On the last day of the Atlantic City Pool & Spa Show, I sat down with three executives from Viking Spas to talk about the show, the industry and Viking's plans for the new year and beyond. Joining Director of Marketing Tom Kneeshaw in the discussion were A.J. Gallagher, corporate sales manager; and Jean Gosselin, Canadian sales manager.
What do you think about the Atlantic City Show?
Kneeshaw: The traffic is about the same as last year. One thing that we were talking about is that I'm waiting for a customer right now. I want to talk to him, but he's at a seminar. In Las Vegas they have a lot of the seminars in the morning, or even a day ahead of time. So it would probably be a lot more useful if they scheduled the seminars at different times, allowing our customers — or prospective customers — to visit our booth during show hours.
But the people that were here, were they here to buy?
Kneeshaw: I think most of the people are just looking for something to sustain themselves in this economy. Everybody loves this industry — that goes without saying. People love it! The only way you go out of this industry is feet-first. So people want to make sure they keep up to speed on what's going on, they want to know how to survive, so they're looking for ideas, they're looking for new products, and anything possible just to be able to sustain their businesses.
So the people that come here in that frame of mind, and say, "Tom, what do you have for me?"
Kneeshaw: Lots of new things; exciting things. We have a slip-resistant surface, which we premiered this past year. We've received a lot of favorable response on that. People are looking for something different, something that will separate them from the competition, and sure enough, something with a slip resistant surface — think safety — is something different they can show consumers that walk into the stores.
What are you hearing from your dealers? Are they getting more people through the door, are they bracing for another tough year?
Gosselin: Where I'm from, business is good. Up in Canada, we've increased our sales every year, as a matter of fact. So when it comes to the economy, it's not like you guys have a cold and we sneeze. Our economy is looking up, business is picking up again, and we figure all the good news that's coming our way will make its way down to the U.S. A lot of people I've seen so far in our booth have all been interested, and look like potential buyers, and they're shopping. They know exactly where they're going, booth to booth. You've got innovations at some booths, and curious people stopping in, and they're here to buy.
Gallagher: I haven't been to our bigger house accounts for a couple of months, but they have been down. It's like Tom says, you want to be prepared for when people ramp back up and they want to spend some money. So you still want that new product that sets you apart from everybody else so you're ready when the economy does rebound.
Kneeshaw: I think when A.J. says they're down, it's the same thing I think all dealers are experiencing. Where they're down is really the upper-end category. People are really looking for value. So the value-oriented products, I think that category is up. But the middle and upper ends are really hurting because people are just holding onto their money. So where it was $5 a month more to get that super-duper product, it's not $5 anymore because there's no financing. So that's why most of our larger accounts are down; the buyers are just not there.
But the value shopper is definitely out there, and we're trying to give dealers something in that range that will appeal to their customers. Typically they start at $2,499 all the way to about $7,999, and it all depends on the margins the store works with. Some might be able to do $1,999 to $6,999, but that's not typical.
A.J., you're involved closely with the dealers. We've always heard that these guys are cutting back on sales staffs, streamline processes, and doing things that will help them become stronger businesses in the long run.
Gallagher: I think you've seen that in every line of business. But these are times when you still have to spend money on advertising, so you're still seeing that. The smart ones are doing that and putting money into their websites, thinking of different ways to get their names out there, so once things do turn around they'll be well positioned to take advantage.
So in times like this, people who advertise are often advertising in a void, and can take over market share.
Gosselin: We're in bigger retailers, and whereas some of the small fries might pull back their marketing dollars, these guys know this is the time to really show their presence and push those marketing dollars. So that's what they're doing.
As far as budget cutting, we're seeing fewer people coming to the shows. The main people will come, but they're cutting down on the rest of the staff, so what you see are the real buyers. So the people here are getting down to the real nitty gritty. That's why I've got to reiterate and add something to what Tom said earlier, which is that the seminars need to be held before the show. By the time they get here they're tired. They've been sitting in a class getting educated, which is great. But by the time they get here they're not business-minded. And I hope they look at that because that takes away a little of our spark. I mean, I'm all about education, but I'd like to educate them here. On the floor is where the action is. It's not on a bench or in a classroom.
A lot of people complain that the manufacturing base has eroded in the U.S., and that you can't even buy American-made products anymore. Can hot tub manufacturers and dealers get any marketing mileage out of that?
Gallagher: All right, you're right in Tom's wheelhouse now. (laughs)
Kneeshaw: We're really pushing that right now. As I was telling Shawn the other day, we're in the process of filling out an application for the President's Export Award, where last year only 39 companies got it. Right now 58 percent of our product is exported outside the United States borders. What makes our company attractive, according to our local Department of Commerce rep, is that so much of our product is U.S.-made. And that is something we are really proud of. In Vegas, at the Atlantic City Show, in posters, we are promoting value and safety as well as the fact that the products are American-made. I think that has a lot of traction. Some manufacturers are making their spas in Mexico, and one is even using Chinese pumps. But we think it's important to buy American. That question was right in my wheelhouse.
Gosselin: Same goes for our Canadian partnership with the United States. We usually do our publicity with American and Canadian cross-border shopping in mind, and especially with the Canadian dollar at par, most Canadians also like to buy North American because it helps our economy. We're not at war with each other, and we've got the biggest border between two countries in the world. So we're doing a lot of trade back and forth, and our governments are working together to eliminate paperwork and streamline the process so it is easier to trade.
A lot of Canadians understand that whether it's a Canadian company selling to the U.S., or a U.S. company selling to Canada, it's a good partnership that benefits both sides.
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