Today I went online and searched up “reasons to be happy”. It was a real challenge to find anything positive. I came across one article from 2013 and another from May 2018. And that’s it. Hasn’t anyone felt the need to write happy stuff since then?
If you believe everything you read in the Press, we do seem to be experiencing some unhappy times in the retail sector. Hysteria, conflict and sensation sell newspapers, whilst stories of doom feed the television news channels. However, they don’t do much for our confidence, (or sensible voting when we’re asked difficult questions), but is it all bad? How much is media hype, should retailers be genuinely worried and what can we do?
"It isn’t surprising to see growth slow down recently in the golf retail industry, given the mixed bag of weather and economy."
The economy is having a hard time. There’s pressure coming from every corner and a high level of uncertainty that isn’t good for UK businesses. Despite this, retail continues to grow year on year. If we look at the 3 months leading up to July 2019, ‘general retail’ is up 3.3% in value, compared to the same 3 months last year. The golf trade is slightly up over that period but, unfortunately, the poor weather had a greater impact on golf sales, which affected the High Street far less. Year to July we were up by 3%, although growth now looks slightly lower.
It isn’t surprising to see growth slow down recently in the golf retail industry, given the mixed bag of weather and economy. But if you’re looking for positives, take heart that all news and commentary might not be as bad as we’re led to believe.
When I was starting out in this industry in the mid-1990’s, a retail ‘expert’ writing for the Financial Times, declared that golf shops wouldn’t exist by the year 2000 and that golf retail would move to larger Off-Course stores. Clearly, that hasn’t been the case and over the last decade, On-Course golf shops have done very well. You could even say they’ve thrived.
The industry specialists at Golf Datatech have been tracking retail sales for over a decade, and although we can’t compare today’s figures to those from the year 2000, we can look back over a significant period of time and show you some interesting statistics.
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Looking at the core golf Hardware and Consumables, (clubs, balls, and shoes), On-Course sales have grown by 24% in value over the last decade, while Off-Course is now 33% larger. Both channels have dealt with global recession, political chaos and a dramatically different retail scene, and come out on top. In fact, both are significantly larger than they were 10 years ago.
The picture is even more interesting when you include the Apparel category. With these sales figures added to the pot, we see that On-Course has grown 35% in over a decade, and Off-Course is 26% bigger. With a constantly-evolving environment and changing product mix, perhaps the key to survival has been to adapt – specifically, of course, to what the customer wants.
Looking closely at some of the key categories, there are more subtle changes to the retail market, with units down, in most cases, across both On- and Off-Course channels. The worst market is Woods: down in units by around 40% in both channels. This may sound gloomy but it’s possibly a sign of the times and an indication of a category that has cleaned-up its act and is now delivering better value to customers. Custom fitting has lengthened the replacement cycle and consumers now buy less additional fairways and hybrids. As a result, there’s less clearance and dumping from brands, and that has to be a good thing. After all, value is up still up in both channels: between 10% and 15%, and over the last decade, we have seen circa 90% increase in Average Sales Price (ASP).
If we look at Consumables, ball sales are down in units, and more so within the Off-Course channel than On-Course: down 25% compared to 11%. Some of this has to do with better quality balls lasting longer than they used to, but there’s also been switch by the consumer to more premium balls, which they may spend more time looking for on the course. That’s not always good for speeding-up play on the course, however.
"I have said it many times and I will say it again now – The best thing any retailer can do is focus on the customer, and deliver the best experience"
Gloves have fared better when it comes to units: still within 5% of a decade ago, and value is up over 25% across both channels. The fact is, even with the impact of mass merchants and online giants, such as Amazon, consumable spend is still up.
Across all the main Hardware and Consumable categories, spend is up by double digits, for both On and Off-Course, while ASP’s sit between 28% and 118% over the same period of time.
I have said it many times and I will say it again now – The best thing any retailer can do is focus on the customer, and deliver the best experience, and convenience, that you can. More and more research is coming out to support this view. A recent Gensler report concluded that 51% of the customers’ time is spent enjoying the retail experience: so, less than half is about the transaction. While another study from ICSC found that 76% of Generate Z customers (currently 13-19 years) prefer physical shopping, to online. They’re more interested in the experience, they want to connect with people.
"71% of shoppers consider retail staff to be a critical part of the experience. This is an opportunity for every golf retailer".
While we might think the younger generation is all about the internet and their mobiles, this might not be the case. In-store connectivity and interaction are key, as shown in a PWC report which highlighted the importance of shop staff when it came to making a purchase. In a recently published report, PWC concluded that 71% of shoppers consider retail staff to be a critical part of the experience. This is an opportunity for every golf retailer.
Experience and Theatre
As an example of how experience can deliver both sales, and margin, I was very impressed by a store I came across in London last week. The Walls Magnum experience store in Piccadilly Circus is a great example of adding value through theatre and service. With pictures and sculptures of Magnum ice creams in various formats, it’s one of the strangest shops I’ve ever been to. But as a ‘customisation bar’ serving its famous produce, if you ever needed an example of how experience can add value, this is it.
Choose your lolly, dip it in chocolate, add sprinkles and there’s your very own custom-made ice cream. And, while it’s the same ice cream you can buy in Tesco for £1, or the local corner store for £2, with the added experience and customer interaction, it’s a whopping £5.90. Undeterred, eager participants were queuing round the block.
It just goes to show that when you combine a great retail experience with the offer of convenience, and tie those in with opportunities at the point of demand, (think golf course, driving range or public attractions site), there’s still a lot of potential out there.
It’s definitely not all doom and gloom.
Phil Barnard is European Partner of Golf Datatech and Chairman of Crossover Technologies, the makers of the market-leading sales and stock management solution, XPOS. Follow him on Twitter @phil_barnard