Slowdown or springboard?

The importance of the work you do today in setting yourself up for success tomorrow.

By Matt Gruhn, MRAA President

As you begin to strategize inventory, staffing, and marketing plans for the 2026 model year, it may be tempting to focus only on the immediate pain of soft retail demand, tighter credit, eroding margins, and the rising cost of carrying boats that have already sat for too long on your floorplan.

Yet history is clear in demonstrating that slow markets create the next generation of winners. Smart dealers will use today’s turbulence to develop sharper systems and more robust, rewarding customer experiences through a wholesale evolution that leads them to a brighter future.

The short-term squeeze

Consumer confidence remains fragile in today’s marketplace. The deadly mixture of inflation and high interest rates, coupled with low personal-savings balances continues to depress discretionary spending, particularly on big-ticket items like boats. Real house prices hover above their all-time high, all the while, many homeowners are staying put due to the low interest rates they locked into. Instead, second-lien borrowing at credit unions has jumped more than 50 percent in the past two years, and loan-delinquency rates, though still below crisis levels, are marching upward.

These realities are squeezing financing approvals and forcing dealers to discount more aggressively to clear aged units. Margin pressure is real, and it serves as a constant reminder that yesterday’s playbook can’t carry us into the next cycle.

The rapidly changing consumer

At this spring’s American Boating Congress, strategist Rishad Tobaccowala warned that companies lose not because competitors defeat them, but because they refuse to recognize market shifts.

Economist and futurist Shawn DuBravac added deep insights to how the consumer market is shifting, with data noting that there are nearly twice as many women currently in college as there are men. Meanwhile, the share of men who are “NEET” — not in employment, education, or training — is rising and is projected to keep climbing over the next three to four years.

DuBravac’s conclusion was stark: “The person who walks into your showroom today will look very different 10 years from now, and so will the person who decides how the money is spent.” 

Gender balance, educational attainment, family structure, and consumer expectations are all tilting in new directions, and my warning to you is that dealers that treat 2025 solely as a quest to survive a down cycle will miss a rare window to fully reimagine their go-to-market strategy and set themselves up for success. Sure, there are band-aids you can apply now; but with that approach, you’ll never feel cured of the ailments you’ll deal with as the market continues to change year-after-year at an increasingly rapid pace.

Leverage technology

Artificial intelligence is shaping up as the next watershed.

During the Great Recession, 35 percent of boat dealers went out of business. The survivors, the forward-looking retailers embraced digital retailing tools, a tool that was not widely adopted in 2008. Artificial intelligence, similarly, has already become that must-have tool that will accelerate your dealership’s performance.

Chat assistants that guide buyers through product and specification choices; predictive service scheduling that anticipates labor demand; dynamic pricing engines that react to floorplan costs in real time — these are not distant ideas. They are off-the-shelf solutions that early adopters are already stitching into their workflows.

You do not have to write code to participate. But you do have to experiment.

My advice to you would be to start your journey with AI with a narrow use case, such as automated lead-response text (from experience, I can tell you that many dealers could use the help here!); a basic inventory-turn forecast; or an AI-enhanced F&I presentation. Then, measure what happens. Want an easy place to get started? Check out the online course catalog at MRAATraining.com and engage with the recent Ask The Expert Webinar titled “Chart a Course with AI in Your Dealership.”

Re-engineering the dealership for the future

So, what does purposeful dealership evolution look like in practice?

First, audit your cost structure with fresh eyes. Separate expenses that protect customer experience from those that merely preserve habit, then redirect every free dollar into areas that expand lifetime customer value: service capacity, mobile maintenance, and subscription-style storage or concierge offerings.

Second, rethink the buyer journey under the assumption that an increasingly educated, time-constrained, and female-led household controls the wallet. Financing conversations should shift from interest-rate tables to total-lifestyle value. Combat price objections by showing how a new boat intersects with family recreation and mental-health benefits. Frame the purchase not as a luxury but as time well invested.

Third, build your internal data discipline now, before sales rebound. Track sales conversions and post-sale engagement, from service visits to accessory purchases, and consumption of your digital content. The data-based evidence you can build now will inform smarter stocking decisions and more credible negotiations with lenders and builders alike. And AI can accelerate your understanding of what the data means for your business.

Finally, cultivate a dealership culture that celebrates learning. Mandate that every team or departmental meeting bring one insight from a class, a webinar, or a conference session, and ask managers to document and commit to how they will act on it. Ask your team to explore (and share!) how utilizing AI can help your business grow. Continuous improvement is easier to talk about than to operationalize, yet it is the single best path to solidifying your business.

The signs are there. How will you respond?

Tobaccowala’s assertion lingers: “The best companies and best leaders are never defeated unless they decide to defeat themselves.” Dealers who wait for stability before they experiment, who view demographic change as someone else’s worry, or who dismiss AI as a fad, are choosing to stand still at the very moment the market is shifting beneath them.

Yes, margins are thin and inventory costs sting. But strategic inflection points rarely announce themselves with perfect timing. Treat the coming year as a strategic pitstop: tune up your dealership, upgrade your technology, retrain your team, and redesign the customer experience for the buyer who will dominate the next decade.

Do that work now, and when the healthier economy arrives, you won’t just keep pace. You will accelerate past competitors who spent the slowdown bemoaning what they see in the rear-view mirror.