Dive Forecasting and Retailers

As many of you might know (and even participate), I have been conducting an across-the-board diving industry survey each quarter since 2005. This is sent to about 9,000 industry email addresses around the world. The survey and results are sent out free of charge, as an attempt to disseminate relevant factors and data we can all utilize to project, plan and measure our performances against the ‘whole’ so-to-speak. Each survey is broken down by business classifications, and I think I have most of the major groups covered.

As a result of looking at some trend data going back to early 2007, it is possible to track (dive retailers specifically) forecast ‘feelings’ to actual sales. For those of you unfamiliar with the survey, it asks a variety of questions about each company’s business performance, as well as a few forecasting questions for the future quarter.

After spending some time analyzing the data, here is what I found:

As you can see there is a definite trend between each quarter’s dive retail gross revenue forecast in sales and their actual revenues. The red arrows shows each time the retailer forecasts an increase in their business, we see an actual increase in the next quarters’ gross revenues.

These trends seem to point to a change in the 2nd quarter gross revenues for 2010. I just recently sent out the 1st Quarter 2010 Survey results, and this above data is not in that general report.

I have also spend some time trying to correlate the forecast trend with the actual trend in an attempt to establish a known ‘factor’ that can be applied to a forecast that would actually, and accurately forecast the next quarters revenues results. So far that formula has been out of reach.

I know this is also only a small corner of the industry as a whole, but a fascinating look into dive retailers in North America in how the ‘feel’ as opposed to how they report their revenues. Each quarters’ survey responses average between 105 to 200 retailers responding, meaning this data was drown from a pool of approximately 2,000 dive retailer responses over the last 14 quarters.

Dive Industry vs. US Population

According to the largest USA sports survey, SGMA's 2009 Scuba Diving Participation Study, the diving industry has lost over 25% of its participants in the last 8 years. This is not new news for the industry that has been seeking answers to a downturn that has been felt by everyone around the world, essentially since 2001.

However, one needs to look at external factors, rather than internal reasons for this drop. Part of the reason is the changing population landscape in the USA. According to various sources in the industry, the average age of our divers are between 36 and 40. That means that our 'average' diver was born in roughly 1974.

The diving industry experienced unprecedented growth starting from about 1985 to roughly 2000. Since then we have seen a drop in the growth rate within the industry, varying by sector. What needs to be considered is who was the customer in the late eighties and all though out the nineties? It would of been the divers who were born in the years 1948 to 1960 - give or take. This group as we all know is called the "Baby Boomers" due to the fact that in those years we have a huge birthrate in the USA. This group was and is still at the tail-end of our 'target demographic' for the activity, and illustrated below:

As shown, there were two times in the last 100 years that the birthrates bottomed-out. The first was in roughly 1934, the second coincidentally was in 1974. If our current customer was born in roughly 1974, then our target demographic is almost 50% less than those that were born in say 1950. The diving industry has become a victim of a population shift as a whole. However, the good news is that in spite of an almost 50% drop in birth rate for our target group, the diving industry has only dropped 25% in participation. This is proven by the numbers and chart below:

Again, as illustrated, SGMA calculates the percentage of the population that participates in the sport as compared to the whole US population. As an industry, we have only lost .5% participation over the last 8 years as a percentage of the US population.

So what does all this mean? Should we start marketing our sport to high school and college age? That's fine if we do not expect significant equipment sales or dive travel participation, as this group does not have the time or resources to participate. Do we go after the aging boomers and try to get them back? That's also difficult as health reasons begin to affect activity levels in seniors.

Which leaves us with the answer: maximize our target 35 to 55 year old market, and expand into boating, fishing, flying, golf and other high-dollar participant activities that also appeal to this demographic. Boating, flying and golf enthusiasts should be a primary target for marketing. The Scuba Tour, now the Be A Diver Tour, started as a result of the forward thinking marketers at The Bahamas tourist board that decided to put a pool at Oshkosh, WI airshow. It was one of the first times the industry reached out to cross-market to a similar demographic activity. The event was a huge success for the Bahamas - and resulted in many pilots diving and traveling to the Bahamas. The same should be done with the lucrative boating and fly/ocean fishing industries. These participants have the ability, time and disposable incomes to participate in diving.

Feel free to email me with questions or comments.

Data collected and reported by above sources complied by William Cline.