One afternoon about eight months ago, Soundings Trade Only editor-at-large Bill Sisson called me. The call itself was not unusual; we often spent a few hours a week talking business, news, politics and fishing. But this conversation was different. Sisson had received an unsolicited column from an analyst named John Hughes of Marine Metrix, an outfit that provides market intelligence for the marine trade. Sisson wanted to powwow about whether running the piece would cause alarm or make the magazine seem alarmist.
It was a reasonable concern. Hughes’ column painted the picture of a soon-to-burst “Covid bubble” — a term I had not yet heard — and the predictable correction that would follow. Nobody in business, marine or otherwise, wants to hear anything about bubbles bursting or financial corrections. And at that point, everyone from boatbuilders to engine makers to electronics manufacturers to components suppliers was celebrating unprecedented sales and demand so strong that it created wait lists for boats as long as three years. The horizon looked bright from the industry wheelhouse in early 2021, before we all fully understood how many of those delivery logjams were fueled by a broken supply chain, Covid shutdowns and other factors.
We ran that column last May and nervously awaited the pushback. But to this day, I have yet to receive a call, email or any other criticism. The silence was a relief, in a way, but what it really meant was that the industry was starting to feel what Hughes had written about. He was just one of the first to say it out loud.
Only a month after Hughes’ piece ran, Soundings Trade Only columnists started openly writing about the Covid bubble, the looming correction and ways that industry stakeholders needed to begin preparing for a normalization of sales levels. Suddenly, experts urged everyone to think about pivoting, diversifying and evolving to a new normal that was about to become reality.
Today, seven months after that column ran, it seems as if most industry stakeholders have made peace with the idea that the industry is headed back to the way things were in early 2020. New-boat registrations are down, dealer sentiment has declined, showrooms are filling with inventory for the first time in almost 18 months — meaning many dealers will be borrowing money to finance floorplans again — and waiting lists for new boats are shrinking. Smart business owners are figuring out where the money is in this market and adapting their day-to-day operations accordingly. Naive business owners are hoping without a strategy that it will all just work out.
The good news looking forward is that demand for boats remains reasonably healthy. People are still yearning to get out from behind their digital screens and into the outdoors. Ever-growing numbers of people are trying fishing, the boat-buying gateway drug. In addition, technology is making boating safer and more fun. So there’s reason for optimism amid the anxiety that is filling many marine dealerships.
The worry is clear in the data we’re seeing from our monthly Pulse Report dealer surveys. Meeting in person with those dealers to better understand their thinking is one of many reasons I’m attending the Marine Retailers Association of the Americas’ annual Dealer Week conference, which is only a day away as I type this.
I’ll be attending some of the seminars, too, including a couple regarding service- and parts-department strategy, and leadership pathways — seminars that should help to clarify what is making today’s successful dealerships, well, successful. We’ll share any important lessons learned with Soundings Trade Only readers, without any fear of seeming alarmist. After all, our continuing goal is to bring the industry important information before it appears anywhere else. The news on the ground may be good or bad, but it’s always news that we know our readers can use.
This article was originally published in the January 2023 issue.
