The interview had gone well, and I was seeing plenty of nodding heads around the table as I presented my vision for golf retail to the board of the biggest golf retailer in Australia. Then came the question

“So, how big do you think the market is in Australia?”

Reflecting on how many courses there were around the country and the retail footprint across the states, I did a quick calculation in my head.

“Somewhere around $350-400m would be my best guess.”

“Most people think it is that or higher, but it isn’t even close. We are nearly half the market, and $100m is still a way off in the future.”

I had recently come out of a buying role in a supermarket chain where sales of bottled water exceeded the entire golf retail sector in Australia. This was going to be a change in mindset, but as a golf nerd who loved hearing about all of the intricate details of products, if they offered me the role, I was taking it.

In what I thought was another test, due to time zone differences, my interview was on the Monday morning of the Masters tournament of 2015 — the historic win by Jordan Spieth. Despite the significance, the win would not have been mentioned at all apart from my small talk on the way into the room.

At the time I thought this may have been a power move, but in reality, this was an example of the focus of what was going to move the needle for the stores. To see a blip on the sales radar in Australia, it either had to be an Australian, or Tiger. Preferably Tiger… Nobody else had the ability to affect sales.  As a passionate golf fan, this was tough to stomach, but soon enough, commercial reality washed over me too. Golf was important, and our reason for being there, but sales was the final consideration.

With commercial realities setting in, it was eye-opening to see the incredibly slow turnover of sales for many item categories in the store. Having spent several days out in stores, it became clear that stores in winter would often struggle to get double digits of people through the doors each day! With that turnover, every possible profit dollar per customer is golden.

This means that deep discounts, loss leaders, premium Titleist balls and other price-based retail incentives are difficult to sell to franchisees as this reduces the margin of each individual sale as it walks out the door. With so few sales coming in, the conversation around investing in one customer to bring in the next becomes far more difficult. In the heady days of Tiger 1.0, people were lining up at opening to pay full price for anything. Biggest Big Berthas were selling for $1,000 AUD and growth was basically assured. The landscape in 2015-16 was quite different.

All of this contributed to my attitude in product meetings moving from the ‘kid in the candy store’ to ‘can we get this exclusively, and please make sure we get enough 10.5-degree regular flex drivers this time!’. Unfortunately, the stiff flex blades (which I coveted personally), would go into stores and gather dust for much longer than the game improvement 5-PW sets, so that is where the stock orders went.

Another symptom of the golf industry with such a short list of significant OEMs is the power they hold. Fortunately, this cuts both ways in Australia, with the ability to focus on a given brand for a promotional period, maintaining some power for the retailer.

An interesting anecdote within the golf industry is the limited amount of rounds people actually play. Lack of rounds played is a serious problem for the industry, but it is a symptom they perpetuate themselves! It is very hard to engage with and excite customers when you aren’t personally experiencing the products you are selling!
So what is happening in Australia to get everyone back into the stores?

In a word, simulators. With the conservative leaders of the business being appropriately tentative around such serious investment for stores, it took a journey to the U.S. and UK to visit other simulator installations to make the decision a very easy one. Witnessing non-golfers participating and loving the simulator experience, it highlighted an opportunity to bring in new customers to the store with completely new revenue streams that hadn’t otherwise been squeezed dry. The time commitment of a session in the simulators is much smaller and more flexible than a full outdoor 18 holes, so the disappearance of golfers who went missing in their late 20s to early 40s suddenly reopened. With a third of the store network having taken up the investment, it appears as though the early signs were correct.

Outside of simulators, it is hard to identify innovation in the way that consumers engage with golf retail and vice versa. Trade in incentives, social media prizes, and the usual promotional cycle of Masters week and Christmas catalogs are still in favor, and from the outside, there doesn’t seem to be the desire to change and innovate. With sales and competitors progressively heading online, the market and engagement with customers are trending more toward digital all the time. While Tiger’s resurgence will absolutely be positive for the industry, I hope there are other things in place to make it sustainable beyond the end of his second dynasty…

What now?

Similar to the US, the market in Australia is shrinking. Fewer rounds are being played each year, and people find it harder to engage with a sport that takes a long time to play, with a comparatively high cost. These things mean that the industry needs to re-engage with the players it still has, on top of getting new ones in a very competitive landscape.

Engagement these days means clicks and follows online, but there has to be a conversion into sales for this to have any meaning at all. I would like to see a more aggressive digital engagement strategy with golfers which encourages them to play — and to do it with new equipment. As it stands, there seems to be an expectation from retailers for suppliers to do the heavy lifting with marketing and engagement, and an expectation from the suppliers that the retailers will automatically benefit from their marketing dollars. With embargos on the biggest and best product launches reducing the ability to have an optimized end to end delivery of a new product to market, the industry lets plenty of opportunities not reach their potential.

On a scale of 2000 Tiger to 2019 Tiger, I would suggest that the industry itself is “stuck in between release patterns” but could be ready to “activate the glutes” into the next season. Momentum is building, and it does feel like the base is much broader and more solid than the last time the industry leaned heavily on Tiger for growth.