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| ScubaToys.com |
| Internet Business Leaders 2002 |
By G. Patrick Pawling
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Industry // Retail
When Larry Dague decided to mix electronics and water in landlocked Dallas, the result went beyond what he expected.
Dague first learned what the Internet could do for his small retail dive store and training center from a few of his customers, who happened to work for Cisco Systems. He listened. Because he listened, he prospered. And therein lies a lesson: Small fish can swim anywhere they want, if they're smart.
"Now I'm a little dive shop," Dague says modestly, "whose business just exploded because of the 'Net."
Dague opened his shop in July 1997. By July 1998, his sales had reached $162,000. Then something happened. ScubaToys went online. Between July 2001 and July 2002, ScubaToys' sales reached $1.66 million. (The average U.S. retail dive store does annual sales of $355,582, according to a study by Leisure Trends Group.)
Dague had completely changed his business model from a facilities-based shop to an Internet-obsessed business, evolving his retail outlet into a diver-training facility and product-fulfillment center. Internally, he used the Internet to streamline his business practices. Now the Internet accounts for more than 70% of ScubaToys' business. Increased sales volume means he pays distributors less, so he can offer the same products as the competition for much lower prices, "while simultaneously holding better profit margins," says Dague.
He believes technology creates a richer retail experience. "We have customers call and ask, 'How big is that dive computer?' I can put one on my wrist, hold it in front of the Webcam, and they see it seconds later on their computer," says Dague.
The Webcam helps Dague manage the business better as well. "The camera also allows me to watch my store on a laptop or check our sales while sitting in the Admiral's club in a Korean airport waiting for a connecting flight to our final dive destination in Palau."
Enterprises can learn important lessons from ScubaToys, says Bob Parker, vice president of Enabling Technologies at AMR Research. "People talk about return on investment, but you also have to look at something called return on relationship," he says. "What are you asking the customer to do? What are you giving back? The higher the return on relationship, the higher the probability of success. Probably the biggest value ScubaToys can demonstrate is its knowledge. People talk about location, location, location, but for ScubaToys the Internet is the perfect location."
Dague never seems to rest. The shop is in its fourth expansion in as many years. To attract more traffic to his Web site, he created ScubaPics.com, where divers can upload their photos and other site visitors can vote on them. He also offers online educational material and an opt-in e-mail newsletter, and he's rebuilding the Web site to handle real-time inventory updating. He's also considering offering e-learning classes to augment course materials for scuba students.
"My dad's age-old wisdom still applies in an Internet world. 'Make a customer, not a sale.' If you get customers, you'll get sales. I've tried to continue it with our Internet presence," Dague says. "He sold tractors across the country, and his sales would start with a handshake in a cornfield. Mine start with a modem handshake, but the end result has to be the same."
iQ Magazine, November/December 2002
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