Contributor:
Travis Sheldon | Senior Manager, Strategic Growth & Innovation
As recreational boating faces challenges in demand, gaining a competitive edge in the marine industry is becoming more crucial. Developing new boats is essential as current owners, primarily Baby Boomers (aged 60 – 78), age out, paving the way for increased spending by Millennials (aged 28 – 45).
For instance, a Boat Trader study revealed that 49% of private sellers who purchased boats within the past one to three years plan to upgrade their vessels, with Millennials being the largest generational group represented.1 This coincides with Millennials being the largest generation in the U.S. and represents a significant opportunity for the recreational boating industry.
The key question is whether today’s boating manufacturers and suppliers understand the trends that will captivate this next generation and how they can adapt their strategies accordingly.
Cherry Bekaert recently attended IBEX 2024, a leading technical boat-building showcase, to discover the latest innovations and ways the industry is being transformed. In this article, we discuss our observations and share insights on how we can support boating manufacturers and suppliers in future-proofing their business.
Technology Integration Is Paramount
Digital displays, switching, advanced navigation and audio streaming features are becoming standard among younger, tech-savvy consumers who are accustomed to touchscreens in daily life (smartphones, tablets, automotive, smart home devices, etc.). Innovations such as 360-degree camera displays are enhancing the boating experience. Boaters can see and record what’s happening behind them, which is particularly exciting for water sports enthusiasts who want to capture and share their adventures.
With no signs of technology slowing down, technological innovation is essential for enhancing today’s boating experience and winning future generations. To capitalize on this trend and emerging trends, utilizing customer segmentation and Voice of the Customer (VoC) strategies is crucial.
These approaches allow companies to leverage data-driven insights, identifying key consumer segments and tailoring offerings to meet the specific needs and preferences of the next generation. By doing so, businesses are well-positioned to anticipate and fulfill the desires of the evolving market, securing a competitive edge in the digital age.
Sustainability Is Emerging
While demand for sustainable boating practices is still maturing, advancements in eco-friendly materials and waste reduction initiatives are progressing. Understanding demand maturity for sustainability is crucial, as it allows companies to adapt their strategies and offerings accordingly.
Large propulsion companies like Volvo Penta are integrating sustainability into new product designs. Another company, Hercules, finds itself as a leader in the marine industry’s shift for electric propulsion. Meanwhile, a pavilion showcased sustainability pure plays from diesel, electric outboard engines and more.
Additionally, integrating sustainability reporting and compliance into business practices is increasingly important, ensuring companies not only meet regulatory standards but also align with consumer expectations. By adopting these measures into their categories, businesses can better navigate the evolving landscape and position themselves as leaders in sustainable innovation.
Manufactures Are Designing for Longevity
With fiberglass boats averaging a 40-year lifespan, builders and suppliers are focusing on future-proofing designs to ensure durability for generations to come. Boating manufacturers evaluating materials for constructing components, such as fiberglass, plastics, metals, and synthetic blends, may be eligible for research and development (R&D) credits.
These credits can provide significant financial incentives, encouraging innovation and experimentation in material selection and design processes. By taking advantage of R&D credits, companies can offset some of the costs associated with developing more sustainable and durable products, ultimately enhancing their competitive position in the market.
The Big Are Getting Bigger
As boating needs become more robust, so does the demand for diverse materials, prompting larger manufacturers and suppliers to expand through acquisition. For instance, Dometic has now diversified beyond its compact refrigeration roots to offer a range of cooking, shelter, cooling, marine and power solutions for small spaces like RVs and boats. Brunswick’s Group’s Navico is also making significant strides to expand offerings, capacities and capabilities.
To navigate this dynamic landscape effectively, companies can benefit from a comprehensive business strategy, adjacent market assessment, and merger and acquisition (M&A) strategies and services. These approaches help businesses define, build, and deploy growth opportunities by identifying potential markets, evaluating strategic partnerships, and optimizing acquisition processes. By aligning these strategies with their core objectives, companies can enhance their market position and drive sustainable growth.
International Suppliers Are Entering the Playing Field
New entrants of small components such as props, propellers and steering wheels hit the stage floor, indicating a growing foreign interest in capturing a share of the U.S. market.
Doing business globally creates opportunities, but it also carries numerous challenges. When companies decide to conduct business internationally, many decisions impact the amount of taxes they pay. Considering international tax implications is crucial, especially regarding imports in a bill of materials. Navigating these complexities requires careful planning to optimize tax outcomes and ensure compliance, ultimately supporting a global expansion strategy.
Your Guide Forward
Navigating today’s dynamic market requires strategic insight. Cherry Bekaert’s Strategy and Innovation team can help boating manufacturers and suppliers overcome challenges and achieve sustainable growth. Our professionals provide innovative strategies, working collaboratively with certified public accountants and advisors, to help your business adapt to changing economic conditions and trends, maintain compliance, leverage tax credits and incentives, and ultimately gain market share.
Related Insights
Notes:
- “MILLENNIALS' DESIRE TO UPGRADE AFTER BOATING BOOM PURCHASE REVEALED IN BOAT TRADER'S PRIVATE SELLER SURVEY,” PR Newswire, May 2, 2023, https://www.prnewswire.com/news-releases/millennials-desire-to-upgrade-after-boating-boom-purchase-revealed-in-boat-traders-private-seller-survey-301813289.html.
