The LDS of the future

[Peter Guy]

The successful dive shop of the future will look a lot like the successful dive shop of today -- that is, it will be one that caters to its customers. In my very humble opinion, the problem with most dive LDSs is that they have no idea WHO is their customer base and no idea how to SERVICE their customer base.

Over the last few weeks I've had the opportunity to shop in 4 different bricks and mortar dive shops -- 2 of which appear to be successful, 2 of which do not appear to be successful. None of them, as far as I know, have any significant online presence.

The first one, Sports Chalet, is NOT an "LDS" in the typical form, but it is an LDS and, by reports, is the #1 PADI customer in terms of number of certs per year. Perhaps that is a model that other independent LDSs could try to imitate -- for example, merging with (at least physically) a "Sports Authority" type store.

The second one, (since the rest are local to me, I won't ID them) is a typical stand alone LDS -- but, at least at Christmas time, it was clear the management had attempted to highlight items management thought would be attractive to its customer base. There were "Holiday Sales" signs here and there and an attempt had been made to actually promote sales.

The other two are "typical LDSs" and appear to be lagging. Perhaps not surprisingly, neither of them pays very much attention to marketing and staying involved with its existing customer base nor is there much attempt to attract new customers and expanding their market. Is it any wonder they are dying?

What would I do if I had an LDS? I would try a several pronged approach:

a. Expand my existing market to include, at the very least: local schools (work with the schools to offer scuba as a PE class for credit) and "specialty travel" to include, in particular, brides (set up a program to teach brides and grooms scuba as part of their honeymoon); warm water cruises (set up a program aimed at teaching people scuba prior to leaving on the cruise)

b. Focus on my existing market: have an active customer followup program; offer and promote seminars/workshops to my existing customer base; encourage them to come to the pool and blow bubbles (especially when I already have the pool open so that the marginal cost is zip); REALLY focus on customer service, especially in those areas where I have an advantage over the online store, for example, on maintenance and service; and last, but not least, do what I could to make being in my store a positive experience if only by doing such simple things as offering them a cup of coffee or a cookie.

Nothing magic here.

BTW, it is my experience that online shops have plenty of overhead -- just different. You might be surprised at how much it costs to keep those servers up and running -- oh, and they probably have a lot more inventory than the LDS.

 

[Rich Keller]

I did not intend to suggest that a LDS start and run a dive club but rather treat their customers as if they were part of a dive club. Provide more opportunities for local shallow water diving geared towards the newer diver. Do not just sell them the gear but get them out more often and using it and build your own local community of divers. For example on Long Island there is very little shore access and the dive charters all run off the south shore to the deeper wrecks. None of this helps the newer diver get more involved in the sport. A smart LDS would have a trailerable 6 pack boat that they could put in anywhere along the north or south shores and offer shallow dives to build a divers experience level at the same time the LDS is cementing his customer base going forward.

 

[Peter Guy]

A smart LDS would have a trailerable 6 pack boat that they could put in anywhere along the north or south shores and offer shallow dives to build a divers experience level at the same time the LDS is cementing his customer base going forward.

Can't agree here -- but what I can agree with is that the "Smart LDS" will have a strong relationship with someone who has a 6-pack (or several someones who have 6-packs).

A funny comment from one of the local owners the other day -- something like -- "I buy/sell a lot of gear to other shops" -- which is as it should be. Several people have made the comment that the successful online stores get discounts for large purchases -- which is probably true. Well, why haven't smaller shops gottent together to form their own co-op for buying? The answer is probably two fold -- one, they often don't "play and work well with others" so they don't want to do this; and two, there are probably some manufacturers who have placed geographic limits which would make this difficult.

This isn't a new idea, independent grocery stores, for example, have been doing this for years. Just another idea that seems like it could work.

 

[RonFrank]

I have been watching this for a while, and the dive shops of the future are here now. The landscape changed when the internet entered the game. Online has been around for a while now. So what do we see?

Shops like ST have been doing well. Shops like A1 Scuba (local Denver retail) have been doing well. Many shops have closed their doors. These have not been small start ups, but shops that have been in business for over a decade. What do the successful shops have in common? The main thing I see is hitting on every cylinder.

A1 does travel, scuba trips are only a small part. They do travel for non-divers, offers specials, and cater to any travel needs. They have a large training facility. I don't see training as a loss leader at $500 a pop for OW but maybe. I bet they average $800 per new diver in equipment sales, and likely sell entire dive packages ($1500+) to a lot of new students. They have a big retail area, and they carry a good selection of gear from many manufactures. They have an online shop, not sure how well its doing but maybe it is doing very well. I do see people buying expensive items like drysuits and computers often locally. They have a competent service department and can service most brands. Their service is expensive but a lot of customers have their gear serviced annually after there annual vacation! They are partnered with the aquarium and those packages are outrageous at $200 for a half hour dive. They seem to do well as I see many divers at the aquarium. They are doing solid business on all fronts, and appear to be in good shape.

In my opinion this model has been working for decades and works today as well with all the changes the internet has introduced. They have adapted which is what successful and lucky businesses do. Keep in mind there is always the element of luck. Lets face it scuba is a luxury, and if things get bad enough ever smart business can fail.

 

[fdog]

James, I am wondering what leads you to say that--it is a real question, not a challenge.

I used Fill Express a whole lot last year under its old management. I intend to use them again a lot in about a month under their new management. (That new management sprang the news about the purchase while we were passing time during a deco stop, but I have not been in the area since he took over.) I see from the web site that he has made a lot of changes, but I am curious to read your explanation of what he is doing that makes it the LDS of the future.

Their "product" is service. Stuff like air fills and classes and repairs - all service items - stuff that's not easy to get over the internet. And priced so they are profit centers in themselves, not loss leaders to get people into the door to make big-ticket product purchases.

The internet has leveled the playing field in regards to hard product. At least from what I saw, Fill Express was building a business around the things you couldn't get easily off the internet.

...that's the future, I think. Air fills that pay for expenses like electricity and filters and maintenance, plus a bit for profit. The same for classes. Service - the thing that's hard to get from the internet.



All the best, James

 

[boulderjohn]

What works for an LDS in one place will fail in another. The L in LDS is local, and you have to aim at the local market place. In South Florida, thousands of divers dive locally all year round, and a large percentage have their own tanks. It makes a hole lot of sense for a LDS to make tank fills an important part of their marketing plan. Here in Colorado, where the hand full of diveable (barely) locations are available about half the year, only a tiny percentage of divers dive locally, and very few of them own their own tanks. I would guess that at least 95% of all tanks filled in Colorado are intended for the use of OW students and instructors, mostly in pools. A Colorado LDS has to look at tank fills and the ownership of a compressor as nothing more than necessary overhead expenses.

 

[Rec2Tek]

The option to get tanks filled at places other then a LDS already exists. PHMSA - Cylinders - Authorized DOT Cylinder Retesters: Domestic Once you start to see a bigger decline in LDSs others will come along to fill that need like charter boat operators. The charter operator will not be doing this to help the industry as much as he will do it to help himself to better compete with boats who do not provide the same service.

Rich these places on the list typically do not fill tanks they test them. they will not provide nitrox or trimix fills either.

 

[boulderjohn]

Service - the thing that's hard to get from the internet.

My previous post was written before I saw the one to which I am replying here.

I agree. That's what I was trying to say in an earlier post. You have to provide service that is aimed at the needs of your local clientele, and I think that is here some out of the box thinking is required. Just because it is a service that you have not offered before does not mean that it will not help you to offer it.

 

[Rich Keller]

Can't agree here -- but what I can agree with is that the "Smart LDS" will have a strong relationship with someone who has a 6-pack (or several someones who have 6-packs).

A funny comment from one of the local owners the other day -- something like -- "I buy/sell a lot of gear to other shops" -- which is as it should be. Several people have made the comment that the successful online stores get discounts for large purchases -- which is probably true. Well, why haven't smaller shops gottent together to form their own co-op for buying? The answer is probably two fold -- one, they often don't "play and work well with others" so they don't want to do this; and two, there are probably some manufacturers who have placed geographic limits which would make this difficult.

This isn't a new idea, independent grocery stores, for example, have been doing this for years. Just another idea that seems like it could work.

The idea of the dive shop running its own 6 pack was to get the LDS owners arms around their customer during their development in the sport. Sending them to someone else will help keep them involved longer but will not build loyalty with the diver to the LDS. If you use this method or something like it to build a community of local divers who all know each other and dive together on a regular basis along with the LDS how likely is it that on one of these trips someone from that group will show up with a couple of grand worth of new equipment that did not come from that shop? The idea of a buying group has worked very well in the food industry for decades and should work in the diving industry if you can get the LDSs to work together.

 

[Rich Keller]

Rich these places on the list typically do not fill tanks they test them. they will not provide nitrox or trimix fills either.

I have used many of these locations over the decades when working in remote areas that do not have dive shops and any of the ones that do deal with scuba tanks can also do fills and VIPs. These locations are also the ones doing all the work for local fire departments so more of them then you would think are capable of filling tanks in places that there are no shops within 100 miles. Even in areas that you would not consider remote like the eastern shore of Maryland where there are no dive shops until you get as far north as Dover you can get fills at these locations. You are correct in that I do not know of any of these locations that do nitrox or trimix but if the industry changes enough that there is a demand they would be easily capable of doing so. In the case of nitrox any diver who knows enough about mixing gas and can cross fill a nitrox tank from an O2 tank can get a nitrox fill out of a shop that does not do nitrox fills.