.

Remember the "Aqua Lung stores?"

John retired from US Divers and devoted his remaining years to developing PADI and the dive training orgaization that it is today. (Few know that John tried to promote the same thing for horse training--the horse people told him to stick his POHT in his ear)

PADI is marketing --it was founded on and is based on marketing and will only survive on marketing. Not equipment, but progressive dive training from neophite to supper dupper pooper instructor/trainer/God of underwater, and concurrently market its attendant items for each step, the certifications manuals, books, recordings, clothes, insurance and patches, especially the patches, etc etc.

It is only a natural progression that PADI expand it horizons and enter in to an area that would create the need for more training therefore generate even greater income world wide. Only time will tell of they are correct or become another John Culley of the diving world

The biggest major differences between the old days and mail order and today/internet is the following.

Mail Order was a rural thing more so than urban, internet is both rural and urban.
Mail order had rather limited rech in the dive market, not even 20% of divers got a mail order dive gear catalogue, today 80% of divers (at least) have the internet and many discounter "catalogues(we sites)" at their easy disposal.

Today all the sales managers in the world can fear being another John, but I promise you that any company that continues to create policy that ignores the reality of the influence of the internet is not going to enjoy the results.

Oceanic came up with a internet plan that allowed our dealers to compete 4 years ago, it's been tweaked since but it was addressed (thanks Doug!). At the time the whole industry looked and said "this will kill Oceanic, the dealers will revolt", well as of now Oceanic is the ONLY major to retain market share in the last 5 years (Leisuretrends) and you'll notice that we are lucky to have as dealers the best in small LDS and online retailers that are able to compete on a level playing field.

 

[meekal]

just one of my pet peeves:

http://en.wikipedia.org/wiki/Internet_capitalization_conventions

Internet capitalization conventions are the standards supported by the various sides involved in the long-standing debate on whether to write "Internet" or "internet".

In formal usage, the word Internet is traditionally treated as a proper noun and written with a capital first letter.

i know officially it has nothing to do with this conversation, but PADI (or should i say padi?) should know better

 

[bperrybap]

Very interesting!

PADI is marketing --it was founded on and is based on marketing and will only survive on marketing. Not equipment, but progressive dive training from neophite to supper dupper pooper instructor/trainer/God of underwater, and concurrently market its attendant items for each step, the certifications manuals, books, recordings, clothes, insurance and patches, especially the patches, etc etc.

It is only a natural progression that PADI expand it horizons and enter in to an area that would create the need for more training therefore generate even greater income world wide. Only time will tell of they are correct or become another John Culley of the diving world

Consider this. What if PADI is looking further down the road
at expanding their revenues by making padi.com a Scuba portal?
A one stop location where divers or wanna be divers could
pop in and find whatever they were looking for related to SCUBA.
From information aimed at how to get certified, technical
articles, mesage boards, training & travel tips, equipment reviews,
to even purchasing gear packages online? i.e
"Want to get Scuba Certified on your Tropical vacation?"
Click here to find out about our Tropical certification vacations...
OR
"Here is a recommended beginner PADI gear package"
Click here to purchase or customize.......

To me this would be a very natural progression for them. If
you look on the PADI site, while not too extensive, they already
have somewhat of the beginings of this. They already
have an LDS locator for training and a section for travel.

It doesn't seem that it would be that difficult for them to
expand their site to include more information and even web
commerce.

There would definitely be some political/business issues to
resolve as they would potentially compete against some of their
LDS customers but I believe that could be managed and worked
out over time.
Perhaps they could even do the sales back through
Internet LDS stores for a small commission.

If I were an LDS, I would fear this type of business model
way more than the current "click and mortar" model.

--- bill

 

[jeraldjcook]

Perhaps they could even do the sales back through
Internet LDS stores for a small commission.

If I were an LDS, I would fear this type of business model
way more than the current "click and mortar" model.

--- bill

Padi will forever need the LDSs in order to get their training out there, so I don't see them doing anything to hurt that relationship. I could see Padi soliciting sales and sending customers to participating LDSs that would in turn pay Padi a small commission for sending customers their way. That's not a bad idea at all.

 

[The Chairman]

I think we will see quite a few changes over the next few months and years in the way manufacturers do their business.

I don't have a cyrstal ball, but I do believe that those manufacturers who embrace the internet and net-communities specifically will do well. Very well. This also goes for LDSes and many of the most successful ones have found their success RIGHT HERE on :sblogo:. We look forward to being a vital part of this industry. It surprises me that there are not more "co-op" dollars being offered to promote both the manufacturer and the LDS at the same time.

There are certain areas that many LDSes do not want to deal with or do so inadequately. Reg repair is one of those things that can bring in customers and loyalty, but with which very few invest the amount of money and time into solving. I know of one shop not five miles from my house that does not have a magnehelic or an ultrasonic cleaner and yet, they "overhaul" regs for their customers. For the most part their "techs" are self taught and while they might understand the concept of "IP" they don't know much else. We could also discuss tank inspection. How many out there have no clue how to inspect a tank? PSI has done a lot, but there is a lot more to do.

If the LDS is to set itself apart, they will HAVE to address these issues.

 

[Hollywoodivers]

Padi will forever need the LDSs in order to get their training out there, so I don't see them doing anything to hurt that relationship. I could see Padi soliciting sales and sending customers to participating LDSs that would in turn pay Padi a small commission for sending customers their way. That's not a bad idea at all.

You can already sign up and take scuba online.....SDI has a program and it is probobly why PADI is doing it....
My wife took an eight week online course to become a Personal trainer. She switched careers in about 3 months and is one of the top trainers in our part of Los Angeles. I looked at her course and thought" duh ...duh.....duh.....wow the scuba industry sure is cutting edge duh..." For those who want convienience online training is a good option. It will work for them.

The online students still have to come to the waters edge and perform...
The LDS will not suffer from online training because the students can't actually immerse themselves into the computer and demonstrate that perfect pike dive (yet). Let them sign up online....PADI, NAUI, SSI WHOEVER, every lds needs a website now period.

BUT....Then if the student finds their favorite brand of gear ( based on a freinds recommendation online ) and they buy their gear at a grey market outlet, the compressor maintaining, pool renting, labor force (instructors/dive shop) will just have to charge more for the pool and openwater training.

Why doesn't the LDS even have the right to display those grey market manufacturers ( you know who they are) products at full retail price ? We would gladly list those manufacturers products at full retail price IF THE LDS WERE ALLOWED.
The customer would at least know we have it. Not everyone shops for price. Some people want to buy from an LDS...remember the recalls. Recalls are rampant and a lot of grey market consumers have been burned...Call the Grey market supporting manufacturers and ask them what their policy is before you buy. Then when that next recall comes around, see what the LDS does vs the hassle from the grey market....
We have had some major issues and some pissed off customers and arguments with the manufacturers based on these recalls. The LDS still ends up being the bad guy in all this because he is the one who will now break the bad news to that grey market purchaser."sorry buddy you can't get that fixed" "it's grey market"
The LDS is being harrased and restrained from doing fair, competitive business in the USA !
This problem SHOULDN'T even exist and if the grey market supporting manufacturers had stopped it years ago then the LDS could have had the same oppurtunities that the online sellers have....A lower buying level and more locations, more happy customers and no song and dance when that grey market guy can't his recalls and or broken / mis assembled gear to work properly.

Why should the LDS have to explain to a customer each time a grey market sale goes bad ? Why don't all the manufacturers explain it by using the name of the companies you should not buy from.....Dive rite is the only manufacturer who plainly spells it out and calls grey market websites by name....

I remember seeing those old mail order catalogs and prices so low it was impossible for me to compete. And when I call the manufacturer today about the same problem and ask ***--k and why? They say and I quote
" We don't sell to those companies, they get it from the backdoor, the grey market, the black market, dive shops selling under the table, stolen merchandise, Germany, Italy, Europe,.....I am not making these up..I have heard them all.
and while I am arguing with these manufacturers on the phone, another grey market sale is being made to my servicable area. If we want to match a price to keep our local customer happy, the manufacturers threaten to yank our dealership. That's wrong....If they hadn't supported grey market all these years we wouldn't have this problem.
The manufacturers must be dumping the leftover product to the grey market online seller...come on, we have been asking these same questions for 12 years at least.

Ok, I have said all this before and again I am wasting my time and breath...I just want to have a chance to serve my customer.

I AM AMERICAN, free trade is my right. SOME manufacturers STACK THE DECK ! AND THEIR IS NOTHING I CAN DO call the FTC ? Yes I have heard other dealers say they got no help from the FTC... NOT SELL THEIR PRODUCTS? That MEANS WE LOSE AGAIN we need to sell those brands to survive...
when THE CUSTOMER BUYS IT GREY MARKET ONLINE, IT BREAKS, WE FIX IT...MOST TIMES FOR FREE..

But man I love to scuba dive...don't you ? That's why I keep my LDS open, If i have a customer i can't serve I refer them to the other LDS across town. When I am out of town I support other LDS' by using their services and tip well
and lastly, If my LDS shuts it's doors then I still own a compressor. I can still go diving...I'll just hook it up and go
But this argument will still be going on...hah haa yeeeehaw

 

[ReefHound]

The only really interesting part will be whether or not huge marketers get into the act. What would happen, for example, if WalMart bought a couple of mid-range manufacturers and started selling a good quality package (mask, snorkel, fins, reg) for $129?

When was the last time you had your television serviced? Or your microwave?

Terry

There's no need to get them serviced when the price to replace is so low. If a mass marketer starts cranking out dependable regulators for $100 there will be no need for $75 annual servicing.

 

[Hollywoodivers]

There's no need to get them serviced when the price to replace is so low. If a mass marketer starts cranking out dependable regulators for $100 there will be no need for $75 annual servicing.

Let's make it 25 bucks for all that...mask, fins, snorkel, regulator for 25 bucks....assembled and molded by slaves in ?????where? where are you going to find a labor force...manufacturing...materials......insurable accountible company for these prices...
Just because walmart can do a pck of 20 socks for 3.99 doesn't mean it's good for america....
How about le't start with some gas or other means of propulsion for under 20.00 per week....I know this is scuba board and all and gas is not really relavant but...gimme a break...

How about this ? We get one time use regulators for 12 dollars you use them one time, and turn them back into the shop where you got it....
It's called a rental...we have them already...

 

[mike_s]

Le
When you have one profit center and you forget the consumer you are dead in business.

But isn't this the business model / profit center of existing most small local dive shops? a one-way-of-doing-things mentality?

Very few of the shops have transistioned into the web marketplace. Sure most of them have web sites, but they mostly only say who we are and how to contact us. Very few even have their products listed much less a 'add to cart' and purchase ability.


The reason I say this is an example of one business model and profit center that is dead in business from the way things used to be done. the example is the small TV Shop to buy a TV. If you wanted a TV when I was a kid, you had to buy it from a TV dealer. That progressed into stores that did more than just TV's and then on to the large electronics superstores such as Circuit City and Best Buy. Of course WalMart isn't left out of this picture as they asked manufacturers to make a 'cheaper tv' that they could sell for even less.

Dive shops are being replaced the same way. By stores with new business models. Unless you're in south Florida, you're unlikely to see a dive superstore the size of Circuit City. Therefore customers are using the web to purchase their dive gear from stores that can fill this void over their LDS.

That's why the other LDS's that are left w/o the sale are pissed. Because they didn't get he sale. But they don't see it the same way. They see it that the internet store cost them a sale. They don't see it that their lack of change is what really cost them the sale.

something to think about huh?

 

[ReefHound]

Let's make it 25 bucks for all that...mask, fins, snorkel, regulator for 25 bucks....assembled and molded by slaves in ?????where? where are you going to find a labor force...manufacturing...materials......insurable accountible company for these prices...
Just because walmart can do a pck of 20 socks for 3.99 doesn't mean it's good for america....
How about le't start with some gas or other means of propulsion for under 20.00 per week....I know this is scuba board and all and gas is not really relavant but...gimme a break...

How about this ? We get one time use regulators for 12 dollars you use them one time, and turn them back into the shop where you got it....
It's called a rental...we have them already...

Whatever are you bloviating about? You set up a ridiculous strawman, then marvel at your brilliance in knocking it down. Geez, a full kit for $25.