Swimming in Sales Leads Even as states and

Swimming in Sales Leads § Even as states and businesses reopened from the pandemic, more homeowners realized their backyards were their first “entertainment alternative, ” which resulted in an unexpected improvement in pools, hot tubs and spas sales during May 2020. § A measure of this improvement was a 100% increase in home improvement loan applications from January 2020 through April 2020 at Lyon Financial, which specializes in these loans, and primarily for pools. § During the first half of May 2020, some dealers reported a significant surge in leads and Lyon Financial also received more loan applications for covered porches, outdoor kitchens, gazebos and similar backyard projects.

Dealers Were Happy with 2019 Results § New swimming pool construction increased steadily through Q 3 2019, with Metrostudy’s New Pool Index (NPI) at 52. 7 for Q 3 2019, a 1% increase from Q 2 and 6% YOY increase, although construction had been averaging an 8% increase during the past few years. § Aqua’s 2020 State of the Industry Builders Survey reported a huge majority (85%) of swimming pool builders thought the industry significantly improved during 2019 and only 12% were concerned about the future during early spring prior to the pandemic. § As with other building and remodeling sectors, 26% of swimming pool builders said they had to decline projects because of a labor shortage while another 48% said it was a challenging situation, although they had been able to complete 2019 projects.

A Hot Tub: Fewer Better Ways to Relax § Much like swimming pools, hot tub dealers in various regions of the US were reporting double-digit sales increases, but many had a limited inventory and were working many more hours, even with new hires. § Although many dealers experienced a pause when the pandemic’s effect was at its height, the rebound in spring 2020 sales were probably mirroring the same dealer optimism during 2019, as 58% reported a sales increase. § In its 2020 State of the Industry Hot Tub Report, Aqua asked dealers, for the first time, about their portable spa customers and dealers reported the largest age group (51%) were 45– 54 and 23% each for customers 35– 44 and 55– 64.

Too Many Dealers Shun E -Commerce Opportunity § For retailers in general, including pool, hot tub and spa dealers, the pandemic revealed how well they were prepared to move their businesses online and serve customers digitally. § According to Aqua’s 2020 State of the Industry Retail Report, only 28% of surveyed dealers said they had an e-commerce site during 2019 and 30% were working to create one, but 42% said they were not interested in selling online. § Equally disturbing in light of the pandemic’s effect was the 39% of surveyed dealers not interested in offering a buy-online-pickup -in-store (BOPIS) and/or a curbside pickup service, compared to 19% who did offer these services and 41% who were implementing them.

In-Depth Identification of Target Audiences § The table on page 3 of the Profiler features just adults 18– 24 and 25– 44 because they represented 76. 6% of all adults 18+ who were planning to install a pool, hot tub or spa during the next 12 months, although the pandemic may have changed some of those plans. § The Media Audit Winter 2020 survey for Cleveland, OH (December 2019–February 2020) found 74. 3% of adults 18– 44 were planning an installation during the next 12 months, and 87. 2% in the Norfolk, VA market survey (February–April 2020). § Americans who remained employed during the pandemic were the primary driver of the surprising increases in new home sales during spring 2020, which means they are also the prime audience for swimming pools, hot tubs and spas.

Scrambling for Labor During the Sales Surge § Although 45% of the contractors who responded to the survey for Aqua’s 2020 State of the Industry Service Report cited “Internet retail competition” as their most pressing concern, “finding good workers” was a close second at 41%. § The lack of good workers caused some contractors to limit their service calls during 2019; however, they may find a larger pool of new workers among the many people who were furloughed or unemployed due to the coronavirus pandemic. § A majority (76%) of contractors told Aqua for its service report that their 2019 revenues from service calls were either “excellent” (28%) or “pretty good” (48%).

Advertising Strategies § Although a very small percentage of Outdoor Living dealers run TV spots, now is the perfect time for them to use TV to strengthen their brand elevate their position among all competitors to achieve maximum sales after the pandemic. § In whatever advertising media Outdoor Living dealers promote themselves, those with BOPIS and/or curbside pickup service will want to promote it aggressively to differentiate themselves from the 39% who said they weren’t interested in offering these services. § Outdoor Living dealers may want to explore placing ads on major local realtors’ Websites and/or financial institutions’ that provide loans for these products, or forging a copromotional partnership to reach people considering the purchase of a home.

New Media Strategies § Just as many other local retailers/dealers discovered since the start of the pandemic an e-commerce site or presence is an absolute necessity, those Outdoor Living dealers who have that presence will find it beneficial to promote their sites aggressively. § As dealers experience an increase in new customers during Q 2 and Q 3 2020, consider incentivizing them to record a short testimonial video for posting on social media to show other consumers why a backyard oasis is a perfect summer staycation. § Ask social media visitors to nominate a local healthcare worker administering to COVID-19 patients in conjunction with a crowdfunding platform to collect donations to present the healthcare worker with a free hot tub or spa.