Chuck Rubin Q&A

The West Marine CEO spoke with David Conway about the reinvigoration of the marine industry retailer.

Chuck Rubin joined West Marine as CEO in December 2022 and has overseen critical changes to the company’s store fleet and technologies. Previously, Rubin led several Fortune 500 companies and top retail brands, including being CEO of Michaels Stores and Ulta Beauty, and president of North American retail at Office Depot.

Rubin recently spoke with Soundings Trade Only about West Marine’s aftermarket products strategy, its reinvigoration as an authentic marine industry supplier, its Pro-led initiative and more.

This interview has been edited for length and clarity.

You’re a boater who’s been CEO of West Marine for more than two years. How has your job informed your boating experience?

Boats have become more complex. There’s more and more technology on them, which is not a surprise, but what has been a bit of a surprise is that the industry isn’t as consumer-focused as I expected. Boating is a fun thing, but with the increased complexity as technology continues to expand, there’s a lot of industry lingo, which, if you’re a very dedicated technical boater, may be appropriate. But there’s a whole lot of people who have come into boating since Covid, and the industry is suffering through the post-Covid hangover still. Those people, and even people like me who have been a boater for 30-plus years, who know how to run their boat safely and enjoy it, may not know how to fix things on it.

It’s hard to find a trusted authority in this industry if you’re a customer, especially on the consumer side. And ultimately, I think that’s what makes West Marine so compelling. There is a void for somebody to be able to provide the product and the know-how and the convenience and the delivery to that customer, and we’ve made great strides at West Marine, but there’s still a way to go. So that twist has been a little different than other industries I’ve had the good fortune of running companies in.

Regarding West Marine’s footprint, last year, there were 232 stores. Is that about the same count for this year, and what are the plans there?

No, we’ve closed about 20 stores since then. Let’s go back a step and understand that we go to market in three ways. We have brick-and-mortar. We have two websites: one dedicated to consumers and one dedicated to the B2B customer, which we call Pro. And then we have our Pro sales force, which has dramatically expanded in the past two years, give or take. It’s doubled from what we had before, and we’ve added in a lot of new capabilities. 

There’s still some rationalization of the stores that has to be done, but we reformatted the store or re-purposed the store to a degree. It clearly welcomes walk-in customers, and we have consumers as you would expect, but a significant portion of our in-store business is actually our Pro customer who also uses the store as their back room for products. We’ve also layered in fulfillment capabilities into our stores so that 90% of all of our products that are bought online or bought by a Pro customer are shipped out of a store. That has allowed us to get the product to the customer a lot faster. So, the purpose of the store has evolved a bit. They certainly welcome walk-in traffic, but they’re now a fulfillment hub as well.

West Marine opened its first Pro store in Chicago last fall. Have more opened since then, and are you able to get those deliveries out according to the schedules that you like?

Yes. First, let’s back up for a second and just look at the strategy of the company as a whole. Over the past number of years, the company strategy has bounced around a little bit. 

The belief we had is that the company needed to get back to what made it great. So, we have refocused on boating. When you wake up on a Saturday morning and you need a bilge pump for your boat, we want to be the provider of that. We also have re-prioritized Pro, which for a long time had been kind of at the back of the bus in terms of our strategic focus, and now we actually think it’s at the front of the bus. And in fact, we call our strategy Pro-led.

What that means is that we clearly welcome consumers, but when you take things from a Pro orientation first, it forces you to focus on boat parts, the things that you need to keep your boat running well and the things that you want on your boat, like electronics, et cetera. But it also forces you to think things through in terms of jobs that somebody would do on their boat. To give you an example, it does no good for a customer if they’re changing spark plugs on their boat to just have one spark plug in stock in the store. Most boats today have multiple batteries on them. If you only have one battery in stock and you want to change the full assortment of batteries on an individual boat, you’d need more than just the one. So that Pro-orientation has pushed us to have deeper inventory on hand in the store or available the same day or next day, which are new capabilities that the company has.

This guided our belief that we could open a revised store format that was Pro-focused, which is what we did outside of Chicago. The store opened in October. The store is about 9,000 square feet. I think it’s a very unconventional layout because we had to take the real estate that we could find, but it has this focus. It has limited apparel and limited footwear, but it’s a real focus on boat parts and the things that a customer would want and need. The store has done fantastically well.

The plan is that we’ve not opened any others like that, although the learnings from that store have influenced what we’ve done across the fleet of stores. We are going to retrofit a couple of existing stores, leveraging more of what we did in that Chicago format. One is what we call a hub store. It’s a bigger footprint store. It’ll have the full boat parts assortment, but it also will carry our apparel and our footwear and all the lifestyle things. But then the second store will be a spoke store, and that is a smaller footprint, and that’ll be more focused on just core boating. But the hub will feed the spoke for a customer who may walk in and not find what they’re looking for in the spoke store. From the hub, which is only 10, 15, 20 miles away, we’ll be able to run any product that the customer wants in the spoke from the hub, the same day directly to the customer. It allows us to be more efficient with the store operations, and ultimately it allows us to provide a better shopping experience for the customer, whether it’s a consumer or a Pro customer.

And is that setup of a hub and a spoke going to be replicated throughout the country, or on a case-by-case basis? 

Well, the marine industry has been tough for a while, and people are all looking for growth as we are. West Marine is in a significantly healthier position today than it was a couple of years ago, but we’re testing a lot of different things in the company. This, we believe, is very attractive for the future of our store fleet to have this hub-and-spoke model. But we’re still in test mode. Chicago gave us a great deal of confidence that our hypothesis is right and results are encouraging, but the next step is to get two stores retrofitted. We expect that that’ll happen sometime in the second quarter. And then the belief is that these two will be successful, and then we will revisit how we then expand this across the rest of the fleet.

Do you want to speak at all about any news on the credit facility this past summer? You mentioned that West Marine is in good financial condition. 

The only thing I would say is that I think it’s widely known that West Marine’s gone through some challenges as the industry has over the past couple of years. But today, the company is financially very stable and we have a strategy that is focused on our customer, and we have the support of our investors as well as we have 3,000 crew members, which is what we call our employees. In my career, I’ve had the good fortune of running other good retailers. I’ve never had as experienced and committed a group of crew members, especially in our store organization, as we have at West Marine. We’re in a very good place.

As we’re talking about this hub and spoke, we’re able to test new ideas. We’re testing new ideas in marketing, and we’re testing new ideas in merchandising throughout the company, but they all come back to being focused on delivering a customer solution. We have to think in terms of projects that the customer wants to do. It’s everything from, if I need to replace my bilge pump, do I need clamps? Do I need hoses to get that done? And then how do I do it? Give me a video that shows me how to actually do it, and we provide that content as well. And then that’s for the DIY customer. If I, as a boater, finally get to the point where either upfront I don’t want to do it myself, or I start to do it myself, and I realize that I’m over my head, we can connect that customer with one of our Pro customers who will then come out and install it for them.

You’ve spoken before about your efforts to reinvigorate the crew members as authorities in your stores and the efforts to bring more tutorials and material to the website. How are those going?

We are providing more training in more forms than we have before, but there’s always more to be done. As an example, we have in-person training with all of our Pro sales reps coming up in two or three weeks in person here in Fort Lauderdale, in store. We have online training that we provide.
We’ve introduced a bunch of new technology into the company. We have handheld devices called Deckhands that a crew member in a store can use not only to place a product order if they need to help a customer, but also look up content about products. And, if there’s no customer that they’re helping, say at eight o’clock on a Saturday night when it’s usually not all that crowded, that’s an opportunity for the crew members to go through our training. So, that has stepped up. 

On our websites, we already have a lot of content. We have a lot of written content, we have a lot of video content, but there’s so much more coming. We’re very bullish about leveraging that. And then the final thing I would call out is when you look at our two websites, like all websites, we have search bars on there, and the search functionality is pretty good, but we expect that this year we will layer in a much more sophisticated AI capability that will not just allow you to search for a particular product, but it’ll answer questions in a more conversant kind of way. As an example, I need to change the oil in my 1986 Malibu surf boat. What do I need? The results will come back. All of these things are under the banner of training, and it ties into being Pro-led. If the pros trust us, then consumers can trust us. And by the way, I think we’re the fastest growing Pro distributor in the market. We’ve gained significant market share in the past year and a half.

Can you speak a little bit about the news with Suzuki?

We announced at the Miami Boat show that we’re going to be offering Suzuki parts and accessories and smaller motors in our product assortment. It fits with what we’ve said about being authentic, about being credible in this space.

It’s hard to be that if you don’t have OEM products. We’re pleased that we carry Mercury and Yamaha products. We anticipate that we’ll be making more announcements in the coming weeks and months. Again, it is based on what our customer wants. It is a forward-looking approach we’re taking. Some in the industry are not happy that we’re carrying these OEM products. But the reality is that we all need to be focused on keeping people on the water. The more people are on the water, the more enjoyment they get. From a business standpoint, the reality is that the more you use a boat, the more service you need. And there’s always a boat-envy aspect to it, that I’m always admiring other boats and coveting the other boat. And I’m sure there’s a cohort of the population that continues to upgrade because they fall in love with something that they see out in the water. But the reality is that people want their boat fixed and to be able to get back on the water faster. And the current service market of dealerships is that they do very good work, but they can’t turn the boats fast enough. 

Our customer base is our B2B customer base. Many of them are mobile techs. They are working seven days a week. They want the flexibility of getting great products, including OEM products, and they want to get that customer back on the water. Our view is that we are good for the industry as a whole because we’re able to provide products to those B2B service people to get boats fixed faster and get that end customer back on the water faster. And that’s good for everybody.

Do you see across the product line what’s hot and what’s not in the last few years that is notable or surprising? 

Technology and technological advances are always demand-creating. We’re one of the biggest sellers of Starlink. And for a relatively small company, we kind of punch above our weight because we’ve been so successful with it. But there’s technology in so many of the products. Clearly, within our electronics for Garmin and Ray Marine and others, there’s always new technology coming out. 

But there’s another aspect to technology that I want to call out. Through technology and some other changes that we’ve made, the time for us to deliver to a customer when they buy something online, what we call a click to delivery — from the moment you click on an item to buy it to the moment it shows up at your doorstep — two years ago, that took more than a week, while today that is between two and three days on average. Now, a bunch of that is showing up the same day as well, but that’s enabled by technology and a bunch of process changes that we’ve made. 

Another example of technology is that we just launched an app for our Pro customers and our B2B customers through Apple and Android. On this app, that B2B customer can do pretty much anything they want. They can reorder products, they can pay an invoice, look up an invoice, order products to pick up in a store. The Pro customers, based on the volume they do, get a discounted price off of retail. They can scan an item when they’re standing in a retail store and see what they will pay for it. This app makes their life easier. And if their life is easier, we think that they can do more business with much less hassle in the long run. They’ll be able to be more efficient with their time. And we think that’s a very good thing.

What about demographics? What is happening with who’s buying and what they’re buying?

Generally, the boater age spectrum tends to skew older, which may not be that surprising. Boating is a time-consuming, sometimes complex, and quite often expensive hobby to have when you’re a casual boater. And I think you’ve seen that with these boat membership clubs that have popped up, which make life so much easier. I just make a reservation, go out on the boat, bring the boat back, and I walk away. I think that younger customer, too, who has grown up in the digital age and is used to just buying stuff on their phone and having it show up, they’re looking for what we are building at West Marine. They’re looking for a faster, more efficient authority to help them, to put them at the center of what they need, answer their questions quickly, tell ‘em what product they need, get the product to them quickly, show them how to actually install or use the product. And I think the better we do that, the more that younger people will be inclined to get back into boat ownership and more boat usage.

You’ve spoken before about how the power dynamic in the retail landscape has switched from retailers to consumers. You’re bringing more tech and speed and efficiency to West Marine. But how have you seen that balance you’ve spoken about playing out?

The orientation to put the customer at the center of what you do has to be so keen in everything you do. That customer orientation is paramount. If you’re not extremely customer-focused and make life as simple and easy and solution-oriented for what that customer wants, then your business is going to be challenged. 

What our B2B customer wants can be quite different than what a consumer wants. Our B2B customer wants availability of product and to be able to get it really fast and to know when it’s going to come in. If you tell me it’s going to come in on Tuesday, then they plan their work schedule on Wednesday for that boat. So, it better come in on Tuesday. They want easy access to their account and to be able to pay us for an order, et cetera.

On the consumer side, maybe they want more explanation about how something works, maybe more of a social interaction, maybe to come into a store for a seminar to see how to use some new technology that’s come out. But the thing that ties it all together is that if you are just fanatical about paying attention to what the customer wants and build around that, things will be good in the long term. It sounds very simple, but it’s harder to execute. And in this industry, it’s a bit more of a novel idea than I think it is in other industries.

As I mentioned before, the past year and a half, we’ve made huge strides here, and we have gained significant market share. So I know it is working. It would be great if the industry as a whole stabilized a bit more, but in the meantime, we continue to do what’s right for our customers, and I think we’re going to do just fine.