After Labor Day there's usually a pretty good bump in spa sales. Is Watkins doing anything to take advantage of those favorable conditions this year?
As the sales curve goes in the course of a year, there's a big amount of business done in the spring, there's a little bit of a lull in the summertime, and then another little hump or spike in the curve again in the fall. Traditionally we do see that.
As for that period of time, we aren't planning anything different from what we do on an ongoing basis. We're promoting our products and our brands regardless of the time of year. The support we give to our dealers in marketing materials and ideas, we do that on an ongoing basis, and we'll do it this year, as well.
Do you think advertising to consumers is a good way to reach out to potential buyers?
It's one way to reach out to consumers, but I don't know if it's any more important than any other vehicle at this point. I would say, clearly, the Internet is an important way of reaching customers, perhaps even more so than television.
Speaking of the Internet, do Watkins dealers have a hard time selling against online retailers?
I don't think our dealers have a hard time selling against online retailers. They do compete against them for sure. However, it's really a matter of opinion whether the people that buy online shop in stores or not. There is a segment of people that just want to buy online. The challenge relative to the online retailer is that, when it's all said and done, the way in which they compete is price. Dealers have an advantage in that they're bringing an experience to the customer. They provide a showroom so the consumer can come in and have a shopping experience. Then after they own the spa, the dealer provides them with sort of an ownership experience, giving them support and answering their questions and all of that. The Internet retailer doesn't have a showroom, and doesn't really provide that ownership experience. The dealer has a huge advantage to be able to bring in that level of support.
Ultimately, consumers have a value equation in their mind when they're comparing.
Can you talk a little bit about the new International Hot Tub Association?
Steve [Hammock] and myself are on the board as charter members and we're helping move this thing forward. We did not start it, but we were asked to be involved, and we said yes. We're still members of APSP, so we're going to have dual membership, one in IHTA and one in APSP. And I've said this before and certainly feel compelled to say it again: We see the IHTA as being a complementary association, not a competitive one, with APSP. We're still very active in APSP, providing resources, technical expertise in the areas that are required, and we'll continue to do that.
Our primary goal at IHTA is to defend the portable spa industry from what we would call unnecessary government interference that's coming in the way of legislation and regulation. I think there's never been more potential threat of regulation in our industry. It's sort of flowing downhill into the hot tub industry, which sometimes gets linked into the "recreational water" category with swimming pools. But we are nothing like a swimming pool, so we see the IHTA as being the national organization that's focused 100 percent on the hot tub industry. And our No. 1 concern is protecting that industry, defending that industry against regulation and legislation.
So we're in a place right now where we're looking for members, because members bring the funding that is required to do those things that are in our best interest. There's definitely been a building of the membership roster. There's room for more, but we're moving in a favorable direction and we're staying true to what our goals are.
Is it difficult for you to reach out to competitors when looking for new members?
I do make outreach calls, and I personally don't find it a difficult thing to do. I know many people in our industry and the conversations we have center around what our charter is, and they have to make up their own minds on whether they want to participate. They either see the need and say, "Yeah, I think that's a worthwhile cause and I'm dealing with the same issues you're talking about, and having an association that's acting on my behalf seems like a good idea," or they don't. And the investment we're talking about is not substantial. It's a decision that they ultimately need to make. But I don't find it difficult to ask for, and I don't take it personally if they say no. I respect their decisions. They're business decisions.
Will the association look into category advertising?
I think it's way too early to even suggest that that's in our plans. I credit people like Lauren Stack, Chris Robinson, Larry Giles down at Vita Spa, and many others, for the effort they put into the Hot Tub Growth Initiative, and I think it would be foolish for the IHTA to try to duplicate that. They had to suspend the effort because they weren't able to bring it to pass. So I don't see us expending a lot of energy trying to duplicate something that's already been done. It's sitting there, and if there's an opportunity for them to pull that off the shelf at another time when people in the industry are more apt to want to participate, they should do it.
Back to the idea of government relations. Do you think efforts aimed at regulation arise from ignorance about how much energy and water a hot tub actually uses?
Clearly. Again, the nature of our product is different than a swimming pool. So there's a misunderstanding, but who comes to the table and says, "I represent the hot tub category, and we're not like what it is you're focused on"? It's unique and shouldn't be lumped in with the swimming pool category. That's really the crux of what this is about, and I think hot tub manufacturers should hear that message and say, "Yeah, I want to be part of this." I think if they're honest they admit they've had to spend a lot of money on CEC and VGB, and to have somebody that's monitoring it and dealing with it and representing their interest is a big plus.
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