Saturday, November 10, 2012

Golf Retail – White Paper

I am often accused of elitism in the sense that some of what I espouse in my writing seems appropriate only for high-end golf shops. I plead guilty. Custom ball programs, retail sales training seminars and birthday cards from the staff, are all top tier concepts that attempt to show how service and good retail programs can be differentiators. This “white paper” will be more generic in scope but more poignant in focus. I want to talk about why some shops fail or decide to fail in a retail sense and define to some extent that failure. Any such conversation demands definition also as to what type retail operation is in fact being attempted. Golf and its stat counters – AGM, Data Tech, PGA, etc., generally categorize golf retail into the following:

A.      Public     B. Private    C. Resort     D. Off-course

It is easy to decipher your shop in these terms but perhaps not so easy would be to classify yourself in more general retail terms. Are you looking to provide with the space, staff and inventory you have devoted to retail, 1) A specialty store 2) A convenience store or 3) A super store?

It is easy to pigeon-hole your shop as Public or Semi-Private but perhaps not so easy to lump yourself in the self-service convenience store bracket, especially after just coming from a meeting where the purchase of a launch monitor was discussed for the range. It is important to determine exactly what you want from your shop in terms of image and profit before making some of the following pertinent marketing decisions:

·         Amount of service –
o   Self-service
o   Limited service
o   Full service
·         Product assortment
o   Life-style, boutique
o   Logo driven
o   Limited to needs of the game
·         Price decisions
o   High markup, low volume
o   Low markup on higher volume
o   High-low pricing – full retail plus sales and promotions
o   Every-day low pricing
Only after one has seriously dealt with these issues and defined what they really expect their shop to represent can one judge success or failure.

According to an AGM member survey the following table is probably a fairly accurate gauge:




Let’s suppose you have determined you are at a public facility that only wants the shop to be a successful convenience store. You have limited staff and budget, you have limited your product assortment to golf essentials and have priced the inventory you do have very aggressively so as to be super competitive. If this is what and who you have decided you are content to be, then realize also that you obviously cannot judge your success or failure against $10.00/round and 30.7% profit margin. What you could be weighing against your savings in time and effort at the retail level is whether that limitation has affected your facility’s image enough to reduce rounds and their revenues. In other words you would be back at the fundamental golf profitability issue of total dollars per round.
Now let’s assume you have decided to not abandon retail and do want to understand the difference between success and failure. Sometimes the important decisions start with knowing what not to do. Often the following issues need to be addressed:

Lack of empathetic (level five) leadership
Jim Collins in his book “Good to Great” introduced the concept of “level five leadership” as someone who blends genuine personal humility with intense professional will.

Lack of understanding of the target market
            Know your demographics and assume a love of the game.

Lack of skilled sales staff
Set the bar high concerning service expectations at hiring and then on an on-going basis train salesmanship

Lack of product knowledge
Use vendors to help educate staff as to product knowledge. There is nothing more telling than staff who not only don’t talk about products in inventory but truly don’t know how.

Lack of service culture
            If you are - or hire a level five leader you will have a service culture.

Lack of proper inventory levels
Inventory levels that make your space “well merchandised but not over inventoried” give you the best chance for retail success. It is like being on second base with no outs.

All of these points have been discussed in previous entries and are worthy of repeating as they are the heart and soul of retail. There is also nothing so constant as change – what was great leadership and knowledge of target markets five years ago did not involve today’s technology and internet. Product knowledge had nothing to do with polyester. People and planning still make for successful retail, but not with yesterday’s skill sets and not without thinking outside the box regardless of your facility’s stature.  Future installments will detail more closely some of these points in as non-elitist way as possible. I thought this white paper approach important because all pertinent determinations regarding identity and realistic goals should be seen as the primary exercise.