Good News Continues in Equipment…Apparel Still Lags

At the risk of “jinxing” the momentum in golf equipment sales, I’m happy to report that May was another very positive month for the US market. Golf Datatech’s latest US Retail sell thru for the month of May indicates continued strong sales gains in most equipment product categories for the fifth consecutive month.  Consumables/Light Durables were up 6% and Golf Clubs gained by double digits vs. same period year ago.  Stimulated by a robust US economy, strong asset positions due to stock market gains and improved housing prices, and more dollars in the every day American’s pockets due to a reduced tax burden, purchases of golf equipment was up sharply.  Add in the first decent month of weather nationally in May, and in total the golf equipment business is in a good place heading into the summer months.

Unfortunately golf apparel is not faring as well.  YTD Green Grass sales are down over 7% while the Off Course Specialty channel (by far the smaller of the two) is up nearly 5%.  Some of the On Course deficit is likely a result of very poor weather across much of the country in 2018, which has negatively impacted rounds played as well as apparel sales.

Equipment

While unit sales have not fully rebounded in all equipment categories, they’re up in seven of the ten segments we track in hard goods (balls, gloves, shoes, bags, drivers, fairways, hybrids, irons, wedges, putters).  The largest increase has been in wedges, a category with significant new product introductions and substantial positive momentum that is up over 20% for the first five months of 2018.

Iron sales are also up sharply, with Average Selling Prices soaring and at all time highs, while increases in driver pricing are moderating after several months of rapid growth.  It wasn’t that long ago (October of 2014) that ASP’s on drivers were in the $220 range, while today the average is nearly $360.  The only club category continuing to  struggle remains putters, which continue to see shrinking unit sales while ASP’s creep higher.

After struggling for several months due to less than ideal weather, ball sales finally rebounded in May and in total the category is growing marginally in units while ASP’s have stagnated.

Golf Apparel

Combined On/Off Course sales in golf apparel continues to trend lower in dollars, however the pace of the decline continues to lessen.  After a horrific start to the year due to severe weather (down 11% in January), total sales in golf apparel were only down 3% for the month of May, suggesting the category is moving closer to equilibrium, but the early season hole remains.

The one recent bright spot is men’s shirts, which represents the largest single sub category of golf apparel, and which have creeped back up level with YAG in May.  Generally speaking, as men’s golf shifts goes…so goes total golf apparel.  However, the only sub category that appears to have heavy inventory is Men’s Shirts, which might suggest heavy discounting could be lurking around the corner if sales for June do not turn positive in a big way.

 

Custom Fitting Evolution, 2018

On June 1, 2018 Golf Datatech released its newest consumer study, titled the Evolution of Custom Fitting Golf Equipment in the United States, Consumer Attitudes and Experiences.  The following are a few personal observations as well as highlights from the study, which is the only ongoing analysis of this means of selling golf clubs in the US.  The first investigation of the Custom Fitting business was done by Golf Datatech in 2001, and a LOT has chanced since.

There is no doubt that custom fitting of golf clubs has become widespread, particularly among private club players and those with significant assets/household income.  However, while the majority of Serious Golfers have been custom fit at some point in their golfing lives for clubs, about 1/3 have never done so, and the data suggests most of this group probably will never cross over to being fit, because they don’t believe fitting will improve their game enough to justify the costs involved.  And while many golfers get fit without any extra costs at their local Off Course shop or thru their golf professional, the costs of being fit at Custom Fitting Specialists (which is the fastest growing sub segment) is frequently substantially higher, frequently over $100/session.

During the weeks prior to completing the analysis and write-up I went to several Custom Fitting Specialists as well as traditional Off Course Specialty Stores for individual driver fittings.  I paid full price for fittings and none of the Fitters were aware I was doing research on the fitting.  Immersing myself in the fitting process allowed me to better understand how consumers view being fit, and ultimately led to a much more informed and insightful analysis of the category.

As someone who has been in the golf industry for 33+ years, with many of my early years spent in club design, marketing, and development, I’ve been witness to the evolution of fitting.  And it certainly has changed.  What was once a category owned by Ping in the 1980’s with their bright yellow full-page ads for static fitting in Golf Digest or Golf Magazine, has now evolved into a high-tech world of data driven instant feedback utilizing clubs that can be adjusted and modified on the spot.

However, even with all the high-tech equipment and technology built into the fitting process, the Fitter themselves are still the key to the final outcome.  Fitting golf clubs remains more of an art than a science, and the skill level of the fitter is critical to not only getting a proper fit, but also for controlling the direction of the session.  My experiences in fitting varied widely, from highly technical and data driven to loosely constructed sessions where I directed the brands and models I was interested in.   But in every case the “numbers” associated with the new product that was recommended were superior to my current “gamer” driver, improving the launch angle and reducing backspin closer to my ideal to maximize distance and minimize off target hits.

Custom fitting does work. When properly fit by an experienced fitter, it improves most players ability to strike the ball more consistently, which usually results in more distance and better control.

The real question golfers have to answer prior to being fit, is just how important is it to absolutely optimize their potential, and how much are they willing to pay?  There are several unique shafts in the marketplace that may work for an individual golfers swing, some of them significantly more costly than the ones offered by OEM’s in their stock clubs, some at the same price as stock. However the process of sifting and separating the wheat from the chaff requires time, a lot of swings, and the willingness to seek out the best possible fit.

For more information on the results of the Study please visit the Golf Datatech website by clicking on the link below.

Press Release on Custom Fitting 2018

To discuss pricing or purchase the full report from Golf Datatech, please email info@golfdatatech.com

 

 

April Key Data-Rounds Played, Equipment & Apparel

It’s been a busy few weeks at Golf Datatech US, with the release of the April Retail Sell thru data, April Rounds Played, and the 2018 Evolution of Custom Fitting study, the 7th edition (going back to 2001) which tracks attitudes and opinions of the custom fitting process by nearly 1,700 Serious Golfers.

Some of the Rounds Played/Retail Sell Thru highlights (or lowlights depending upon your perspective) are as follows:

Rounds Played

One of the key metrics in golf, rounds played are the engine that makes all others go.  Long term if you don’t have rounds, you don’t need golf equipment or golf apparel, so this critical measure looks at the foundation of the business.

And unfortunately, April rounds played (down 13.5%) were a bit of disaster, negatively impacted by poor weather, particularly heavy precipitation and very cold weather in northern markets during the month.  YTD the Southeast continues to struggle after a dismal Q1, fighting thru cold and wet weather.

YTD April Retail Sell Thru Data-Golf Equipment and Apparel

With four months in the books, retail sales of golf equipment remained healthy thru April even with some significant headwinds due to weather which have dampened rounds played…but not equipment sales.  On the other hand, apparel has not fared as well as equipment and is lagging vs. 2017.

Equipment

Consumables (Balls & Gloves):  Down 1.8% YTD in total dollars, likely negatively impacted by the poor weather situation which continued, particularly in the Southeastern US.

Light Durables (Bags & Footwear): Up 6.6% YTD, led by footwear which enjoyed a very good start to 2018.

Clubs:  Up 12.9% YTD, led by wedges, with irons and woods up the most while putter sales remain flat. Clearly the weather has not negatively impacted club sales, with sharp sales increases in both the On and Off Course channels.

Apparel

Total golf apparel sales are down over 5% YTD, primarily impacted by weak Green Grass sales due to the aforementioned weather issues.

No single product category grew thru April 2018, however the two which got closest to breakeven were outerwear and men’s tops, both of which tend to sell more when the weather is poor.

The Off Course Specialty channel, which is the smaller of the two channels had marginal growth while the Green Grass was down significantly.

Bottoms which are primarily shorts and skirts were substantially down in the Green Grass (20%).

 

 

2018’s Hot & Cold Start-Q1 Golf Roundup

With the First Quarter of 2018 equipment and apparel sales data released over the past few weeks and Rounds Played coming out late last week, it’s time to take stock of where the Golf Industry stands.  

Looking at the big picture, rounds played have been hampered by cold and rain (and unfortunately anecdotal evidence suggests April won’t be much better), however new product offerings have generated substantially improved consumer demand, driving club and shoe sales substantially higher.  Golf Apparel, which has been the shining star in golf products for the past 7 years is off to a slow start in 2018, with weather issues hitting a lot of warm weather golf courses and resorts.  

Rounds Played

Rounds during the month of March fell by 3.8% and remained down 5.6% Year to Date.  Poor weather across the southeastern US has been the primary culprit with cold temps and higher precipitation creating a negative environment for golf.  Rounds in the South Atlantic are down 10.5% and 15.2% in the South Central, two regions that typically represent a disproportionate percentage of rounds early in the year. 

And while the northern tier doesn’t typically play a lot of golf in the winter months, normally some diehards are on the links, particularly by March, however a late spring has slowed those markets to a crawl and they’re all down substantially.

Retail Sell Thru YTD Thru Q1-Golf Equipment

Consumables/Light Durables

Consumables (Balls & Gloves)

Negatively impacted by the weather situation, both golf ball and golf glove sales were down low single digits vs. Year Ago in units and dollars.

Light Durables (Bags & Shoes)

The Golf Shoe category was up sharply in both units and dollars the end of Q1, improving by double digits, while the bag business was level in units and up 4% in value.

Total Consumables/Light Durables:  +3% vs. Q1 2018.

Golf Clubs

Woods

Driver, Fairway and Hybrid ASP’s were all up significantly thru the first quarter of 2018, and even though units were slightly lower than year ago, the total value of woods improved by 7%.  After a very slow start due to changes in launch strategy/timing by some of the larger Brands, the wood category flourished in March and is expected to continue to be strong throughout the first half of the year.

Irons

Iron sales surged in Q1, increasing by 5% in units and 17% in dollars, a substantial increase in value sales in both the Green Grass (+36%) and the Off Course Specialty channels (+15%).  Pent up demand, a significant increase in Custom Fitting (which also increases the per stick ASP), and some exciting new products have driven demand for irons.  And unlike woods, units (sticks) within the iron category were also up for the quarter, suggesting a strong under lying foundation to iron sales early in 2018.  

Wedges

Wedge sales in dollars were up 29% thru the end of the first quarter, while units were up 31%, and ASP’s were slightly lower.  New product launches in March and lower prices on second generation product helped buoy the market early in Q1, longer term success will ride on the back of continued sell thru of premium priced wedges.  

Putters

The putter category is the “odd man out” thus far re: growth in 2018 among the various club products, with units up 2% and dollars flat.  In several recent years, any category that was “treading water” and not declining would have been considered a top performer, not so this year.  It’s worth noting however than new Scotty Cameron/Titleist putters were not available for sale until the very last day of the month, so it would not be a surprise to see a significant pop in category sales in April.

Total Golf Clubs:  +12% vs. Q1 2017

Total Golf Equipment:  +9% YTD

Retail Sell Thru YTD Thru Q1-Golf Apparel

YTD every product category of Golf Apparel is down on a YTD basis in value, and in total Golf Apparel sales fell by 6%.  The Off Course Specialty channel is performing better than the Green Grass, with the former down 1% and the latter down 8%.

Men’s Apparel

Men’s Golf Apparel sales were down 7% On Course but up 3% Off,  with all categories declining thru the Green Grass and all Specialty store product segments showing sales improvement.  

The largest category of Men’s Golf Apparel is Men’s Shirts, and those are down 6% thru Q1 On Course, but are up 2% Off Course, with ASP’s remaining relatively level thru the first quarter in each channel.

Women’s Apparel

Retail sales of Women’s Golf Apparel was down in all product segments across both channels thru the end of Q1, with Green Grass sales down 14% and the Off Course falling by 8%.  Sales declines in Women’s Golf Apparel are broadly based, however both Women’s Tops and Women’s Bottoms were off by more than 20% YTD.

Outerwear

Outerwear is a gender neutral category, and YTD sales are down 2% with the Green Grass level and the Off Course dropping by 8%, with ASP’s dripping by 2%+.

Total Golf Apparel:  Down 6% YTD

Total Golf Sales, Equipment and Apparel Combined, On/Off :   +8% YTD

 

January Results in Equipment…Take a Deep Breath

Golf Datatech recently released the January 2018 On/Off Course Specialty Retail Sales data for the equipment categories, and for some of the biggest segments it was not a pretty picture. Consumables fell 1% in dollars while Clubs were down double digits, with Drivers specifically down 35% and irons falling 15%. While that might look like a horrific start to the new year, there are several extenuating circumstances to consider before running out of the house screaming like your hair is on fire:

  1. January is the smallest month of the year for equipment sales, and thus it is the most volatile and also the easiest to recover from having a slow start.
  2. January 2018 weather was terrible for golf, and we would expect to see a sharp drop in rounds played for the month when they are released in a few days.  Rounds and sales of equipment do not always track together, however a month as poor as this January would likely dampen (pun intended) the enthusiasm of the golfer to buy new product.
  3. In January of 2017 both TaylorMade and Callaway new club launches were already available and selling in the market, while in 2018 both did not hit the market with new models until the month of February, so the comparison’s of one January to the other is without the new product from two of the largest club brands.

So while we never want to get off to a slow start, there is no reason of panic…February and March data will provide significantly better insights into where the year is headed.

The “Amazonization” of Golf, Part III, Golf Equipment

In Part I we explored a general overview of how Amazon is impacting golf retail, in Part II we dug deeper into how Amazon is impacting the sale of golf apparel, and in Part III we analyze some of Amazon’s effect on golf equipment sales.

For the sake of this discussion we define “Golf Equipment” as balls, gloves, bags, shoes, woods, irons, wedges and putters, and further segment them into Consumables/Light Durables (balls, gloves, bags and shoes) and Durables (all club categories).  Total sales of Equipment thru the On/Off Course channels for 2017 totaled $2.35 billion, with Consumables/Light Durables accounting for roughly 45% of sales and clubs the rest.

Because their purchase cycles and usage habits are not alike, Consumables/Light Durables and Clubs track on substantially different paths.  Typically, consumption of balls and gloves are more influenced by frequency of play, because gloves wear out with use and balls get scuffed/dinged up, or more likely, lost or drowned.  Light Durables like bags and shoes have longer purchase cycles than balls or gloves, but due to the nature of their typical components and materials, they also wear out and need to be replaced more frequently than clubs.  Golf clubs rarely “wear out” (wedge grooves perhaps the exception to that rule), instead they are taken out of play most often when their owner is enticed to put aside their old “gamers” for a new shiny object, that promises the hope of improved play.

Defining the differences in the two categories is particularly relevant when discussing Amazon, because purchasing behaviors on the platform are vastly different by product category.  Golfers buying from Amazon are much more likely to purchase consumable golf products than golf clubs, primarily due to the convenience.  Push a button, and within hours or days (depending upon the delivery method selected) the balls or gloves of your choice show up on your doorstep, no muss, no fuss.  Enough “ammo” to last weeks…or months, depending upon how much the golfer is willing to stock up.  Since ball and glove models do not change often, and golfers tend to use and purchase them according to how frequently they play, buying multiples online for convenience is consistent with similar behavior inside a Brick and Mortar Off Course Specialty Store or Sporting Goods location.  However, when buying online thru Amazon or any other Online seller, the buyer never has to leave their chair or office.  In the Green Grass channel, where balls are more often bought in three-ball sleeves, the pricing is much higher and “need” (often necessary to play the round) is frequently the impetus behind buying, thus the impact of online competition is far less.

In today’s world, premium golf clubs aren’t a particularly good fit for the Amazon business model, at least in its present form.  Because high-end golf club models change frequently, clubs are often custom fit, and golfers like to try them in person prior to purchase, the Amazon experience isn’t ideal.  No online merchant or OEM has yet to develop an adequate online fitting tool or app for golf clubs.  This isn’t to say that one could not be developed and become popular, however at present the technology and user interfaces are not easy to use, accurate, and preferable to in person interaction.

Given that premium priced clubs are typically sold for the same price online as in Brick and Mortar stores, there’s less incentive to purchase golf clubs online, and even less of a reason to consider doing so from Amazon vs. other retail options.  Amazon is perceived as a large general merchandise marketplace lacking in golf expertise, which is important when buying clubs, meaning the site isn’t perceived as a place where golfers go to buy top of the line clubs, at least thus far.

While the Amazon Impact Study helped clarify attitudes and opinions around Consumables (Amazon is a good match) and Clubs (Amazon is a poor match for premium priced product), Lightweight Durables were in the middle…sometimes good, sometimes bad.  Like almost any footwear sold online, Amazon is a good place for golfers to buy golf shoes, however  golf bags have been less than a perfect fit so far, though a significant percentage of respondents to the study indicated they’re interested in buying bags from Amazon at some point in the future.

Details about purchasing the full Amazon Impact study are available from Golf Datatech at info@golfdatatech.com.

 

 

The “Amazonization” of Golf, Part II: Golf Apparel

In Part I we explored a general overview of how Amazon is impacting golf retail, in Part II we dig deeper into how Amazon is impacting the sale of golf apparel, and in Part III (coming soon), we will analyze Amazon and golf equipment.  

Golf Apparel is a difficult product to easily define and measure, because a polo shirt sold at Target, Nordstrom’s or PGATSS could all be worn to play golf.  Or to the office.  Or to mow the lawn.  Where the product is sold is as important as what the product is when defining “golf” apparel.  There are many brands that specifically focus on golf apparel, and in the process use design and/or material differences to create products that work best for golf, however in reality that same product could have multiple uses, and once it leaves the shop, store, or warehouse no one knows what it will be used for.  Whereas in golf equipment, there aren’t a lot of alternate uses for that new driver you just bought…it’s pretty much going to be used to play golf, or be made into the worlds most expensive tomato stake.

For the sake of our discussion, we are assuming “golf apparel” consists of clothing designed and sold primarily to be used for playing the game, and most frequently sold by those that focus on golf.  However, that is clearly not a hard and fast definition, as the page below demonstrates…Amazon is a major factor in golf apparel, and golf is but a tiny fraction of their total sales.  And for context, according to many experts that track general retail sales in America, Amazon passed Macy’s to become America’s largest apparel seller in 2016, and without a doubt it has only increased their leadership position since.

How Amazon Sells its Own Product…First

Screen Shot 2018-02-11 at 8.54.31 AM

On a recent day I went to the Amazon website and entered “Golf Apparel” in the search box, and what you see above was how the site delivered possible matches to my inquiry.  It will  surprise no one that works with or follows Amazon that the first product delivered to was their own “Essentials” line, at extremely competitive pricing. In 2016 Amazon made a significant investment in broadly expanding their private label business in several product categories, and the Essentials line is a representation of how they compete in golf apparel.

It’s no surprise that Amazon’s highly proprietary and closely held search engine (known as A9) placed its own product first, followed by other brands determined via algorithm, which no one outside of Amazon comprehends.  There are hundreds of online articles and consultants hoping to guide individual brands thru the steps toward improving their standing inside Amazon searches, so this post will let those experts take the lead, and instead we’ll focus on the bigger picture of perceptions of Amazon and golf apparel.

Macro Level Golf Apparel

Golf Datatech estimates the On/Off Course channels sold over $1.1 billion in golf apparel in 2017, an increase of nearly 6% vs. 2016.  Of that, well over 3/4 of those sales are made in a Green Grass golf shop.

Prior consumer research by Golf Datatech suggests over one half of all golf shirts being worn today feature a golf club/course logo, making a large part of the golf apparel market impregnable to anything Amazon can do to make itself a viable competitor to a local golf shop.  Instead, Online sellers (including but not limited to Amazon) as well as Off Course Specialty stores, are left to battle for more basic apparel items that do not have logos, and are often entrenched in a price battle.  And pricing is an area where Amazon often, but not always, has a step up over the competition.

Buying Golf Apparel From Amazon

In “The Amazon Effect” we specifically probed consumers about what products they have purchased from Amazon in the past, as well as those they are likely to buy in the future, and Golf Shirts topped the future list, along with Shorts/Skorts, Jackets, Rainwear and Sweaters all among the top 10 products in golf.  While most golfers likely won’t buy all their golf apparel thru Amazon, they are very likely to view it as a place to buy some items, particularly those which typically don’t feature a club logo, such as bottoms.

And to keep matters in perspective, while Amazon is definitely a player in selling online golf apparel, in the big picture it still remains worth mentioning that only about 20% of total respondents to the Amazon Effect survey have ever purchased a single piece of golf apparel from the site.

Impact of Amazon Prime

Prime members are significantly more loyal to the platform, and it is no different when it comes time to purchase golf apparel.  Those who are members of Amazon Prime are far more likely to be looking toward buying golf apparel on Amazon.  Once Amazon can convince a consumer to agree to pay them to be a “member”, their loyalty to the platform increases exponentially.

Brand Strength and Product Differentiation Matters

The objective of Amazon’s search engine is simply to optimize the customer experience for the buyer while maximizing revenue per visitor for Amazon.  The opaque nature of the search engine, along with the knowledge that Amazon’s own product will likely be featured at the budget price points, makes the platform very challenging for any manufacturer attempting to sell basic golf apparel.  However, if the manufacturer has a well-developed consumer brand, is well designed, has a technology story or material difference built into their product, they stand a good chance to break thru and sell a lot of product on the platform.

Looking Forward

Amazon is ideally suited to sell their own “Essentials”  line of price point golf apparel, however their inability to compete with golf course logos means a significant piece of the category will never be within their reach.  Additionally, branded non-logoed golf apparel will always be available thru Amazon, either direct from the manufacturer, or thru secondary sellers, however that same product could also be purchased thru competing websites, or in person at a traditional brick and mortar retailer.

As Amazon continues to expand, grow and become even more fully integrated into the retail fabric of America, their impact on golf apparel will be substantial, however many golfers still enjoy the experience of personal engagement that only occurs in an actual retail environment, either in the Pro Shop, their nearby Golf Specialty Store, a Sporting Goods store, or a major retailer.

For anyone interested in purchasing the full “Amazon Impact” consumer report, focused specifically upon the apparel category, please email info@golfdatatech.com or click on the link below for more information and pricing.