How to Help Consumers Take the Plunge:
Hot Tub Market Example
Traveling opens my imagination to consumer behaviors. Every new place I visit, I see through the eyes of brands making their way in particular markets. My newest growth strategy marketing example is inspired by a visit to Utah.
The 4th floor of the Grand America hotel in Salt Lake City is home to one of the nicest indoor hot tub and pool complexes that I’ve ever experienced. It boasts a spacious hot tub that will comfortably seat at least eight, housed within a serene spa environment with chaise lounges, relaxation pods and more. Unlike many other indoor pool environments, the air is just right, not overly humid. Perhaps this is due to Salt Lake’s famously dry air. After discovering the Grand America’s hot tub, I made a point of visiting it two times a day and was sad to leave it behind.
This hot tub experience was so good that it made me wonder, should I get a hot tub? What are the barriers that prevent consumers from purchasing one, and are those barriers also dampening the market for hot tubs? For a big-ticket item like a hot tub, brands need a growth strategy marketing plan to address significant barriers.
Growth Strategy Marketing for Big-Ticket Items:
Truly Understand Consumer Usage Occasions
Hot tub behaviors are generally limited. One usage occasion is on vacation. When on vacation, I will typically try out the outdoor hot tubs, most recently at the Marriott Vacation Club in Marbella, Spain or earlier this year at a rental in Deer Valley, Utah. For the family friends that we go on ski vacations with, the presence of an outdoor hot tub is a deciding factor in selecting a vacation rental. After completing the Apple Cider Century in September, my daughter, husband and I rested our sore muscles in a vacation rental hot tub. From these examples, we can see that sometimes the hot tub is a deciding factor in a vacation rental choice, and for a vacation rental owner installing a hot tub can be a good investment.
Another usage occasion is more every day after working out. On a regular basis, while I’m at home in the Los Angeles area, my hot tub access is through the fitness club where I exercise one to two times per week. The fitness club has two indoor hot tubs, one in the men’s locker room and the other in the women’s.
It turns out that despite the limited occasions, for me, the hot tub can be a motivator, as visiting the hot tub helped motivate me to move. In 2018, when I was living in Santa Monica, I learned that the Bay Club El Segundo had a hot tub, and this spurred me to make the 30 to 50-minute drive from Santa Monica to try it. After taking a soak in the hot tub (which wasn’t the outdoor, mixed-gender experience that I was hoping for), my husband and I went to dinner in El Segundo and were taken with the small-town feel, walkability, easy parking, and of course, the nearby hot tub at the Bay Club. Within a few months, we moved from Santa Monica to El Segundo.
On occasion, less than once per year, my husband and I also visit the Bay Club Redondo Beach, which has an outdoor hot tub overlooking the ocean for more of the complete outdoor hot tub experience with a view of the ocean. This club is much less convenient, as it is about a 30-minute drive from El Segundo.
Growth Strategy Marketing for Big-Ticket Items:
Barriers to Hot Tub Ownership
Growth strategy marketing for big-ticket brands will be most successful if campaigns help consumers surmount barriers to buying. There are four barriers that spring to mind that deter me from becoming a hot tub owner. They are cost, infrequent use, environmental considerations and convenience concerns.
|Purchase Barrier||Growth Strategy Marketing Considerations|
|Cost||According to Hot Spring, purchasing a luxury hot tub like the Hot Spring Grandee will cost $13,000+, and installation will run around $318 in a uncomplicated situation. On the other end of the price spectrum, Sam’s Club offers a seven-person spa for around $4,000. With any options, maintenance will run $500 to $1,200 per year. I’m certain these costs are higher in Southern California. This hot tub cost competes with other home improvement projects, most notably the master bathroom renovation. The reality is that the hot tub will use funds that could be used for the master bathroom, and that the master bathroom is more important to the home’s value. Real estate experts concur that above ground hot tubs rarely add to the property value, while in ground hot tubs may add some value. Similarly, my colleague who is a triathlete, mentioned that she got good use of her hot tub in New Jersey, even though her husband was not a big fan. She doesn’t own a hot tub today, having moved recently to Monterrey, California, and while the hot tub is on the list, there are many items ahead of it. For big-ticket items like a hot tub, price is likely the most important factor to address in growth strategy marketing.|
|Infrequent Use||This is a big concern, as I have a good friend in Santa Monica who has an outdoor hot tub that is used less than once a month. As we’ve seen, my pattern of use is infrequent when not on vacation. To get the benefit of owning the hot tub, taking a soak would need to fit into a regular lifestyle habit. In my case, that’s weekend cycling, and I can imagine coming back from the ride, showering, and jumping into the hot tub for a relaxing finish to working out. Another opportunity might be after going for a longer walk with my husband. While the notion of having friends over to soak in the tub is appealing, realistically we can only do this a few times a month with our current work schedules.|
|Environmental Considerations||Because I live in California, the first thing that comes to mind is water use. It turns out that there are several other potential issues, including landfill of the plastic liner, energy required to heat the tub and keep it warm (though theoretically less in Southern California than a cold climate, and partially offset with a cover), and more.|
|Convenience Concerns||I’ve always shied away from owning a swimming pool because of concerns about maintaining it properly. And, some sources say that maintaining a hot tub is more work than a swimming pool. This is a huge drawback for me. Looking at the hot tub market growth, or lack thereof, it looks like these barriers are obstacles for many consumers. And the opportunity for brands to develop compelling growth strategy marketing campaigns are high.|
Looking at the hot tub market growth, or lack thereof, it looks like these barriers are obstacles for many consumers. And the opportunity for brands to develop compelling growth strategy marketing campaigns are high.
Growth Strategy Marketing:
Hot Tub Market Boosted by COVID, Has Since Flattened
During the pandemic, hot tub retailers reported a surge in demand, with back logs (defined as the average time in weeks it takes from hot tub order to delivery) going from 5.9 weeks in 2019 (prior to the pandemic), to 26.4 weeks in 2020 and 37.1 weeks in 2021.
Like the furniture industry that also posted COVID backlogs, the hot tub industry experienced COVID supply chain challenges. Today, however, furniture industry sales are down, as post-COVID consumers focus more on other spending priorities, e.g., travel and entertainment. The same dynamic applies to hot tubs, and presents a challenge for growth strategy marketing.
In fact, one source reports the hot tub market as declining 1.9% in 2022, with worldwide hot tub market revenues estimated at $1.1 billion.
The number of hot tubs in the US is estimated at 5.8 million, with the majority linked to single-family residences, rather than shared condominiums or apartments. Using an estimate of 80% for single-family residences of 5.8 million total hot tubs yields 4.6 million hot tubs associated with single-family residences. With a reported 20-year lifespan for the hot tub, if the market is stable, then approximately 230,000 units would be sold each year for replacements. In 2009, just 150,000 units were sold, well below the replacement level. While COVID sales may have exceeded the replacement rate, the market declines in 2022 indicate that the market is softening again.
A majority (51%) of consumers are either very uninterested (37%) or somewhat uninterested (14%) in owning a hot tub, compared with 9% who are very interested or 19% somewhat interested. Still, this is a niche market.
Will the hot tub market overcome the barriers and grow in future years? Perhaps the top hot tub brands like Jacuzzi, Sundance, Bullfrog, Artesian, Caldera and Hot Spring will deploy effective growth strategy marketing to overcome these barriers and drive growth. And, if, as one source claims, one in 10 homes are now worth more than $1 million, the hot tub investment may seem relatively affordable. I have to admit, I’m still thinking about taking the plunge.