The pool and spa industry after COVID-19

by Dave Flaherty | June 10, 2020 10:28 am

By Steve Leslie

The world has become overwhelmed by the devastating coronavirus known as COVID-19, the stock market has crashed, and interest rates are at an all time low. Many people have been panic buying and hoarding essential items such as food and hand sanitizer. Further, everyone has been glued to their TVs watching the news for hourly updates. It sounds grim. It sounds hopeless. It sounds like some farfetched nightmare but no, this is very real.

In times like these, it is often believed there are two ways people can view these situations:

1) Observing all the information, only concentrating on the negative aspects, and coming to the conclusion that all hope is lost as the world is at a standstill.

2) Taking all of the information into consideration before realizing this will be the greatest opportunity to ever happen in their lifetime!

Before one dismisses the second method of thinking, it is important to consider the following: During the global financial crisis in 2008, when economies collapsed, did the pool and spa industry crumble along with it? Although many people lost a lot of money, the industry survived. In fact, some people thrived due to other people’s contraction in the marketplace. This is why it is essential that instead of panicking, companies must become creative and obsessed with expanding into the marketplace.

What the world economies are experiencing right now is not the result of a global pandemic, but rather something much bigger. For instance, back on September 16, 2019, the credit market froze for one day, but only those who really pay attention to the markets seemed to realize this. That is because the stock market is just one place that showcases the world economy. The credit market (or repo market) is even bigger. Here, “piles of cash and pools of securities meet, resulting in more than $3 trillion being financed each day.”[1]

At this time, when the credit market froze for a day, the U.S. Federal Reserve (or Fed) started pumping money into the system. This was not just a few thousand dollars… this was billions every single day—$75 billion to be exact. Further, this plan was supposed to be in place for four days, but then was extended by the New York Federal Reserve Bank at an increased rate of $100 billion per day for approximately another three weeks. However, when these three weeks were up, the deadline was pushed back to November, and then January, and so on.

The reason the U.S. did not report the Fed doing this (until recently) was because only after it had reached a large enough amount per day in quantitative easing did this become a big enough concern to need the approval of Congress ($700 billion per day)[2]. Otherwise, they have the ability to initiate quantitative easing as they see fit, as long as they follow best practices[3]. On top of this, toward the end of February—right before the coronavirus had really become a hot topic in North America—it was expected China was going to announce a decline in its economic growth, which was different than what was originally speculated in January, which would then impact global markets. This came after reporting losses the previous quarter as well. Associate professor of political science, Michael Beckley, reported in a Foreign Affairs article in October 2019: “To accumulate wealth, a country needs to increase its productivity—a measure that has actually dropped in China over the last decade. Practically all of China’s gross domestic product (GDP) growth has resulted in the government’s pumping capital into the economy. Subtract government stimulus spending, some economists argue, and China’s economy may not be growing at all[4] Once the last week in February arrived, and China was set to announce a loss, that is when the stock market started dropping[5]. That said, those expecting a quick economic recovery once the COVID-19 global pandemic is under control may be in for a rude awakening.

Where is the opportunity?

Looking at the current national and global situation, one can conclude that end-consumers are emotional and scared for their health, families, and finances. That said, for many, it is the term ‘staycation’ that sounds more appealing now than ever before, and this presents good news for the pool and spa industry.

In fact, the travel industry has been hit hard by the pandemic and, when some normalcy returns, many families are going to look for ways to justify staying home—and what better way to do so than by having a relaxing oasis in their backyard? These families will not have to worry about any possible backlash of COVID-19. They can spend more time as a family together creating memories, and if something like this ever happens again, they will actually look forward to some extra vacation time while knowing their family is safe.

With the economic disaster that is taking place (which started before the COVID-19 pandemic) it is safe to say many people have lost a lot of money and are worried about how they will move forward. The good news is interest rates are at an all time low, and there is a strong possibility that, in the near future, negative interest rates will become a reality in North America. The purpose of negative interest rates[6] is to incentivize people to spend their money rather than save it. People taking on loans and borrowing money will be credited interest, where as people who continue to operate with a savings account will be penalized for having money in the bank. Therefore, it makes more sense for consumers to invest in bigger ticket purchases such as putting a pool and/or spa in their backyard.

This would solve the issue of filling the travel void and also give them a chance to spend their own money, rather than a bank just taking it from them. This is where the opportunity is found, because some who are reading this paragraph may be thinking, “but nobody will have money to spend!” This is false. There may be more people with less money as a result of the global recession but rest assured, there are still people out there with more than enough to spend and before they lose it to the banks, pool and spa companies could come to the rescue and give them something worth investing in.

Finally, how can pool and spa companies expand in their marketplace when for much of the spring (at the time of writing) no one could enter a store as the whole country was slowly coming out of lock down?

This is a simple answer. Companies know most of their customers and prospects are at home self-isolating. Therefore, it is now time to adapt and adjust. Most sales representatives may prefer “face-to-face” methods, which ultimately may still be the best way to sell pools and spas, but not during these circumstances. That said, sales teams can overcome these obstacles by using social media. People are spending more time on social media throughout this crisis than ever before. Today, thanks to smartphones, it is easier than ever before to connect with new prospects. However, what this author has come to realize over the past few years is that a large portion of pool and spa companies recognize they should be using social media but, in some cases, do not know how to use these powerful tools.

Becoming a social butterfly

With that in mind, the first thing a pool and spa company needs to do is to educate their sales team on how to connect with customers and prospects on social media. How does one build a brand? How does one reach the marketplace using these tools? How does one use influence to reach more prospects? These are the questions that need to be answered. The most profound piece of advice is people do not follow companies, they follow people.

That said, one of the most basic ways for a company to build trust with potential customers is to focus on building their own personal brand. Having a face behind the name allows others to connect with the person (or people) who make up a company. Sure, there may be different platforms that can be used which can seem overwhelming, but ultimately the content people post is just an extension of who they are. This is what attracts people to follow or ‘friend’ others—like when two people realize they cheer for the same sports team.

Through the power of social media, a company’s sales team will be able to connect with a wider range of people, be able to narrow in on specific prospects targeted in their marketplace, and be an exceptional way for pool and spa companies to really build their brand—especially when their competitors are not taking advantage of social media.

By looking for ways to compete where others cannot, or will not, this is the ambitious edge that will separate companies moving forward. People buy from those they know, like, and trust, and if a company can take advantage of free tools that will connect them directly with their prospects, they will have a competitive advantage by having the opportunity to stay top of mind with their marketplace every single day—even during self-isolation.

Lastly, if a company or sales person is looking for a way to kick off a new social media campaign this author suggests the use of empathy. As restrictions on businesses and retailers slowly get lifted, it is unknown what limitations consumers will have when it comes to going inside stores, which in turn affects a company’s ability to entice people with promotions. However, what will pay off tenfold is being a caring human being during a time of crisis. Teams should come together with a plan to give back to their community by volunteering to help those who need support (e.g. providing groceries or supplies to the elderly or infirm, donating blood (or money) to foundations that resonate with what a company believes in). These are great ways companies and people within the pool and spa industry can support their local communities while documenting their initiatives through social media to inspire others also help. People are drawn to ideas bigger than them; therefore, if a company really wants to expand into its marketplace, the most basic place to start is by giving back.

Expand one’s horizons

Throughout history, what every single market contraction—or recession—has taught the world is the market follows trends; after contraction, comes expansion, and vice versa. Although companies may have to work harder to find the right prospects, the opportunities are there for the taking. That said, during times like these, business owners must keep their composure and realize now is the time to expand while many competitors contract. It is a pivotal time in history, and this author wishes every one stays safe, healthy, and help others out in any way they can.

Steve Leslie is the customer service manager at Highbury Pools, a manufacturer and distributor of pool products, including steel walls, equipment, and vinyl liners, based in London, Ont. He has five years experience in the pool industry, is a cross-border real estate investor, has worked for the Canadian Department of National Defence, and is also a social media expert. He can be reached via email at steve@highburypools.com.

 

 

 

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