Really interesting article about the state of the golf manufactuers

[Hacker Khan]

Thought this was a really good read talking about the US sports shops Dicks (stop it) Sporting Goods and how they have got rid of all their PGA pros from in store.

http://www.mygolfspy.com/dicks-sporting-goods-fires-500-pga-pros/

 

[SVB]

Agreed, a (surprisingly?!?) well written and considered piece. I wonder what this means for the UK market and AG et al?

 

[GB72]

I also agree, very interesting read. The model applied by Dicks seems very similar to that being used by American Golf and Direct Golf in their stores but both are backed up by a strong online model which may help lessen the impact on them.

It will be interesting to see who blinks first in what appears to be a bit of a game of chicken between the stores and the manufacturers. Do the manufacturers cut back on their release schedules to maybe one big release a year. That would almost certainly impact on their bottom line with no new models to ramp up customer enthusiasm and to appear in the press and promote the brand. Alternatively, do the stores give up on the more personal, custom fit option that has been plugged so hard over the last few years. Will the larger chains move back to the stack them high, sell them cheap model with only off the peg options available. That could impact either way on club pros who could regain customers by being the only custom fit option in town or lose them as the stores compete on lower prices with the reduced overhead. Maybe the stores start to send those who want fitting to the manufacturer fitting centres instead of doing it themselves.

I think that this development in the US will have a further reaching impact and I would be interested to see how it is treated in GM. As a US issue at present, will it be a small story or with the further reaching impact, it would seem ripe for an in depth assessment of the golfing market.

 

[Canary_Yellow]

Looking beyond the immediate job losses, I can't otherwise see the bad news in this article.

It reads very much to me that the stack 'em high sell 'em cheap establishments will be the ones that are most effected, the very same ones that are doing everything they can to price local pros out of the market.

I also don't think it's quite right to badge American Golf in the same category as Dick's sporting goods - AG is a specialist golf retailer, Dick's is a sports shop - it'd be like JJB or DW having golf pros.

All markets have peaks, troughs and bubbles and part of that is the weaker, inefficient competitors without a clear market niche being weeded out and left by the wayside. It's good to see that it's the big guys being effected this time round and less so the smaller specialist retailers / pro's that offer a niche product which somewhere like Dick's could never offer anyway. This is simply a market correction of a beyond saturated market.

People that want to buy as cheap as possible with no advice will still be able to, ebay isn't going anywhere and nor will the purely online vendors, and those that want good advice will still be able to go to their local pro or other specialist vendor.

In my opinion, anything that supresses the constant barrage of marketing and new products is a good thing.

 

[BoadieBroadus]

a number of the points in the article ring true with me. i would be in the bracket of golfers who would quite merrily change their driver every season for no other reason that i just fancied one, but I would never ever buy the latest thing as soon as it comes out because i know that sooner rather later it will be £50 cheaper.

i did buy a new xhot last year in May as i had pro shop credit mounting up. i missed a free hybrid thrown in by about 4 days. did i need the hybrid? no. did it affect my shots with the driver? no. was i seriously ticked off with the deal? yes, i think its human nature to be when you feel you missed out.

as a result I'll probably never buy a Callaway product unless i really know it's price has hit the floor, same with TM.

 

[Hacker Khan]

I think it explains well why manufactures, especially TM, are so keen to get new people playing the game. As they know they can't keep selling new stuff every year/6 months to existing players. And the supply of new people playing to replace the old ones when they shake a 7 is currently not big enough.

Especially as I expect a large percentage of existing golfers who play fairly regularly are the wrong side of 40, and therefore slightly less likely to be seduced by new stuff every year/6 months/ 4 weeks (with the exception of most of the posters on this board it seems ).

I've bought some golf stuff from Dicks when I have been over in the US and they did dedicate a good amount of floor space to golf. In between the rifles, hunting knives and bullets also on sale.

 

[Ethan]

I am no fan of AG, but they are a more focussed operation than Dicks. Dicks is a large general sports store with golf sections, heavily dependent on Taylor Made. Sometimes they have special versions of TM kit made just for them (although these are usually nothing to write home about). I visited a few on various US golf trips, but then gave up and stuck to Edwin Watts or Golfsmith because they had better ranges of kit.

 

[Alex1975]

Very interesting if a little over the top!

 

[BoadieBroadus]

but then gave up and stuck to Edwin Watts or Golfsmith because they had better ranges of kit.

edwin watts filed for bankruptcy protection at the end of last year, probably for reasons not too dissimilar to Dick's cutting the costs of its golf dept. being a better retailer hasn't protected them from the same issues sadly.

 

[Ethan]

edwin watts filed for bankruptcy protection at the end of last year, probably for reasons not too dissimilar to Dick's cutting the costs of its golf dept. being a better retailer hasn't protected them from the same issues sadly.

I know that, but filing for bankruptcy in the US is common and less of a big deal than here. They are still trading and I get product emails weekly from them. Most of the US airlines are permanently in bankruptcy.

Still, EW is a better golf store than Dicks ever was or will be.

 

[Alex1975]

Is this good for us the consumer?

Also, Do we think if the article is to be believed that we will see the reemergence of the club pro shop?

 

[BoadieBroadus]

I know that, but filing for bankruptcy in the US is common and less of a big deal than here.

but still not a signifier of robust financial health. it does support the theory that the activities of the manufacturers aren't necessarily helping the retailers

 

[Ethan]

but still not a signifier of robust financial health. it does support the theory that the activities of the manufacturers aren't necessarily helping the retailers

Clearly not, but they might do OK. I think EW suffered at the hands of internet suppliers, people selling imports on ebay and an overall shrinkage in the market due to the US economy and Tiger's decline.

 

[Jensen]

With manufacturers bringing out replacement models every 6/12 months doesn't help. How can you feel that you've made the right choice but more importantly have got value for money, only to find that's it's been reduced in price a few months later because the next replacement has been released.
IMO TaylorMade are a joke the way they bring so many replacement models out and I feel that this really devalues the brand. TaylorMade IMO have a very cheap nasty brand image and I cannot see me buying a TM product.

 

[hovis]

With manufacturers bringing out replacement models every 6/12 months doesn't help. How can you feel that you've made the right choice but more importantly have got value for money, only to find that's it's been reduced in price a few months later because the next replacement has been released.
IMO TaylorMade are a joke the way they bring so many replacement models out and I feel that this really devalues the brand. TaylorMade IMO have a very cheap nasty brand image and I cannot see me buying a TM product.

I think you'll get the usual response to this as " if you dont want the new tm product then don't buy it" people must have deep pockets as they seem to sell alot of clubs.

I personally find it very annoying when you folk out for the new gear to be told its been bettered and improved 6 months later. If i didnt get my sldr for trade price i would have waited until January and picked one up for a song

 

[Doon frae Troon]

Good spot OP.
In my time as a pro 1966 to 1974 the main companies Dunlop, Slazenger, Letters, Wilson, Ben Sayers, Spalding etc changed models every two to three years.
I remember speaking to Hope Letters who said that it cost 10% of the retail price to make/produce a golf club from the factory floor.
The rest was sales, marketing, promotion and markup.

So in today's terms your £400 driver would probably cost £40 to make.

 

[ManinBlack]

Clearly not, but they might do OK. I think EW suffered at the hands of internet suppliers, people selling imports on ebay and an overall shrinkage in the market due to the US economy and Tiger's decline.

This is what really damages retailers. Bad enough that internet sellers don't have the same overheads but when the likes of Direct Golf can buy in the USA, with the manufacturers' connivance, at less than the price obtained by UK retailers, the retailer doesn't have a chance.

 

[nemicu]

Clearly not, but they might do OK. I think EW suffered at the hands of internet suppliers, people selling imports on ebay and an overall shrinkage in the market due to the US economy and Tiger's decline.

But clearly that is a classic case of "not moving with the times" - the same thing happened with Kodak and Comet for example.
Regardless, sales are consumer driven and if there wasn't a market with even the slightest margin to sell in, companies would go out of business pretty quickly. Sadly, most people would rather buy off the shelf from the cheapest available source than go and see their pro and get fitted properly for a set. The modern trend of adjustability plays into the hands of the internet shopper even further - even if it's still just as unlikely to identify a correct fit by chance.
I think that most companies know this and are more than happy to sell en masse to whoever rather than connecting their product with the ideal player profile. A lot of companies tout "custom" capabilities, but in reality they probably couldn't give a monkeys if they sold only to online customers if they paid full retail. Beware of any company where you can buy their products at their website - it looks like Callaway are a candidate for making their own downfall.

 

[Alex1975]

Good spot OP.
In my time as a pro 1966 to 1974 the main companies Dunlop, Slazenger, Letters, Wilson, Ben Sayers, Spalding etc changed models every two to three years.
I remember speaking to Hope Letters who said that it cost 10% of the retail price to make/produce a golf club from the factory floor.
The rest was sales, marketing, promotion and markup.

So in today's terms your £400 driver would probably cost £40 to make.

Must be even less now, manufacturing being better and so on.

 

[HomerJSimpson]

But it isn't all the manufacturers. The Titleist, Wilson, Ping and Mizuno roll outs are still pretty much a set 18-24 month period. It's only the likes of TM, Cally etc who have started pushing more regular upgrades and some have jumped on the bandwagon but others are still holding strong