In its 2004 Recreational Boating Statistical Abstract, the National Marine Manufacturers Association reported that total expenditures on boating accessories have risen from $1.2 billion to $2.4 billion in the last eight years.
Boating Industry examined the accessories market in an article included in its September issue . Executives at several companies that manufacture accessories were contacted for the story, including Terry Carlson, president of Raymarine. Here is a transcript of that interview.
Boating Industry – How has business been?
Last year was an excellent year for Raymarine. I would say that our end of the business, which is defined by you guys as accessories, has really had a big lift. I think, in boating, there are a lot of things that are accessories. For one person it’s having a cocktail, for another it’s having a head onboard. I think one of the things that has changed in the last few years in boating is electronics. People, whether they have a new boat or an old boat, have an opportunity now to upgrade to color. There’s a lot more opportunities to put different things on boats that you couldn’t in the past. Radar is something that 20 years ago you just didn’t see in recreation. Now, the question is how small a boat can you get the radar on.
More people are adding autopilots, more people are adding what we launched about two years ago, which was high-definition fish imaging. So it’s a whole new technology in fish finding, it’s different than what the traditional analogue ones are. So not only do people want to have a VHF radio in their boat, there are reasons to add more things to their boat, like an autopilot, and there are reasons to upgrade what you currently have. So whether you’re an existing boat owner or a new boat owner there are a lot of things that make people want to get the latest and the greatest. So your boat may last 10 years, but you may put three different rounds of electronics on it during that period of time that you own it.
Boating Industry – Have you found that more people are looking to accessorize in the past, or do you think the multitude of new products sort of drives the interest that people have?
That’s certainly an interesting question, and there are a lot of theories around it. I think one thing that is fun about our business is that even when new boat sales aren’t taking off, we can still have a great year. I liken it to the days when I was back at Black and Decker, I spent 13 years there. A lot of times their stock would go up and down with the housing market. But in the reality of it, sometimes our business was better when new houses weren’t selling, because then people were fixing up old houses. And I think that’s true in boating, a lot of people, when they put things off are saying, “You know, I was thinking maybe I would buy a new boat this year, and I decided not to. But what I’ll go ahead and do is upgrade my electronics.”
We’re finding that maybe there is a greater interest in upgrading. We play on that, obviously, when we do advertising and new products. We want to generate excitement in the category. So not only do we bring new products to market, we’re trying to encourage people to upgrade what they have and aspire to get to that next level. So you buy the C-Series [navigation system], but later on, on that boat or your next boat, we want to move you to our new E-Series which we launched this year.
It’s a continual process of upgrading. We find that people often don’t upgrade their VHF radio because there hasn’t been as many reasons to do so, although we’re going to try and generate some reasons. But people often buy a VHF radio for their boat, and that's it until the boat dies or their radio dies.
Some of the research we did says people are upgrading their electronics every three or four years, which is interesting. Theoretically, a fiberglass boat may last 25 years, and if people, the Raymarine customers anyway, are upgrading their electronics every three to four years, that’s a really good sign, not just for Raymarine, but for the industry and the business, that it’s vibrant and people are excited about it.
There’s a lot of things that you can tell people are really interested in. Some things on your boat are just there. If you’ve got a handrail to hold onto, people don’t get excited obviously. But for electronics they do. We sent out a survey just asking people what they thought, and they gave us information. I think the response rate was over 25 percent, which is like absolutely unheard of, that people are that involved and wanting to give us feedback – what they like, what they don’t like, what they would like to see in the next product, in some ways brag about their boat.
People send us pictures of their boats and we post them on our Web site so other people can see what’s on their boats. It’s really a fun business, there’s a lot of things that aren’t quite as much fun. But boating is fun and we have a really exciting fun thing within that.
I think you’ll find that the same thing is true in automobiles and airplanes and other related industries. My wife always kids me now that I don’t go to the grocery store without plugging in the GPS, because the waypoint is in there and I just call it up and hit the destination. I find it fun and entertaining to have it in there, and I think boaters are the same way. They may go to the same place every time they go boating, but they still want to punch it up and see it on the screen and have their boat track across the screen, see how many minutes to go, etc., so it’s really a fun business.
Boating Industry – We had also heard that sort of the driving force behind the accessories market are electronics and that they are doing especially well. Have you seen that or would you agree with that?
I can only tell you what we report, since we’re public, that our business last year grew 25 percent, and that’s just a big growth in a single year for electronics. And a lot of it is just, it’s new, there are a lot of new things. It used to be you could barely see a screen on a boat unless you had your hat on, you had to pull off your sunglasses. If you remember, they used to put hoods and shades over the screens so you could see them, and we had these, what were called sunlight viewable high bright displays, and then you get on your friend's boat and go, “Holy cripe, I can read that standing at the back of the boat, I’ve got to have one of those.”
So the accessory business, and it’s not just electronics, but there’s other things. Think about five years ago, you didn’t see big overhead racks or wakeboards on boats. There are so many more fun things to accessorize your boat with and really personalize it, make it yours. It’s kind of like the Harley [Davidson] syndrome. You buy your base boat and then there are so many fun things you can do after you buy it. Our electronics business is just one of those.
Boating Industry – Do you find that your success has been throughout the product line? Is it from the cheapest to the most expensive items, or is it more in one area than the others?
Well, our core business is really the sailboater and the cruising and small sportfishing type market, and where we are headed is in both directions. We’re moving up-market, we launched the H-6 product line last year, we’ve been getting more sportfishing type boats, which we define as the 45-foot-and-over fishing boats, more like the Vikings and the Cabo’s. And at the same time we’ve been going into a lower price point market for us, which is still mid-to-high-price point in the market place, because we don’t sell $100 fish finders at Wal-Mart like a lot of companies do. But we’ve entered the $600 fish-finder market, which is still, in the $400 to $600 range, an expensive fish finder.
But it’s a different marke