Why A Protection Plan for Surfboards Might Be The Next Big Thing
By Vipe Desai
Challenging times are prime for innovation and during the pandemic and it's great to see new ideas find their way into the industry. One new innovation that caught my attention was Surfcare, the world’s first surfboard protection plan. Where if your board gets dinged, they’ll fix it for free. And if they can’t fix it, they’ll replace it.
Now before you roll your eyes and dismiss this idea, take a moment to think about the things you might insure already - like your cell phone, home, car, etc. We already look to protect our purchase of expensive items so it makes a lot of sense that a service like Surfcare would be valued when purchasing a new surfboard - especially as costs of surfboards have risen over the years.
I not only had a chance to catch up with the two founders, Nick Stolz and Rhett McNulty, to get more details of their new service but got some feedback from one of their retailers and a customer. Here’s what they all shared with me.
Now that Surfcare has been available in the market for a period of time, what have you learned about the service based on retailer and consumer feedback?
From the consumer standpoint, all of the protection plans whether monthly, annual, or 2-year, have been getting purchased evenly. It's difficult to say which one will become the favorite this early on. We do expect that we will need time to change buying behavior even if people think Surfcare is great. Surfers aren't used to adding that extra cost to their boards so the increased visibility and education on the value while buying boards in the shops will be key to more large-scale adoption.
On the retailer front, we've learned a lot. With the pandemic's impact on businesses and the heightened sales on boards, many retailers have felt overwhelmed regardless of whether they choose to adopt Surfcare or not. We give retailers two options on how to integrate Surfcare, though. Option 1 is to integrate into their POS, accounting, and inventory systems, giving them more control but also more work to do. Option 2 is where we utilize more of an affiliate type approach issuing unique links, brochures, and QR codes where Surfcare manages the payments, surfboard registrations, and reporting; simply paying the shop back a referral for the business. Almost every shop has chosen Option 2, allowing them to instantly start selling Surfcare at 100% margins at no cost to them and the need for very little training, leaving the heavy lifting to us.
Are you seeing more interest/acceptance from retailers, surfboard manufacturers, or consumers? And how so?
The interest has been great across the board, with nearly everyone seeing the need for a product/service like Surfcare. The DTC manufacturers, like Thread, Almond, and Album, seem to be the quickest to adopt since they are more singularly brand/category focused. On the traditional retailer side, it comes down to personality type and sophistication of the shop. If they are already testing out new products and operating slightly different from the competition down the street, they are more likely to give us a try right away.
The good news is that most retailers who chose not to add Surfcare, usually don't say, no; they usually just ask us to reach back out in a few months. Their reasons for not onboarding now are usually due to a lack of information or some reasons like:
- They are too overwhelmed
- They assume there is a cost to Surfcare
- They assume that they will have to manage the onboarding of a new product as if we are another T-shirt brand; adding SKUs, inventory to their systems, and space on the floor, which… they do not.
Do you think there’s an opportunity to expand this service into other sports and categories like SUP, Snowboards, etc?
Yes. We currently offer coverage on SUPs, Wake, Kite, Foil, etc..., we just don't advertise it much, yet. We will likely move into wetsuits next and we own the domain Snowcare.co for when the time comes. Right now, we are focused on getting our core offering to work at a level that is acceptable to the board manufacturers, retailers, and customers. Once we have that working well, we will branch out from there.
What has surprised you about offering this service to surfers and retailers?
For the value, especially with boards over $800, we are kinda surprised how not everyone is buying this. Further down the road, we will likely fragment plans into separate categories by the price of the board. If you buy a new $800 iPhone, and the protection plan is a no brainer, why not apply the same rationale with your surfboard, considering they're both mostly made out of glass?
Really, shops have their highest potential earnings through Surfcare when they are selling lots of boards, which seems to be the case at the moment. We designed Surfcare to be a simple add on that protects the shop as much as the consumer and makes the shop some extra money in the process.
Surfcare is a non-traditional revenue source for retailers and surfboard manufacturers, why do you think now is the right time for this type of service
I’d say there are four main reasons:
- Protection plans are nearly ubiquitous across everyday products purchased from places like Apple, Amazon, and most other established retailers, making it something consumers are already comfortable with and knowledgeable about.
- The price of boards is increasing, making protection plans more relevant to the consumer.
- Surfboard sales are peaking, making it the opportune time for retailers to capitalize on the additional revenue that comes from attaching protection plans to them.
- Brick and mortar shops are struggling, trends are changing, and large retailers are impacting the smaller ones, thus, protection plans end up supporting the store by limiting discounts due to broken boards and adding additional revenue to shops without them having to take any risk in adding in a new product.
Has the pandemic helped or hindered your growth efforts?
Both...Many shops feel overwhelmed with the heightened board sales and lack of inventory. The idea of adding another product feels like a lot to them. On the other hand, many retailers realize this is a unique time and are willing to try new products that may give them an extra edge in a time where overall store revenue may be unpredictable day-to-day. From the consumer standpoint, it has been positive. With all the extra board sales, our attachment numbers have been much larger than expected.
Can you share any metrics related to your product, even if approximate? The number of shops/shapers selling your service and/or the number of consumers who have purchased a plan?
Some of the shops we are in:
- Becker Surfboards Malibu
- Dive n Surf
- Eastern Lines
- Hayden Shapes
- Ripcurl San Clemente
- Station RBNY
- Thread Surfboards
We currently aren't sharing sales numbers but we can say that we have had a few claims already and that our ding repair network has repaired quickly.
How many shops and/or customers do you hope to have by the end of the year?
In the next 4 1/2 months, we'd like to be in 200 shops nationwide with 2000 plans sold.