Divers, the Internet and the Industry: Part I

It’s no secret that divers who buy gear from Internet retailers save money. Some dive shops have come up with creative strategies to maintain their competitive position, but for the most part local dive stores are at a serious price disadvantage and a lot more than that.

For decades, we’ve heard the rallying cry “support your local dive shop.” In the 1950s, companies like U.S. Divers sold gear by mail, but in the 60s dive stores began to spring up. Skin Diver Magazine carried ads for discount dive stores like Central Skin Divers in New York City; ads for discount camera houses followed and soon discounted Nikonos cameras were part of photo store ads. Dive stores didn’t like the competition, so when Rodale’s Scuba Diving Magazine was introduced in the early ‘90s it refused ads from mail order houses; in return most dive stores stopped selling Skin Diver, replacing it with Scuba Diving Magazine. Skin Diver’s circulation fell, along with advertising revenue, and after efforts by several publishers to resuscitate it, the magazine stopped publishing in 2003.

Today, the “support your local dive shop” mantra is vital to equipment manufacturers, who fear the Internet will put many dive stores out of business. In fact, in the past seven years, 687 new shops have opened, but 735 have closed. Fewer dive stores may mean that fewer divers will be certified, and beginners are the major market for manufacturers. While some companies sell gear through both the Internet and stores, others, such as Scubapro only sell their gear directly to dive stores, hoping to maintain price and prestige. And keep the dive stores alive and certifying new buyers. (Note: how Scubapro gear gets online is another story we’ll discuss later.)

PADI (in fact, all agencies) exists to certify divers, so shrinking dive shops doesn’t help. PADI does not accepting advertising for Internet retailers in its magazine, Sport Diving. Nor does Dive Training Magazine. It depends on dive stores, where the magazine is distributed free and the higher the circulation the greater the advertising revenue.

But is “support your local dive shop” a dying business model, when equipment is so much cheaper from Internet suppliers (some of whom have dive stores)? After all, a basic Economics 101 theory is that consumers will naturally move to purchase products where the price is lower. Dive equipment is pricey. So, when a diver knows that $800 BCD in his dive shop’s window can be purchased for $500 with just a few mouse clicks, he can be hard pressed to support his local dive shop — though he depends on the shop to be there when he needs it.

But what does a diver need from his local dive store that he can’t get online? Well, the Internet can’t certify divers or pump air or help a novice assemble his equipment for the first time. Those are needs. But, other services dive stores provide — faceto- face advice, technical information, hands on opportunities with gear, trips with local divers, the smell of neoprene, schmoozing — aren’t essential to many certified divers. How, then, will the dive store landscape look ten years from now. And what will be the effect on sport divers?.

Undercurrent is neither advocating Internet shopping nor supporting local dive shops. We are interested in looking at how the Internet will affect us — not just where we buy our gear, but where people get interested in diving, get certified, buy air, meet fellow divers, and whether the dive store of today will morph into another form tomorrow. We emailed many of our 13,000 subscribers and an additional 15,000 nonsubscribers to garner their attitudes about Internet buying. We are also contacting dive stores and talking with many people in the industry. The Internet is a boon for some, a bust for others. But what will the effect be on you and me, sport divers?

In our first installment, we will look at the motivations of divers who buy gear on the Internet. Most Internet consumers don’t worry about supporting their local camera store, book store or pharmacy. But, do we divers have a different relationship with dive stores than with other merchants? Let’s begin this three-part series by seeing why divers shop the Internet.

The Cost of Equipment:

Yes, dive equipment is awfully expensive. One of our respondents, Keith Smith, said that he looked into diving five years ago, but “was scared away by the prices that the dive shops were charging, but last year I was looking online and found prices so low that three friends and I have purchased $10,000 worth of stuff, including scooters.” Divers on tight budgets have to make spending choices. Lee Chamberlain told us that “the difference of $20 to $100 can make the difference between a day or for that matter a week’s worth of diving.” And then there are families: Rick Goble told us that “I purchased fins, masks, and snorkels for my two sons who were taking their certification at a local shop and was charged 250 percent more” than he would have paid online.

Thanks to discounts, divers like Douglas Murphy buy better gear. After getting certified, he found the cost of gear “prohibitive at my dive shop and others in the Chicago area.” Online “the pricing was at least 50% less, which allowed me to purchase mid-level products.” He could afford to buy an integrated dive computer, “where at my local shop I would have had to settle for a basic pressure meter and would not have been able to afford a computer.”

Even many high-end purchasers are price conscious. Denton Byers says, “I often giant-stride into the water with $10,000 of gear on me, and that figure excludes any camera/hunting/ video/rebreather gear. Through a dive shop, it would have been $15-$20,000, and some items I couldn’t afford.”

No Sales Tax

All but five states collect sales tax, with rates as high as 7%, plus add-ons from counties, cities, and local districts that lead to 8 or 9% rates. States can’t collect tax on outof- state on line purchases, so for nearly all divers there is a cost incentive to shop online.

Convenience:

To most Web buyers, convenience is as important as price. One can sit at home (or in the office on a boring day), place an order, and have it delivered the next day if he wants. Websites are open 24/7. There is no driving to the store, Janice Heasty says, “When I need a major item I have to drive 2 ½ hours.” And there is no wasting time in the shop looking for merchandise they may not have. And, it can mean saving your bacon. Northwest diver Doug Banik recalled, “I was about to leave for L.A. and wanted to try my new drysuit in Catalina, but needed undergarments ASAP.” A Seattle online shop, Edmonds Technical Diving, shipped them overnight to his L.A. hotel. “It arrived before I did!” Michael Weber (Leesburg, VA) got a charger for his Sea Doo Scooter shipped to Mallorca in three days.

Most online buyers pay shipping costs, though policies and promotions vary. Greg Barlow, a customer of Dive Rite Express, mentioned that their site (a factory-authorized reseller of Dive Rite brand gear) regularly offers free shipping. Still, Richard Osborne finds “even when I do pay shipping charges I am still ahead of the local dealers’ prices.”

For some people, returning an unwanted item in person is a hassle, not only in the time it takes, but perhaps in having to explain the reasons for the return — or persuade the retailer to accept it. Most Internet retailers have satisfactory return policies. Undercurrent subscriber David Steinberg (Portland, OR) has returned several items purchased from scuba.com, and says he’s been issued “either an online certificate for credit or money back, no questions or hassle, all handled electronically, where possible.” The biggest hassle is having to pack things up and ship them, though UPS and FEDEX will, for an additional fee, pickup parcels at most homes. Generally, the consumer pays the freight for all returned goods.

Unlimited Online Information and Selection

Internet purchasers love surfing the web, comparing the products and features side by side. “It’s easier to look at a wider selection on Internet sites,” says Denton Byer, “and you can get some unbiased comparisons that are manufacturer-neutral. I ended up selling half the gear I bought through my shop, because it wasn’t the right gear for me. Not knowing what else was available was a big reason for this. When I’m ready to buy a product, I already know exactly what I want. The only decision left is where to buy it, and that gets determined by who has the best pricing.”

Many local dive stores carry only two or three major brands of BCD’s, regulators, etc., and clearly can’t stock all sizes or gear. Some divers order a couple sizes over the web to try on. Undercurrent subscriber Chet Hedden (Tucson, AZ) told us he ordered six BCDs from an Internet retailer, determined which one suited him best, and returned the other five for refunds.

Speciality Items

Tech divers are becoming big Internet shoppers. They comprise a small market so their equipment is often not available locally. Raleigh, NC, tech diver Paul Winter noted that 120 cu ft HP steel tanks couldn’t be obtained through any local shop “without putting cash up front and waiting for items that would in all likelihood not show up for six months.” Dive Rite Express customer George Rousseau pointed out, “In Long Beach, CA, where I live only a few stores carry tech diving brands like Halcyon and DiveRite, so I have to purchase online.” Mark Scheele purchased a Shark Shield online because local shops in New Mexico didn’t carry them.

Undercurrent subscriber David Steinberg, like several respondents, won’t purchase life support equipment online. He says, “I believe this is best left to the local dive shops and am willing to pay extra for the face-to-face business on such critical things.” But he does go to the web for “common, noncritical, cheaper items, such as roller bags, gloves, fins, etc.”

Conclusion

Clearly, the Internet is serious competition for reasons beyond price. In the next installments we will look at whether Internet shoppers get faulty or discontinued gear, how warranties hold up, how some dive stores are successfully competing while others aren’t, how the industry’s policies help or hinder the typical diver, and what this may mean for the future of sport diving.