Summing It Up
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Top New Irons in Use Top New Putters in Use Top Balls in Use Results from the Darrell Survey Winter 2005 Consumer Report. Every year Darrell Survey researchers survey recreational golfers across the country. The Consumer Report is based on direct observation of these golfers at courses nationwide. These charts show the top three models of new balls, irons and putters most frequently seen in use during the Winter 2005 season. |
The topic in the chat room for cigar aficionados eventually turned–as it inevitably must–to golf equipment. "Does anyone have a good source for new clubs?" asks "Lemon," who apparently is taken with Cleveland's Launcher and TA6 irons.
The ensuing discussion proves enlightening for club and resort pro shop operators. One by one, Lemon's cigar-smoking buddies chime in.
"I've always had luck with tgw.com," offers "ChrisG," referring to the online equivalent of Wal-Mart for golfers.
"Do you have a Golfsmith nearby?" asks "t-bone," referring to the bricks-and-mortar version of Wal-Mart for golfers. "They had the best price on the Launcher, but I bought a Taylor Made for the same $$."
Then the joker of the group–and there's one in every chat room–pipes up. "Do what I do," he says. "Get some scuba gear, go to the nicest course you can find, and check out the lakes. It'll be fairly mix-and-match, but the better the [golf club], the better the equipment. This is especially good for getting wedges and putters."
Finally, one more voice emerges from the chat room "noise."
"I would always check e-Bay first," says "esteban," who apparently enjoys cigars and guitars. "After that, there are a number of discounters." Then he has another idea: "One thing you might consider," he adds, "is if you have a friend who belongs to a club that is on the Mill River plan. This is usually the cheapest way to go on new stuff."
If You Can't Beat 'Em, Make 'Em Join
This fascinating little exchange between cigar buddies highlights the challenges that club pro shop operators now face when it comes to selling golf equipment and apparel. Aside from some impulse and emergency purchases–from the guys who throw their putters in the lake after missing a three-footer, for example–it can be awfully hard, in the Internet and Big Box Age, for your shop to compete with the Golfsmiths, Golf Warehouses, e-Bays and countless other Web and strip-center golf merchants that keep popping up like spring dandelions.
The big discounters not only have a decided advantage in terms of selection and assortment, they can often also beat pro shops on price, because they're able (or at least willing) to live with a smaller margin. While you certainly don't want your members buying gear for all their buddies on your Mill River Discount Program–through which clubs charge members $100 or more for the privilege of buying equipment at 10%-20% over cost–these types of buying programs can offer clubs a way to compete with larger, better-capitalized discounters.
"I wouldn't want to offer it if I didn't have a lot of outside outings where I could charge full retail," says Bob Feller, head golf pro at Reedsburg Country Club in Reedsburg, Wis., about his participation in the Mill River plan. Reedsburg charges members $140 for the plan, but throws unlimited practice range balls into the deal.
An unofficial survey of club Web sites confirms that a number of shops offering Mill River (or other plans) usually set the price at or around $140 without the practice ball incentive. Some offer lower introductory rates, or include it as an incentive for full club memberships. However it's structured, priced and offered, it's always "a very good value for members," Feller says.
About 130 of Reedsburg's 300 members participate in the club's optional Mill River plan, which allows them to buy equipment at 10% over cost. Reedsburg's typical equipment markups are in the 25% range, while soft goods margins are 50% to 60%.
Mill River is also optional at the Athens Country Club in Athens, Oh.–much to the chagrin of golf pro Scott Varrows, who says that just 30 of his club's 180 golfing members currently participate in the plan. "The people who do [participate] are loyal, but they're pretty much the only ones that buy anything," Varrows adds.
"We Won't Be Undersold!"
Offering programs like Mill River can be a great "equalizer" for pro shops looking to compete more effectively with discounters and Internet golf retailers. But there are some other simple ways to pretty much accomplish the same goal.
"We have a big discounter called Golf Galaxy in Minneapolis, and we price our hard goods off of them, so our members don't have to drive 50 miles to get their equipment," says Mike Zinni, golf pro at Mankato Golf Club in Mankato, Minn. In addition, Zinni says, a number of manufacturers have instituted policies that restrict retail margins. "That helps create parity, too," he notes.
Brian Stange keeps it even simpler. "I tell customers I can't carry as much as the golf discounters, so go there, try the equipment and find what you like, and I'll beat that price," says Stange, golf pro at Ann Arbor Golf & Outing Club in Ann Arbor, Mich. "I get the Edwin Watts catalog and I generally beat them. That's a benchmark price." Stange promotes the "we won't be undersold" policy mainly by word of mouth, but also uses a monthly mailer that goes out to the club's 300 members.
One method Stange won't use to stimulate pro shop revenues is the sale. He maintains his pricing year-round, with one exception. "I don't want to 'train' customers to only buy during a sale period," he says. "The one time I do a sale is at Christmas. Otherwise, people will just buy when you're having a sale."
Club pro shop managers also have to develop good retail sensibilities about the products that will be perceived as offering the best value. For example, price is a big reason why several pros say that Cobra clubs are selling well this spring. "They are the top seller on our Mill River plan," says Bob Feller of Reedsburg CC. "They're at a good price point."
Don't forget, though, that perceptions of quality will also command a price. That's why Ping g2s, which retail for 25% to 50% more, are also still moving briskly. &qu
ot;I sold six sets already this spring," Feller says. "Ping is the hot iron for me right now." Feller says he is also still doing well with the new Odyssey putters.
Taking Advantage of What's "In Store"
Beyond pricing tactics, club pro shop managers are finding that they need to sharpen their merchandising skills to make sales sizzle. One big advantage that pro shops have vs. Web and discount options is that they can make it much easier for golfers to touch and feel all the wares in a more comfortable and exclusive shopping environment. This not only gives clubs a decided edge for planned and needed purchases, it can greatly enhance the chances of capturing impulse sales, especially for members and guests who are just coming off or going onto the course and are charged up about the game.
Here are some of the merchandising tactics that club pros are relying on as they gear up for this year's peak selling season:
• Grab their attention. Scott Varrows at Athens CC likes to catch customers' eyes as soon as they come step into the shop, so he's stocking a new line of Chiliwear golf clothing featuring Tabasco bottles, chili peppers and other "spicy" designs. "It livens up the shop," he says. "I like to stir up interest by displaying something different."
• Follow fashion. When Tiger Woods started showing up at tournaments in short-sleeve mock turtlenecks, an instant golf fashion trend was born. Brian Stange of Ann Arbor Golf & Outing Club has stocked up on the newest mock Ts for the summer. "Whatever they see Tiger wear on TV is what people will want," he says.
• Don't forget your lady shoppers. Other golf pros say there is money to be made by indulging the fashion sensitivities of female players. Mike Zinni of Mankato GC says he came back from the PGA merchandise show in January enthusiastic about the new line of ladies golf bags from Hot-Z, which feature colorful but classy designs (with names like "Katie," "Nicole," and "Abigail") and matching accessories like shoe bags, totes and purses.
• Keep it fresh. Knowing that members don't want to see the same things year after year, Zinni is always on the lookout for new lines he hasn't carried before, and says he likes to completely revamp his shop's product mix every three years or so. And he changes up merchandising much more frequently. "I constantly change our displays–sometimes weekly, but twice a month at minimum," he says. With a 1,000-sq. ft. pro shop, he can move displays around frequently and experiment with secondary product placements, without worrying that customers won't be able to find what they want.
• Track the trends. Golf equipment is becoming increasingly specialized–and that goes for just about everything, from clubs to clothes. Varrows at Athens CC has plenty of company among his golf pro brethren when he says that hybrid clubs and higher-loft irons and woods are the hot sellers right now. "People are finally starting to realize that they can be much more successful getting the ball in the air with a higher loft driver," he reports. Equipment innovation is especially hot and heavy in wedges and putters, and as a result, pro shops and other retailers appear to have the upper hand in terms of pricing power. According to figures from Golf Datatech LLC that were included in a recent Wall Street Journal report (see table), the average price per club for wedges and putters has grown substantially over the past three years–while the average price per iron or wood has dropped.
• Know customers' needs. There are also plenty of new opportunities in specialized apparel, including gear that allows golfers to play in virtually any kind of weather, or is tailored to the needs of specific demographic groups. For example, Jay Sigel, a top amateur player who has won eight times on the PGA Champions Tour, helped design (and is now pitching) a new line of golf gloves designed specifically for seniors. Made by Valley Forge Golf Gloves, the gloves feature special sizing, a new thumb seam, and a shock absorption design that uses an elastic polymer at two critical points near the wrist to reduce the force of impact. With Baby Boomers starting to hit the links in record numbers–seniors aged 50 and up account for one-third of all golfers and are the fastest-growing segment of players, according to the AARP–opportunities like these should not be ignored.
• Know when (and how) to fold 'em. Not every line that looked like a "gimme" last winter is going to fly off the shelves this summer. So how clubs handle the merchandise that doesn't work out can go a long way toward determining the health of their pro shops' bottom line. Clearance racks, staff discounts and special sales are the "old standbys" when it comes to jettisoning slow-moving inventory, but with a little creativity–and an account on eBay or one of the other online auction sites–you may be able to salvage more sales dollars from these items. "I'll put some merchandise on Golf Club Exchange (www.golfclubexchange.com) from time to time to test out the market for certain items," says Feller at Reedsburg CC. "If I can't get the Mill River price (10% over cost) on there, I know I'm in pretty bad shape." C&RB
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