16 Jun What Does the Future Hold for Hot Tub Retailers?
Most of us within the hot tub industry understand why we’ve chosen to sell this product. Boiled down to its essence, hot tubs make people happy. Most of us simply find it gratifying to sell a product that makes people feel so good, especially when there is also a chance for profit.
However, this product category has challenges. We are a small industry. Hot tubs don’t seem to have significant growth momentum, at least not in North America. We don’t have a robust industry-wide marketing campaign, nor a great way to fund it. And to date, we haven’t had ready access to reliable industry insights, backed by data, to help us predict the true potential of our industry and, ultimately, the future of our own businesses.
That is the goal of H2Insider going forward and this article is the just the start. We are compiling expert insights and data to help you make informed decisions to ensure profitability and optimize business performance. At H2Insider, we care about this product category and genuinely want to see both hot tubs and hot tub dealers succeed.
So, let’s take a look at where we can reasonably expect the hot tub industry to go from here and what we can do about it.
Where are we today?
Currently, APSP industry statistics estimate that, of the 125 million US households, there are roughly 5.8 million hot tubs owned. Based on these figures, about 4.6% of US households and 1.8% of people have a hot tub at home.
Because of space requirements and economic factors, single-family detached homes are the traditional target for hot tub retailers. With roughly 75 million single family homes in the US, accounting for a modest number of hot tubs in condos and apartments, the percentage of these households that own a hot tub is likely closer to 6 – 7.5%.
However, H2Insider recently completed a survey of the general US population, age 18 and older with a distribution of ages being fairly uniform within the group. In this survey of over 500 people, 8.1% of respondents indicated that they currently own a spa, and just over 18% indicated that they had owned a spa at some point. These response percentages may indicate that industry estimates are actually a bit low and/or that some respondents consider community spas, family member’s spas, or other access to spas “owning” one.
Whichever data set you look at, it’s clear that hot tub owners are a relatively small percentage of the overall population. That said, the relatively low level of market penetration is not necessarily surprising, given ticket size, space and energy requirements, maintenance requirements, and general perception of hot tubs. But the numbers do indicate that there is significant room for growth and consumer education. Looking forward, this presents an opportunity for spa retailers and our industry as a whole.
Where are we going?
Google Trends is an incredible tool and one of the best places to look for interest trends for nearly any topic. When one types in “hot tubs” and looks at the relative statistics going back to 2004, it suggests that interest in “hot tubs,”, both worldwide and in the US, has declined to roughly 50% from it’s highest levels around 2008.
Google Trend’s Accommodation feature gives us another view of trending interest in hot tubs over time. This tool provides “accurate measurements of overall search interest,” by presumably combining search data from other product-related terms. Looking at these data points, it appears that there is actually a modest increase in interest in hot tubs over the last few years. Good news and a potential indicator that may point to the spa industry coming out of the Great Recession.
Sentiment towards spas
H2Insider recently measured overall sentiment of the general population towards hot tubs. In our survey of the general population, we measured attitudes about hot tubs in comparison to other large-ticket, discretionary expenditures. The other products listed were: Camper/Trailer, Motorcycle, Boat, Second Home, Vacation Property, ATV, Luxury Car.
When people were asked “Please rank the following in the order which you would be most likely purchase them,” a hot tub was either #1 or #2 for over 27% of people. Only Camper/Trailer, Vacation Property, and Luxury Car were higher in terms of being a top priority. This is a strong indicator that among other large discretionary purchase options, hot tubs are a product that a significant percentage of consumers would like to purchase.
There are some significant challenges for hot tubs. In the same H2Insider survey mentioned above, respondents were asked to indicate their interest level in owning a spa. Just under 8% of people indicated that they were very interested and 19% indicated that they were somewhat interested.
These numbers nearly mirror the numbers of people who reported to actually own or who have owned a spa. This unfortunately does not show that there is currently significant unmet demand. So, the challenge for spa dealers and manufacturers is to find ways 1) to enhance demand and frequency of purchase with those already interested and 2) to move those with less interest in hot tub ownership into the somewhat and very interested pools.
Another somewhat unfortunate finding of our study was that 37% of total respondents indicated they were very uninterested and nearly 14% were somewhat uninterested in spa ownership. The specific reasons for this will be discussed in future articles, but in summary this means that hot tubs are unlikely to appeal to over 50% of the general population in the short term.
Additionally, 21% of respondents were neutral, which is a fairly large result for this answer type. An answer of neutral may signify general apathy or a lack of education about the product category. However, this group, comprised of tens of millions in the US alone, also represents an incredible opportunity. If spa retailers and the industry can discover ways to create awareness within this group, we could see tremendous growth.
It stands to reason that there are likely some negative perceptions, general disinterest, and a lack of knowledge about the hot tub category to overcome. Better business practices, better product features, enhanced category education and promotion, along with other industry improvements, however, are sure to help address these impediments.
After years of decline from 2008 to a low point around 2011, the product category is showing promise. The overall outlook for hot tubs is positive. In the US, the trend is beginning to turn upwards, and in other parts of the world, the trend is going way up.
Looking at the current trends only, there appears to be modest opportunity for hot tub businesses. So, if we as an industry continue to do things the way they have always been done, we are likely to continue to see an environment where 8% to 18% of the population considers buying a hot tub. However, there is a huge opportunity in the 21% of those who are currently neutral. If spa retailers and the industry can discover ways to create awareness within this group, we could see tremendous growth.
Business visionary Peter F. Drucker once said, “The best way to predict your future is to create it.” With hard work, focused strategy, smart marketing, great customer service, and investment in quality products, our industry—and each business within it—can and should continue to grow.
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