The Dive Shop of the Future

[Rick Murchison]

Another thread about shop vs internet pricing has prompted this thread... here's my vision of the dive shop of the future - within a decade, I think.
There will be no retail sales of major equipment at the dive shop of the future. There will be some manufacturer supplied samples for people to try, from those few manufacturers who survive the shake-out that's just beginning. The dive shop of the future will sell consulting services on gear selection to those who want it. They will sell consulting services on gear configuration and use to those who want it. They will sell small accessories but nothing major. The customer will either buy their own gear online, or the dive shop will act as agent for a fee.
The dive shop will sell instruction. There will be no "in house" instructors - instructors will all be part-timers who make a living doing something else, and who instruct for the love of it. They will make enough to cover their insurance, essential diving equipment and a few recreational dives of their own, but not enough to put bread on the table. Most of the instructional fees will go towards facilities upkeep for the shop, or there will be separate instruction and facilities fees.
The dive shop will sell guided travel, and will sell consulting on unguided travel. The customer will buy their own travel package online or the shop will act as agent for a fee. In the case of guided travel, the shop may sell the package directly, or may provide the guide for a fee while the customers make their own online travel and lodging arrangements. "Comp" spots will evaporate as resorts try to compete online with thinner and thinner margins.
Air fills will be more expensive.
The dive shop will perform service on equipment for a fee. It will be up to the customer to recoup any "warranty" covered charges from the equipment manufacturer/online sales outlet.
It'll be a painful transition, but once folks get used to paying for services rendered it'll all be just peachy.
Rick

 

[metridium]

Originally posted by Rick Murchison
The dive shop of the future will sell consulting services on gear selection to those who want it. They will sell consulting services on gear configuration and use to those who want it.
The dive shop will sell guided travel, and will sell consulting on unguided travel.

Uh, how would they be able to compete with the free advice on this board, for example?

 

[Rick Murchison]

Originally posted by metridium

Uh, how would they be able to compete with the free advice on this board, for example?

Free advice is worth every penny.
Rick

 

[metridium]

Originally posted by Rick Murchison

Free advice is worth every penny.
Rick

Better that than from someone with a clear conflict of interest.

And, no, that's not meant personally, Rick.

 

[jetblast00]

Hmm.... I think what you envision will happen at one point, but it will be somewhere about one third of the way up on the LDS rebound.

Everything in life goes in cycles, historicly it always has and it always will...

This is an oversimplification, but since there are too many variables, I'll bring up a few
The online/LDS price wars will eventually lead to many LDS's going under. but a few will band together and/or form alliances with suppliers and/or online warehouses to form chain stores. (*cough*ScubaNetwork*cough*) This will be a last ditch effort on the LDS part to remain in brick and morter, but they will be a newer age LDS and realize that the gear sales are going to happen online and they will roll with that, recouping by selling many many many specialised classes that you need to provide proof of completing to an online gear provider before they will sell it to you. This will be so because of the mutualy benificial agreements bewteen the two. (if no one knows how to use it, no one will buy it. if no one can get it, why would they train to use it...)

This will eventually lead people to realize that they are sick of the control and they will eventually start mixing there own gas, making thier own gear (*cough*FredT*cough*), and teaching themselves outside of this corporate structure. These indivduals will gravitate toward each other and start to form their own organizations (*cough*Halcyon*cough*GUE*cough*).

these organizations will then evolve into 3rd generation LDS's as you have described above... not really the total LDS of today, but beginning to be organized enough to be called a LDS. then eventually, people will be tired of paying high prices online when they can make their own the way the guys at the LDS do. Then when the online suppliers dwinndle, there will be a movement to make a lot of thing at once and sell it at the LDS because it's easier than making it yourself(*cough*Halcyon*cough*)... then low and behold, someone will come up with the brilliant idea that they can reach a lot more customers if they can sell the stuff online.(*cough*EE*cough*)

Lather, rinse, repeat.

I'm going to find a cough drop...

 

[fredk]

I beleive there will be very strict policing of the scuba industry by various levels of government in the future. Here in Canada it's not very far off, might scare some folks if they knew just how close and what it may involve for the average diver. They are starting to see that self policing by the scuba industry is really becoming a farse.

 

[Uncle Pug]

...will look like the LDS of today:

Larger chains competing successfully with (and on) the internet driving smaller independent shops out of business if they can.

Truly local dive shops in areas that support diving and have large numbers of both transient and indigenous divers will continue to thrive through location, service, reputation and loyalty.

The Small LDS in out of the way non-diving locations will continue to complain about the internet and struggle to stay in business and some will succeed because the owners and customers have subliminally entered into a social contract for mutual survival.

Dive shops will come and go as in any other retail market but those that survive and thrive will offer the best customer service and/or attract an ongoing stream of newbies.

Ebay will continue to give online dive retailers their stiffest competition.

Just what I think.

 

[TRUETEXAN]

As a small business owner, I was just wondering how this whole thing with the internet dive shops got started. I have been in several different type of resale businesses, in everything that I have ever been involved in selling, the dealer (me), has been protected by the manufacturer in that they held their dealers to certain stanards and didn't allow just anyone to whore out their products on the internet or mail order, and if you did want to sell on the internet or through the mail you still had guidlines as to how and what you could sell, and caps on pricing. I realize the internet age is upon us, and I appreciate a good deal as much as anyone, but I think some of the manufacturers have allowed this internet thing to get out of hand, and I also know from first hand experience that some of these internet companies are selling substandard equipment and it could wind up getiing someone hurt. Another thing is, how in the hell is it okay to sell someone whatever they want to buy over the internet without them having to show their C-card, this is not a good thing in my opinion. When all of the little local dive shops have closed down and somebody has a problem with their internet bought equipment, and they are heading out to the local dive site, but they hae to cancle their trip because the local guy that they drove out of business is not there to save the day for them, they might wish they had tried to support them a little more. No one should have to pay outrageous prices for dive gear, but I think we should try to support the local guys when we can.

Just my thoughts.

 

[O-ring]

This echoes what was predicted to happen with e-commerce in general. Sounds a lot like Amazon, doesn't it? Put the local bookstores out of business by selling more volume, lower prices, lower profit margin, but the volume makes up for it.

Problem is, people like hanging out in bookstores and they like hanging out in dive shops. I invariably buy something when I hang out in my LDS, but I don't think I would hang out there if they charged me to do so. Bottom line...this is life support equipment and training...if I can get it at my LDS, who is knowledgeable and backs up my purchases with warranties, I would much rather do so.

I think if dive shops can trim their costs significantly they can still stay afloat and sell gear. If the LDS didn't need to charge such a high markup (50%-200%) to turn a profit, the LDS could compete with "e-tailers". What are the main costs associated with running a dive shop?

Retail?
- Office Space
- Inventory
- Employee(s)
- Utilities/Misc G&A Expenses

Training?
- Classroom
- Pool
- Instructor Salaries
- Supplies

Travel?
- Divemaster/Instructor
- Coordination time/expenses

What about one full-time instructor who doubles as retail manager for the shop. The other instructors are part timers like you mentioned. Offset the cost associated with the training by outsourcing the pool facilities to the local YMCA or another organization that will rent pool space at a reasonable amount. This could also be done with the classroom (if cheaper)...host classes at a nearby church or other organization that will donate the space or at least offer it at a reduced cost. Carry less high end inventory on site to reduce inventory carrying costs, but have strong enough supply chains to get things to people quickly when special ordered. To do this, they could use strong manufacturer relationships and have an "e-catalog", whereby customers come in and try out the one piece of sample gear in the shop, view options and colors at a kiosk, and if the customer decides to purchase it the LDS gets it from the manufacturer and gets a percentage of the sale.

Alternatively, like Rick mentioned, they could drop most of the retail end, lowering real estate costs, and make money on after sale service or by offering warranties for equipment purchased online or through other retail outlets.

Either way, I think Rick has a point...it is going to be hard for any LDS to continue to count on the revenue from equipment sales when Internet retailers are undercutting their prices by 50% or more.

Rick, good thread...I hope we can continue with the analysis.

 

[Scubaroo]

A question I have is, how do online stored obtain some of their inventory? For example, Dive Rite have a page on their website at the moment slamming LeisurePro about reselling Dive Rite products, because they are an "unauthorised" reseller. Um, who sells the Dive Rite gear to LeisurePro in the first place? Doesn't it originate from Dive Rite??? As a consumer, I'd hate to see cheap online prices disappear, but aren't the manufacturers partly to blame for the demise of some LDS by continuing sales to such online resellers?

The scuba industry isn't the only industry that's had to adapt to the new economy, but they're sure having the hardest time with it. I'm not sure what the long term solution for LDS survival is. The only reason I visit an LDS is for airfills and courses. I can't justify spending $1500 on a drysuit there when I can buy it online for $800 (true example). Maybe they'll all end become "gas stations" literally - volume sales of tank fills for bread and butter, and a smaller inventory of the necessities for those people who can't wait as cream on top, while remaining a presence for instruction and travel services.

I think stores have to start charging more for gas fills too - I feel guilty sometimes because I spend 15 minutes in the shop only to hand over $4 or $5 for the fill. In northern California, nitrox is $10 a fill, and for the limited amount of diving I do compared to some people, that's going to be acceptable for me once I get nitrox certified, and I think it's a lot more realistic pricing.

Maybe certification agencies could introduce EAN32 (for example) as the basic gas we are taught open water on? Open water dives (usually <60 feet) become safer because of reduced DCS risk, and the LDS gets to sell a higher margin gas, increasing their viability.

:boom: