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Competition to sell spa enclosures is coming from many places nowadays. For manufacturers, the competitive presence of China and Southeast Asia is beginning to have an impact. Dealers have chosen a variety of methods to deal with the competition, focusing on service and providing quality products chief among them. The Internet, too, has made sales easier for dealers just as much as it has made sales cheaper for customers. Manufacturers have also chosen a variety of methods to stay in the game in an ever-more globalizing marketplace.
Enter The Dragon Opinion differed as to whether China, or Southeast Asia in general, presented real competition right now for manufacturers, but Craig Cohen, president of Gazebo Works Too, definitely thinks they do. "They're bringing gazebos in from various Asian countries where they've got little or no labor or wood costs," he says. "Of course, service is always going to be an issue, because if you have a broken or missing part in freight, it's not like we can service that and send out something next day. I mean, who do you contact. What do you do?" Not having access to service is only one of the myriad problems with some of the Asian gazebos, according to Cohen.
"I've got kind of a thorn in my side just because you have them literally knocking our products off," he says. "We do the research and the development. We can't compete with 20 cents-an-hour or dollar-a-day-labor."
Cohen also calls into question the quality of the imported gazebos. "You can take pine and you can put a stain on it, and make it appear to be redwood or cedar, and it doesn't have the same characteristics," he says. "I have seen advertisements saying, 'Asian cedar,' which there's no such thing. It's like spelling diamond differently, when it's really a cubic zirconium. Is there the same value in a cubic zirconium as there is in a diamond. I don't think so; it's not a precious stone anymore. It doesn't have the characteristics or the properties of the wood. And to an untrained eye, to an untrained salesperson, they're going to represent it; they want to make the sale."
To combat poor quality, Cohen says it's important to both educate yourself and your customers: "Is the product stapled together or is it glued together. Is it made in the U.S.A.? Are there warranties and customer service available. Is it engineered to withstand wind shears or snow loads? Who backs the products? Those are the kinds of questions you should ask, and educate a consumer on what to look for in a quality structure."
Other manufacturers agree the quality of Asian gazebos leaves something to be desired, but disagree that the products represent direct competition. "We really haven't noticed that being a big issue for us, for a couple of reasons," says Ted Visscher, vice president of sales for Visscher Specialty Products. "Number one, we're not necessarily seeing the quality coming out of Asia with the gazebos. Number two; they're also not using the right species of lumber. They're generally using an Asian hardwood. The products are not built of a western red cedar. Also, the structures aren't built really as strong as they need to be for the North American environment. We run into issues with snow load."
Big Bad Box Stores
The gazebos coming to the States from Asia, along with structures made of other materials, are often sold at the — you guessed it — big boxes, like Lowe's and Home Depot.
"Some of the Home Depot-type stores do get things made of fabric and metal that they can sell for a few hundred dollars, and we don't have anything that we can sell for a few hundred dollars," says Ruth Hunter, owner of Sylvan Woods.
Service, of course, is the big gun in your competitive arsenal against the boxes, as noted by both manufacturers and dealers.
"I think a product like an enclosure needs a little bit more personal direction and information from the salesperson right away," says Collin Hobbs, director of sales for Sequoia Spa Shelters. "If someone's going into a spa showroom and they have one of our enclosures on the floor, that salesman, while he's selling that spa can just gradually throw some things in about an enclosure and what it does and what it's made of, and it kind of starts the ball rolling. At the big box stores, you're not going to get that. People are pretty much on their own there. And we have rooms that are up to 10 feet by 14 feet, and it's harder to see those in a Home Depot or a Lowe's, just because of the space. Those places are pretty crammed with everything that they sell."
"Independent dealers and momand-pop spa stores, they out-service the big box all the time, and that's where we feel the extra margin is made on their end and our end, also," says Gary Rozendaal, account manager for Visscher Specialty Products. "The mass merchants are strictly based on price; that's the only way they do business."
After-sale servicing of gazebos is another perk offered by dealers that big boxes don't offer. "Most generally, with the big boxes, the customer takes it down and brings it back in and shows them a bad part," says Jesse Roberts, owner of Roberts Pool and Spa, Omaha, Neb. "The customer has to reinstall it himself or hire a handyman. Like we tell them, the purchase and installation is just a small, small portion of owning that product. It's going to sit in your backyard for years and years. The purchasing certainly has to be a pleasurable experience and something that we want you to enjoy also, but the enjoyment of that product is going to come after you get it home, and that's where the box stores fall down. They're not there to support it, to back it up, and then the first time you have an issue, you've either got to mail in a part or fill out a warranty. There's no person to call and say, 'I need to get one of your guys out here to look at this, I've got a problem.' They're not going to do that."
Roberts' crew is also called on occasionally to fix an enclosure bought at a big box. "Customers will call our service department to come and fix an enclosure they've bought at a big box because they can't get anyone out there to fix it," he says. "Actually, in this particular instance, the skylight around the structure kept leaking on them when they were sitting in the spa, so we had to have our guys go out there and pull the skylight off. They couldn't get any help from where they purchased it. And it's not a specialty of ours, but to assist our customer, we took that job on."
Custom work by deck builders can also bite into your enclosure business, and some dealers have chosen to deal with it in an advantageous way. "Where we try to gain a competitive edge is, instead of just selling them a spa and leaving it at that, is to really sell them the whole backyard landscape, even though we're just one part of that whole procedure," says Gary Sharpe, general manager of Polynesian Pools, Virginia Beach, Va. "We have a lot of good deck people that own their own companies that we've hooked up with. And through the years, we've had some designs that they've helped us come up with, or we've kind of brainstormed together."
Rather than ceding sales to deck builders, some dealers have taken a page from the big boxes and can compete with builders on price.
"Our customers have even asked if they can have their deck builder come in and measure the gazebo on our floor," says Roberts. "Generally, the customers that end up going with us, they find that having someone come out to build it is going to be more costly than it is to buy in the prepackage because in volume we get a better price on it. So pricing actually seems to win on those situations."
Hitting The Home Shows
Many dealers have historically found displaying at home shows to be a good way to increase sales in a competitive market, but their tactics for the shows have been changing with the times, and largely as the online marketplace continues to grow.
"We've started changing our approach on these home shows, because I guess you've got a focused group out there that is looking for home improvements and things to do in their homes," says Roberts. "In the past, it was a very good selling venue. We'd always have a gazebo and spa package that was a home-show special. Now with people being able to get online and shop a multitude of different stores and product lines, we've seen sales drop off at home shows. The interest is there, and the people are coming, but they're not actually buying on that weekend. When you put up 'sale,' and 'home-show special — this weekend only,' they can go home and get online and say, 'I can get that price most of the year; it's not a homeshow special.' They're not motivated like they were in the past.
"We are doing as many home shows as the past, we're just changing the way we approach it. We're changing it more to directing them back to our store and an educational forum. We look at them more as a marketing opportunity instead of a sales opportunity, and by marketing I mean getting out in front of customers and saying — again attacking box stores — saying to them, 'Here's what you want to look at, here are some questions you need to ask before you buy. How long is it going to take someone to respond to you, after you get it home.' We tell them to ask those questions of the big box stores."
Internet: Friend Or Foe?
The Internet, though it has provided customers with more options, has largely benefited the gazebo market, according to dealers and manufacturers AQUA spoke with.
"I think it's more of a comparison factor, that they look at the Internet and then come back and say, 'Hey I can get it for this much on there,'" says Rob Anderson, president of Poolside Services, Little Canada, Minn. "But they don't really buy it on the Internet, they're just keeping us honest. It's not competition, it's just another source of information."
Manufacturers are harnessing the power of the Web to make it easier for their dealers, as well. "I actually don't see it as a competition to us; I see it as a growing connection to our business," says Hunter. "We have a Web site, which we've had for a few years. More and more I'm getting individuals contacting me through the Web site, saying, 'I want to buy your soand-so, where is a dealer.' If we have a dealer, we love to refer. If we don't, we'll talk directly with the person. We have a couple of dealers that have a site where you can buy products right on their site, and they've got our products pictured on their site, so we drop ship to their customers. So the customer contacts them and the dealer contacts us and we can drop ship all over the country in one step, and that has increased our sales also."
Other manufacturers, realizing that face-to-face contact with dealers is sometimes difficult, are creating Web sites that function as virtual contact points for their dealers. "We've invested a lot of money this year on setting up our business-to-business Web site, where dealers can log in, place orders and download pictures," says Rozendaal. "Let's be honest, it's going to be the next way of doing business. You'll still need face-to-face contacts with your key dealers, but the actual processing of the orders, the administrative stuff, all that is going to be done on the Internet. So we're using the Internet to drive the customer interest to our dealers. Instead of having our dealers do a lot of marketing in their areas, we're going from a top-down view. We're doing the marketing, we're getting the leads, and we're driving them to the dealers."
Competition to sell enclosures will always be around, but the future looks rosy. Chinese and Southeast Asian imports, though presenting real competition, have yet to flood the market. Home shows, while their character may be changing, are still a great opportunity to market gazebos. Take advantage of the Internet and accommodating manufacturers. Steady enclosure sales may just become an open and shut case.
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