How's the weather there? It's about 80 Fahrenheit here.
We're probably about 10 degrees more than it should be, as well. Hopefully that's a very good sign for the market.
Tell us about the products you offer.
We don't try to branch out too far. We just do the hot tubs and accessories, and also log cabins and gazebos. We have played around a little bit with saunas, but we didn't do much with them.
I've been in the industry, on and off, for about the last eight years, and 1 Stop Spas has been an independent company for about four and a half years now. So we came into the industry just as the economy was taking a dip. But we're still here now, which is a good thing. So, anyway, we've taken the company through the hardest of the economic downturn, really, and we're coming out thriving from it because of the lack of competition. It seems all of our competitors pumped a lot of money into their showrooms, and unfortunately they couldn't get the business back, whereas we kept our overhead down, kept our pricing reasonable and kept our level of customer service through the roof, and we get a lot of recommendations. That's where most of our business comes from.
Do people typically call them hot tubs there?
Generally in the U.K. it's just known as a hot tub. I know in America they like to call it a spa. That's my preference, as well. I prefer to call them spas; to me a hot tub is just a low-end spa that you just sit in and socialize in, whereas a spa, to me, is about hydrotherapy and health benefits.
And that's where a lot of our sales come from when we're speaking to people. The makes that we sell are good hydrotherapy models, so we refer to them as spas. I think using that term does imply that distinction to the U.K. customer.
You mentioned that you lost competitors recently. How much competition do you have?
We used to have, in our area, between eight and 10 dealers, all within 50 or 100 miles of us. Now we're down to two competitors. The total overall demand from the consumer is down with the current climate, however the supply is far lower, so we tend to be a lot busier now as a result.
Can you compare the U.K. and American markets?
The U.S. market is a lot bigger, and a lot more well established than it is here in the U.K. However, we're getting to that stage here where hot tubs have been known for about 10 years. We're getting a lot of second-generation and even third-generation sales now. You had that in the States some years ago. Would you agree with that?
Well, the hot tub boom really started out in California in the '70s, and I wouldn't imagine that had much of an impact at all in England.
No. Not at all. I was doing a lot of work, originally with a Canadian spa company, and I learned a good amount about the U.S. market from them. But we don't sell those Canadian hot tubs anymore, and now we're working independently.
That's how a lot of American hot tub dealers work, as well. They're not tied to a certain manufacturer.
I think that's a big difference. In the U.K., up until about a year ago, there were a lot of people that were just tied to a single manufacturer. We were probably one of the first companies to really go independent. We've got four different manufacturers on our books. And the biggest thing we like to offer our customers is flexibility and choice, rather than trying to ram one particular make down their throats. Customers here really don't like that. If you're hard selling one product and slagging off the competition, the U.K. consumers can see through that. They can see through salespeople, and that puts people off slightly. We like to offer a huge range, and we know we've got a hot tub to fit every budget and every requirement, so we don't need to hard sell.
In the U.S., spa manufacturers used to emphasize the party and sex aspects of the product. That's changed into hydrotherapy and family togetherness. What's the marketing emphasis there?
Because we were a little further behind, we picked it up when marketing underwent that change in the United States. The market here naturally grew during that change, so the market has really been based on those hydrotherapy and relaxation messages.
Before the downturn, manufacturers began selling spas with pop-up speakers and televisions, lights and fountains. That's not emphasized as much anymore, and people are now looking at value.
It's exactly the same here. We've actually stayed away from the pop-up teles and thing like that, as a dealer. Because we do repair service, we found that if you start putting in gadgets like that, it actually becomes more of a burden to the dealer when it comes to aftercare and warranties. The main thing we have done is focus on selling a good-quality spa with value in it with a decent level of hydrotherapy. I think customers are better off spending that money buying a separate system and mounting it on a wall or a gazebo for about the same price. We try to educate our customers and get them to concentrate on the quality of the spa, and the quality of the hydrotherapy as opposed to the gadgets. Now, I'm talking about face-to-face sales. I can see from an Internet point of view how the gadgets would help. But we advise against it.
You mentioned selling log cabins. What do you mean by that?
It's more of the Nordic style of cabin. The gazebos that you always used to see from America and Canada made of cedar, they're going out of fashion, and we don't sell many of them at all. So people now are going for the open, four-post gazebo or for a full log cabin, then having the hot tub as part of the experience.
What about things like steps and surrounds?
We sell a lot of accessories. We don't just sell the hot tubs, but we do full repairs and service of each make, as well. And to be honest, 80 percent of our business is actually on the repairs, because a lot of our customers' hot tubs are getting to be between six and eight years old, and things are going wrong. So that's where the majority of our income comes from, and that's where we tend to make the most of our additional add-on sales, as well. So whilst we're at a repair we'll take a selection of accessories with us and offer them to customers. We use a lot of DuraSteps, Cover Valet, all those types of products; plastic steps, generally.
Here, the outdoor living room is an important trend. The yards there are smaller, I'd imagine?
Generally property here doesn't have as much land as in the U.S., from what I've seen. Land is a bit more of a premium because it's a much smaller country and it's a lot more densely populated. So, since there's less room, we don't have the big grills or anything going on. People might just have a little barbecue and that's it. The same thing goes for the hot tubs, really. We don't sell many bigger than 7-foot square. Your standard five- or six-seater is what you really get. There are a few stately homes which will go for the swim spas and the larger spas, but generally they're smaller.
