Follow the trends on water
Darren Vaux takes a look at some key emerging trends in the global boating market.
The American Discover Boating campaign is the global gold standard for boating lifestyle promotion on behalf of industry. Led by the National Marine Manufacturers Association (NMMA) the program uses a wide range of marketing and communication channels to put boating into the minds of consumers. Supported by an industry-based funding model, the program has substantial resources at its disposal to achieve presence in a crowded marketplace competing for the recreational dollar. With over 800,000 followers on Facebook and extensive video content on Youtube the program articulates all that is good and desirable about boating.
So what can we learn from this? There are subtle differences between the American and Australian boating lifestyles. The USA, for instance, has substantially more inland rivers and lakes whereas Australian boating is predominantly in coastal estuaries. This, in part, explains the popularity of pontoon boats in the USA. There are, however, more similarities than differences.
The biggest similarity and biggest challenge is diversity. There is no singular boating lifestyle. We have to connect with people of all ages, gender, race and interest - dinghy sailing, paddlecraft, tow-sports, fishing, racing, cruising, superyachts. Consumers also have access to a wide range of ways to ‘escape’. Travel continues to be more and more affordable and flexible with platforms like Expedia and Airbnb. It is these challenges that make the Discover Boating approach so interesting.
“Vacation on Demand” taps into one key resource that constrains consumers: time. Why wait for your annual leave to go on vacation? With a boat you are on vacation every weekend. You don’t even have to own the boat as Discover Boating now introduces peer-to-peer boat share and boat clubs as a way to participate in boating. The emphasis here is to grow participation in boating and from participation, grow boat ownership. This represents a shift from ‘Here’s the boating lifestyle, buy a boat, enjoy the lifestyle’ to ‘It's easy and inexpensive to experience the boating lifestyle, build confidence and knowledge, engage in the boating lifestyle in some form’. It is something that we need to consider as an industry.
Last November I attended METS in Amsterdam, the world's largest marine equipment trade show and the litmus test for industry innovation and prosperity. In conjunction with the trade show there are a wide range of seminars and meetings all focused on the trends and future opportunities for the industry. There were a few trends that stood out for me.
Services not sales
“In the future there will be no products only services.” One of the more controversial statements that the boating industry is not quite ready for. The principle is that consumers don’t own products but rather subscribe to a service that gives them access to the product or products. The automotive industry has already made significant inroads into this market. Porsche launched Porsche Passport in the USA in October, 2017 whereby, for a monthly fee starting at US$2,000, consumers can access seven Porsche models for personal use where all costs are included excluding fuel. For an increase in monthly fee the available models and associated value increases.
Whilst this is not significantly different from the current car and boat club models, the main point here is that Porsche is joining other manufacturers (OEMs) in offering the service direct as against leaving it to third party providers. In essence, it is a financial instrument. A potential driving force for this is the custodian responsibilities and recycling for end-of-life vehicles.
At present, it appears that the boat manufacturers just want to build and sell boats, but the question remains, is this sustainable? Are the consumers ready for another ownership model? My view is that it is more a matter of when rather than if. In all probability the boating industry will adopt this approach as a reaction to declining sales and as a platform to make boating more accessible and affordable. I wonder who will take the proactive step?
Boat ownership as a proportion of population is declining and end-of-life boats are becoming an increasing problem. A number of European marinas are reporting vacancies where historically they have maintained waiting lists. A leading cause has been the aging of boat owners and their departure from boating at a greater rate than they are being replaced by younger boat owners. This is essentially evidence of the trends outlined above.
The end-of-life boats are becoming a significant issue in Europe with the biggest issue being that the last owner is often the least financially equipped to deal with the cost of disposal. As a consequence, boats are being abandoned in marinas where the marinas are burdened with the legal challenges of dealing with the custodianship and disposal of the vessel. As the early GRP boats get to the end of their serviceable life the burden of disposal will become more and more apparent. The trouble with fibreglass is that it is not presently economically recyclable. At best, it is down- cycled as a crushed fibre re-enforcement in concrete and other moulded products. More often than not, GRP boats are typically cut up and sent to landfill which is clearly not sustainable.
When will boats follow the automotive industry and have mandates for recyclable content? It would appear inevitable and this may lead to innovations in materials and recycling techniques to improve the outcome. It will also be interesting to see if boats follow cars in the value attributed to old and classic brands and models where substantial investment is applied to restoration and retention.
The superyacht sector is going from strength to strength. The boats are getting larger and one of the biggest constraints remains destinations and berthing. The South Pacific including Australia remains an underutilised destination and represents an excellent opportunity for the industry in the medium to long term. Australia has an excellent opportunity to capture a significant proportion of this business but ongoing reforms in import/export provisions and tax implications need to be developed to make this as easy as possible for visiting yachts.
This year will see an ongoing and accelerated change in consumer behaviour where traditional markets are disrupted as we have already seen through platforms like Airbnb, Uber and Amazon. Consumers expectations are changing and the marine industry has excellent products and services that can attract the imagination and wallets of consumers providing that we adopt innovation in both our delivery and availability of these products and services.
About the author
Darren Vaux is director of the Boating Industry Association, vice president of the Marina Industries Association, past chairman of the Boating Industries Alliance Australia, director of the award-winning Empire Marina Bobbin Head in Sydney, and the Australia, NZ and Pacific Islands representative for bedsonboard.com.
This article was first published in the February-March 2018 issue of Marine Business magazine.