Saturday, March 8, 2014

Thoughts on the Future of Golf Retail


In speaking about the future of golf retail it is important to designate short and long term plans. In attempting to analyze golf shop retail at the green grass level there has never been a cookie cutter formula, but there are trends in the market place that all facilities from elite clubs and resorts to municipals should be considering and everyone who runs a golf business has been told quite a bit lately that they should have a plan going forward that better markets your brand and enhances the golf experience.

Trend 1 – Cater to the Affluent. 

When one talks about retail it is usually segregated to high-end or mass market – pricey or price driven. However it is the well-to-do who are carrying the day especially when it comes to retail and anything involving expendable income. While the unemployed have more time to tee it up they don’t have the capital and the debate about the vanishing middle class is not as important to the golf industry as the fact that the more affluent are driving the economic recovery.

According to Nelson D. Schwatrz’s article in the New York Times - “The Middle Class is Steadily Eroding. Just ask the Business World.” 

In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995, the researchers found. Even more striking, the current recovery has been driven almost entirely by the upper crust. Since 2009, the year the recession ended, inflation-adjusted spending by this top echelon has risen 17 percent, compared with just 1 percent among the bottom 95 percent.

In Manhattan, upscale Barney’s is replacing discount Loehmann’s. Capital Grille is thriving, Olive Garden is struggling.

Trent 2 – Rethink with the Young in Mind

Today's millenials - nearly 80 million individuals in the U.S. alone - represent a staggering force in today's marketplace, spending roughly $600 billion each year. And their impact is only expected to grow through 2020, with estimates their total spending in the U.S. will top out at nearly $1.4 trillion annually. Despite this, most retailers today are millennial-challenged, largely due to their traditional focus and reliance on the spending power of Baby Boomers.

This is the first paragraph of an article by Venkatesh Bal in "Top News" entitled "How even the stodgiest retailer can win over millenials." Mr. Bala is the chief economist and director of the Economic Center of Excellence of the Cambridge Group.

Trend 3 - Customization and Personalization

Cotton Timberlake in an article in the San Francisco Chronicle "Retailers cater to customization craze" states:

There is a new kind of importance placed on self-expression and on items that are made just to be identified with an owner," said Robert Burke, who runs a namesake luxury consulting firm in New York. "It is very popular currently, and will probably have long staying power. 

Personalized merchandise is proliferating as the likes of Nordstrom, Williams-Sonoma and Burberry Group try to differentiate themselves - and persuade discount-addicted shoppers to pay full price. By allowing customers to monogram merchandise and "build" garments from a range of styles and colors, stores are catering to shoppers' yen to put an individual stamp on what they wear and put in their homes.

So the sum of the important trends say we need to cater to the affluent, the young and fit with customized product. Sound familiar? Sound like a golf formula? Does this sould like part of the marketing plan you have been formulating? Golf at all levels has always relied on customization at retail, starting with logoed apparel and accessories and more recently with personalized golf balls serviced by the golf staff with Custom Ball Programs. Golf lessons and club-fitting are a customization that is unique to the industry and should be enhanced whenever and however possible. All research I've done on the future of retail asumes two factors however that aren't now part of most pro shop retail - an extension of selection to members/regulars via e-commerce and digital merchandising. One of the best ways to sell a brand story including your own is to digitally market in the shop with videos on flat screen, be it TV near the register or in a sitting area or digital frame per display that tell that table or wall's brand story. This, by definition, is customized merchandising per facility and truly is assumed by retail experts discussing retail space in the future.

In last June's issue of "The Atlantic" Derek Thompson's article "Death of the Salesman" discusses the decline of big box retail and department stores such as Sears and J.C. Penny, two stores who have always targeted the middle class, as well as the decline in the retail job market in general. He makes the point that "More Americans work in retail sales than in any other occupation but these jobs are threatened by technology." Also, "Twenty years ago the shoppers went to the stores. Today the stores go to the shopper. Increasingly there seems to be two kinds of stores - those in a race to the price bottom and those closely guarding the patina of a shopping experience."

The article only alludes to Arthur Miller's award winning play by its use of title. It never mentions Willy Loman and the death of the American Dream as seen through Willy's dysfunctional existence. It does hoever leave us with this thought, "Cheap prices and cheap workers - that is our vicious cycle and the ultimate American shopping bargain. We are getting exactly what we pay for." This is a statement on the disintegratin of the service at most large retail entities and should be seen as an opportunity for golf shops to differentiate themselves.

Online sales complement brick & mortar retail, Harry Rosen CEO says

Golf Shop retail is normally the first and last chapter of an amazing event - a round of golf. As such we are already "those guarding the patina of an experience. "While many of the brick and mortar stores discount their way into oblivion there is obviously an opportunity to establish a new shopping platform playing on the strength of the relationship to the game as well as the club or facility while incorporating technology into the equation as an extension of the shop and its image. I speak often in this space about upgrading retail salesmanship through training and enhancing the ambiance of the environment with smart buying and smarter merchandising.The time has come to extend the shopping beyond the walls of the shop and inspire members/regulars to also shop a myriad of good that are not typically available and that are, in some cases, customizable or can be personalized. The only way to provide this opportunity to your customers is to e-commerce to your facility. The affluent and the young are increasingly gravitating to retailers and products that make the shopping experience just that, an experience. 

The retail in your future plans needs to be focused as much on this aspect of your faciltity's marketing as it is on the enhancement of the golf experience. Video and digital merchandising providing product knowledge and brand messaging is being developed by both third party providers as well as high profile golf vendors. E-Commerce solutions are also an imminent part of all retail and will be provided to the golf industry in the not too distant future. Both of these potential opportunities can be viewed as long term plans but the commitment to differentiate golf retail, with exemplary service cultures and customer friendly environments shuld be a short term goal ASAP.

1 comment: