Your local dive shop sells six lines of products & services to divers. Providing scuba diving training courses and selling dive gear are the two most significant sources of revenues. We’ll look at how dive centers currently promote and deliver these two product types to divers. Then, we’ll propose a new structure to do it with the Octopus Strategy.
Let’s forget, for now, what you like, what you prefer, what is easier for you, what is more profitable for you – or what dive training agencies and scuba gear manufacturers want you to do. Instead, let’s look at what the consumer wants when shopping for scuba diving training and dive equipment.
It’s a broad question. We could draw a long list of what consumers want, including safety, fun, entertainment, convenience, a reasonable price, prestige, fish watching, challenges, etc. But for now, we will focus on what we believe are serious structural flaws in our current product distribution channels – flaws that could be fixed with the Octopus Strategy.
1. First Part of Our Dive Industry Octopus Strategy: Dive Training
When somebody decides to go scuba diving, he soon realizes that he needs a “card” that he will get after a course. Now what?
Where do consumers look for dive training?
Usually, clients who have never gone scuba diving, assume that all dive schools are safe, and a Training Agency X course is the same at all dive center. Of course, we know it’s not the case as we’ve discussed in the lack of consistency in the quality of the experience.
For now, let’s imagine these possible future clients looking for a scuba diving entry-level course. Where do they go? Usually, they go online, and they search for a place “near where they are.”
We say “near where they are” because it’s not necessarily near where they live. It may be near the hotel they are staying at in Bonaire – and often, inside the hotel. Of course, if you’re in Key West, all dive shops are near your hotel!
If they are looking at taking such a course in their home town, it may be near where they live. It may also be near where they work, if they want to do it after a day at the office, during weekdays.
How often do you see a diver, in an origin location (an urban area like Los Angeles, Nashville or Montreal) come to your dive shop from far away? It’s pretty rare.
Usually, your student-divers come from a limited driving distance to your dive shop. That’s why DEMA offers a service to define the socio-demographic profile of people living within a 15-minute (or 5 or 30-minute) drive from your dive shop.
Of course, it would be best to study the market around your location before opening your doors! It’s preferable to be located in a part of town where you’ll find a good percentage of people matching the socio-demographic profile of a scuba diver.
But for now, let’s note that people searching for scuba diving lessons, usually want a pool or dive site “near where they are.” The question, now, is: Can they find it?
How are we helping consumers find a dive training location?
Try doing the exercise yourself. If you are searching online for a place to take a scuba diving course, you will find places where you can buy dive gear. In today’s world, this is absurd.
On the training agencies websites and Google maps, you find addresses of local dive shops where you can buy gear. But where is the course taught? Training agencies only list dive centers on their website, which is a location where you can find the six businesses under one roof. They do not list the pool or dive site locations where the course is actually taught.
I’ve seen a ridiculous case in an urban area. On the West-end of town, there was a dive center using a pool in the East-end of the city to teach scuba diving courses. Imagine how many clients living near this dive shop were displeased when realizing they had to drive to the other end of town (about an hour drive) to take their courses. And it was even more frustrating after realizing that another dive center, located in mid-town, was teaching in a pool in the West-end.
Our question is this: Why aren’t pool locations listed for people searching for an entry-level scuba diving course?
It is more of a problem in urban areas (origin dive centers) than tourist destinations. In many tourist destinations, there’s a dive center within the resort, and there’s a pool on-site.
Even if you are vacationing on a small island like Key West, you will find addresses of dive stores on Duval Street. I could pick any of them. But they are probably teaching in the pool of one of the hotels and leaving for open water dives from the marina. What I would like to know is if there is a dive center teaching in the pool at the hotel where I am staying. Of course, I can call and ask. Or I can peruse the numerous dive shop websites to try to find the information. But in today’s world, don’t you think clients expect that kind of information to be readily available online (e.g., on Google Maps)?
And it goes beyond frustrating clients about the distance to travel to the actual teaching site. We are also missing out on marketing opportunities. For instance, I managed a dive center in an urban area where we were using five different pools all around town to teach entry-level courses. I had to jump through hula-hoops to get these locations listed on Google Maps – but it paid off. A lot! Meanwhile, on the training agency website, the only thing listed was my downtown dive center location where no courses were taught.
Think about it!
Why are we providing addresses where you can buy dive gear when somebody is looking for a place to learn scuba diving?
It doesn’t make sense. And it hurts both customer satisfaction and your marketing potential.
When you look online for driving lessons, do you get addresses of car dealers?
Before we get into the Octopus Strategy solution, let’s look at dive gear.
2. Second Part of Our Dive Industry Octopus Strategy: Scuba Gear
When people shop for dive gear, we believe their selection criteria is significantly different than when they shop for a place to learn to dive.
What do consumers expect when shopping for dive gear?
In today’s internet world, people regularly shop online before buying in your physical retail store. And when they buy something, they expect to get it today or tomorrow. Even “tomorrow” is becoming to be late. Amazon is pushing hard on same-day delivery. That’s the society we live in. Perhaps it is not socially sound – and too stressful – but it is what it is. We can’t ignore it.
These customers expectations and habits have a lot of consequences for your business. For instance, it means that…
Consumers expect the dive store to have all models, in all sizes and all colors, readily available, today or tomorrow.
How many dive shops have that kind of inventory in North America? Approximately zero.
Typically, the dive store stocks what the dive owner likes diving with. And the dive instructors are instructed to wear these hand-picked products to promote them. Well, that is not good enough nowadays.
You may be stocking only the black version of the wetsuit in the sizes most in demand (e.g., medium. large and XL). But the customer knows that it’s also available in purple and size Medium-Large-Tall. You can try to make that client swallow a black wetsuit that doesn’t fit properly, but that would be a very lousy experience. And it is not the way to get repeat customers and grow your business. What is more likely to happen is that the client will tell you that he will “think about it,” walk out, and order it online for delivery tomorrow.
So, in brief, to meet today’s consumer expectations, we need a large inventory with all brands, all models, all sizes, all colors – available today or tomorrow. Typical North American dive stores have revenues of about $500K, annually. It’s impossible for a store with such a low annual sale volume to keep that kind of inventory.
But there’s a good thing about scuba gear sales. How far could such a large-inventory store reach?
It is our experience that if you have a well-stocked reputable store, people will drive a fair distance to come shopping with you. After all, it’s a niche. There isn’t a dive store at every corner. And consumers don’t buy dive gear every month. Therefore, they don’t mind driving farther for dive gear than they do for their entry-level dive course. And this is part of the Octopus Strategy foundation.
How do we currently sell dive gear?
Well, we try to sell it the same way we were before the internet showed up.
Training agencies and dive gear manufacturers are still insisting that the local dive shop must remain the main link in the chain to reach divers – even if the dive stores have anything in stock barely, do not satisfy today’s consumers’ expectations, and have no quality assurance process. Why are we insisting on using a model that does not suit today’s world?
There are a few eCommerce dive retailers with a good inventory and a well-maintained website. But they are the exception. They are also seen as the black sheep of the dive industry. And they are mostly disconnected from dive courses being taught around the country.
Certainly, in 2019, we can do better – for our profitability and customer satisfaction. And this is where the Octopus Strategy comes in.
3. How can we satisfy these two different sets of criteria?
Selling dive gear requires a setup much different than selling and providing dive courses. The scuba gear store can cover a much wider territory than the dive school. This brings us to the conclusion that these two departments shouldn’t be under the same roof.
Let’s have a look at what it looks like. We have various pool locations, each one serving a relatively small area. Then, we have a retail store selling gear to consumers in a much larger area.
Each teaching location feed clients to the retail store. And the centralized dive store sends customers to the local teaching locations. Such a setup means that instructors who are passionate about teaching and diving can focus on that, without having to improvise the management of a retail store and eCommerce website. And the larger dive store can afford a professional retail & eCommerce manager. We can have people do what they are good at, and leave the rest to people who are good at the rest.
This is how an Octopus Structure looks like on our whiteboard:
Source: Business of Diving Institute
The green arrows represent gear sales sent to the centralized and well-stocked dive store by instructors in numerous teaching sites. The blue arrows represent support provided to these small teaching locations by the centralized one. For instance, the central location could manage the eCommerce website with a booking system for each of the teaching teams.
So the Octopus Strategy is an easy concept. But how can we implement it? That’s the big question.
4. How Can We Implement The Octopus Strategy?
For the Octopus Strategy to bring value to consumers, we need pool locations listed online when potential clients search for an entry-level scuba diving course. This would require training agencies to change their website listing policy. We will probably not see this happening until a smaller training agency starts innovating.
Then, of course, we need these teaching locations listed on Google Maps. This is not easy, but it’s do-able. I’ve done it, and it brought us many new clients living near these pool locations.
The Octopus Strategy requires a smaller or new dive training agency ready to innovate.
It leaves us with dive gear. How can we have a profitable retail store stocking all brands, all models, all colors, and all sizes? For this to work, financially, this retail store needs to serve a significantly larger market than typical local dive shops are currently covering. It needs to be the head of an octopus with many arms!
Otherwise, this retail store needs to have a professional eCommerce branch. This will help boost the volume to justify a more extensive inventory.
In fact, with the internet nowadays, we could imagine the octopus to extend much beyond a geographic region. With UPS, FedEx and the Postal Services, you can provide dive gear to an instructor and his students in Omaha, Nebraska, even if you are located in Miami, Florida.
5. What’s next?
The Octopus Strategy is about increasing value and convenience to client-divers while improving our efficiency. We’ll complete this discussion when looking at a complete overall of the local dive shop.
Otherwise, we believe the octopus strategy should be part of a larger game plan to draw and implement a Blue Ocean strategy. The company implementing it should include ownership of a training agency (with a substantial revision on how we teach scuba), in-house gear brand, retail, and eCommerce. It would also provide a base on which we could build consistency in the quality of dive experience under a reliable brand.
If you want to invest in such a project, let us know!