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 1

The following are some thoughts on how Amazon is impacting the business of golf, most based upon results from “The Amazon Impact”, a study of how Serious Golfers view the #1 Online Retailer in America, conducted by Golf Datatech and released early in 2018.  Part I is a big picture view of Amazon’s impact, while Part II and Part III will be released in the upcoming weeks and address specific product categories like Golf Apparel and Golf Equipment.

Few topics create more passionate discourse in the golf business than bringing up the 8,000 pound gorilla (ten times bigger than the 800 pound one) that’s in the room.

Amazon

To some Amazon is the devil.  To others a savior. To American consumers it’s a habit that would be hard to kick, if you wanted to kick it, and most do not.  Amazon is a complex layered selling machine designed to make the buying process simple and seamless to the ultimate consumer.

Point, click, and within a few hours or a few days your product of choice appears on your front doorstep, with the Amazon smiley face adorning the exterior of the package.  From the consumer’s perspective it could hardly be easier to order and receive delivery.  And Amazon is certainly not done pushing the envelope when it comes to making the purchase and delivery process as easy and timely as humanly possible.  In fact, they even forgo humans and employ automated processes whenever possible, such as robotic driven pickers in warehouses, cashier-less grocery stores, and delivery drones.  Amazon is always testing the outer limits of making the process simpler, faster, and more efficient, seemingly all the while investing in the future, eschewing short-term profits while always looking toward the far horizon.

While it’s hard to argue with all the benefits accruing to the consumer from using the Amazon platform, these improvements do not come without a cost to the broader fabric of America.  After several years of relatively unfettered expansion and upward scaling of the business, Amazon has started to receive pushback from small segments of society that are concerned over one entity having too much power.  While many doctoral thesis’ will likely be written about the impact of Amazon on society as a whole, our immediate concerns are with how it is impacting the golf business.

Amazon & Golf

First and foremost, Amazon’s model for engaging with the golfer works well, as golfers tend to be well educated with higher than average incomes, a good match for the Amazon selling platform.  Golf Datatech just completed study on the Attitudes and Usage of Amazon by Serious Golfers,  called “The Amazon Impact”, and determined that golf balls, gloves, shoes, distance devices and apparel are all well positioned to be purchased from the largest US online retailer, however those products that require engagement, interaction, trial and fitting (golf clubs in particular), are poorly suited for effective selling.  It’s not to say Amazon may not look to find ways to overcome those obstacles, they’ve certainly done it before (think Whole Foods acquisition), but at the moment the lack of personal interaction have been too significant to overcome.

And to set the record straight, while Amazon has gained significant traction over the past year in consumables and packaged golf goods, it remains but a piece of the overall marketplace, not the dominant player.  In golf balls and golf apparel the Green Grass channel is far larger than Amazon and in clubs the Off Course Specialty channel controls the bulk of the sales.

When Part II of this blog exploring Amazon and the golf business comes out, we’ll focus on Golf Apparel, followed by Part III which will address equipment in more detail.

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