West Marine Testing Scuba Shops in Stores

West Marine has quietly teamed up with Mares and SSI to test market a new scuba shop-within-a-shop concept. If successful, scuba shops will be be embedded into larger West Marine stores around the US. Currently, the test market scuba departments are in two West Marine stores: Jacksonville and North Palm Beach Florida. A Fort Lauderdale store will be added to test in the spring of 2015. Starting in October 2014 West Marine will launch an online promotion for their customers to go to SSI’s website and take a free online class. When completed, the students will be directed to finish the class at one of the two West Marine scuba stores or if living in the other 99% of the country, sign up with their local SSI dive center.

West Marine is the largest specialty retailer of boating supplies and accessories, with over 285 stores located in 38 states, Puerto Rico and Canada. The company now carries more than 75,000 products, ranging from the rope that started it all, to the latest in marine electronics, technical apparel, footwear and accessories. In addition to its retail stores and Port Supply wholesale divisions, the company serves water lovers in more than 150 countries worldwide through its mail order and Internet divisions.

How the ripples of that large rock being dropped into the relatively small pond of the scuba market affects you depends on your connection with the dive business (e.g. diver, shop owner, SSI shop owner, trainer, manufacturer). Although the default emotion of small dive shop owners may be fear, we predicate a tsunami of discussion on this topic at all levels. This move by West Marine/Mares is what former Intel CEO, Andy Grove would call a “Strategic Inflection Point.” He said, “A strategic inflection point is a time in the life of business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end” Most local dive shops have weathered the previous strategic inflection point – internet sales – in great part because they provide services that cannot be offered online.

Whether or not this is “good for the dive industry” seems to be everyone’s first question. Not surprisingly Chistina Kochevar, the category manager for West Marine, gives a passionate yes. It was clear during our interview she is not just spouting the PR line. She is a diver and heartily believes West Marine will be helping to inspire and grow more divers who will then visit other dive shops as they get deeper into diving. As evidence of this commitment, the initial campaign (above) could be an early Christmas gift from West Marine to SSI dive centers.

Kochevar also points out how entry level scuba is natural for West Marine. She says “we own the water. Like with low end kayaks and now SUPs (stand up paddle boards) we are perfectly positioned to target customers who may have never seriously considered scuba. We will not be everywhere and will not be able to offer the range of products, brands and expertise of the local dive shop. We are just doing Mares… at least for the next three years.”

Both Kochevar and Jon Wilkins, the US Product and Sales Manager at HEAD (parent of Mares and SSI) were adamant that, like other nascent ventures, it is way too early for them know how this will play out. They would prefer we wait and see before we publish. But we feel a preview would spark valuable discussion.

If the test market succeeds, West Marine is planning on rolling out the stores-within-stores only to West Marines’ larger stores with the appropriate resources in the area. Kochevar says they are committed to having a diver on duty during “most of the time” the stores with the scuba shops are open, and a Dive Pro as the department head. They will have air fills on site. While they’ve already started sending staff to Mares regulator servicing clinics they realize that for safety reasons they will likely have to contract out regulator service to centers with more experienced personnel.

Training is another story. SSI (Scuba Schools International), a recent acquisition of Head Sports (parent of Mares), was built on a philosophy of supporting the local dive shop. SSI dive pros are required be associated with a local dive shop (or resort) and the SSI dive pro curriculum is heavy with tips on selling while training. But West Marine is not setup to train divers. Kochevar said they are planning on working with a new vendor in Florida, Guardian Scuba, to provide training.

Followers of ScubaBoard may have noticed a recent classified ad looking for dive instructors for Guardian Scuba. Our research quickly revealed that company is brand new and has “under development” on their website. Via public records we discovered the registered agent was the same one Jon Wilkins mentioned above as the US Product and Sales Manager at HEAD. On contacting Wilkes we asked the most obvious question: Could this be an infinite loop back to Head/Mares providing training directly? Wilkins assured us it was not as it seems at this early stage. Because his role is to manage all the components between Mares, SSI and West Marine, he helped setup Guardian Scuba but it will be a separate entity having nothing to do with Head/Mares. Guardian will be associated with West Marine which makes the model no different than with current dive shops. He again reminded us the project was developing and all would be more clear in the coming months.

Scuba diving has never been broadly and significantly marketed in the US. Wilkes, like Kochevar was passionate to point out he felt this move will be great for the dive industry. He said West Marine has the potential of reaching over 5 million water-oriented customers and this move should give business back to all scuba retailers.

What me worry?

The question for the local dive shop is: Will West Marine entry bring new divers into the industry and be a tide that raises all boats, or will West Marine be a lion fish in the waters of the local dive shop? One LDS (local dive shop) owner expressed the common fear position with this challenge: “Show me any case where a major chain came into an area, and the local shops in that business grew and profited.” Many of us remember when we saw local and independent hardware, butcher shops and record stores on any main street. But now it is Wallmart, Home Depot and Safeway.

In fact, dive shops are one of the few small independent businesses that are still around. They have taken a hit from online sales but most are still surviving. This is because of the unique nature of the dive business and the scuba market. On the market side we see major retail chains have not seen SCUBA as being capable of generating significant returns. Also the LDS provides three services that cannot be offered online and which are difficult for major chains provide. These services are air fills, training and regulator service. Additionally, the chain will need to provide some staff that are certified divers and this adds a heavy burden to hiring and scheduling.

We posed the question of “should the dive shop owner be worried or hopeful” to Mike Mazzeo, Associate Professor of Management and Strategy at Northwestern University’s Kellogg School of Management and co-author of a fascinating new book Roadside MBA: Backroad Lessons for Entrepreneurs, Executives and Small Business OwnersMazzeo’s first impression was positive. He offered Starbucks as one prototypical example. When Starbucks moves into an area, other independent coffee shops tend to do quite well. But on further reflection he was more pessimistic toward the idea that scuba shops could just sit around and wait for the rising tide. He offered that the marketing power of West Marine is one silver lining and should actually help, but forward thinking dive shop owners’ best chances are to embrace this strategic inflection point and be prepared to “change or die.” In more proactive terms, small shop owners who succeed in these cases are those who can work together with other small shop owners, and those who focus on offering the unique services that big chains cannot.

We also discussed another not so obvious side effect. I asked Mazzeo if he thought scuba manufacturers may find it much easier to work with a few large chains and decide to drop support for small and independent local dive shops.  He said it is possible, but not likely because manufacturers take on risks and lose leverage if they limit their focus to servicing a few large chains.

A loose correlation to the West Marine venture can be found in the western US where Sports Chalet has 51 stores and carries scuba gear and services among its wide range of sporting goods. We interviewed a range of dive shop owners and staff with shops near Sports Chalet’s stores. To our surprise, all but one of those interviewed thought the Sports Chalet proved to be any significant competition for local scuba shops. A few said they regularly get customers from Sports Chalet.

Sports Chalet may be making some big changes soon as they were recently purchased by Vestis Retail Group which also holds Bob’s Stores (Bob’s) and Eastern Mountain Sports (EMS). Sport Chalet was reportedly in deep debt at the time of purchase and one former employee told ScubaGadget the Sports Chalet scuba cost center was never profitable.

One long-time scuba industry maven told ScubaGadget he “saw only upsides to the West Marine venture.” He was excited this would be the first time we would have a national presence for our sport. He postulated West Marine could bring many thousands of new divers into the sport and those divers are going to visit local dive shops.

Everyone agrees the scuba market needs a Sea Hunt level boost. We also know disruptive changes in any market always spark intense creativity. There will be those who fear the coming change but we hear more hope than concern from those deeply experienced in the scuba market.

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