Nike learned a lesson in the 14 years it sold golf equipment that took me 30 years to figure out: You can’t buy a golf game with a new driver or set of irons.
Nike is out of golf. Sort of.
In August, Nike announced it would exit the golf equipment business and stop selling clubs and balls—and golf bags, for that matter. Inevitably, the news was followed by the latest round of consumer and business page features carrying on about how/why the game is broken. (I suppose they needed a break from reminding us about Clinton being an untrustworthy liar and Trump a dangerous narcissist.)
Related stories pointed out that Adidas is still looking for a buyer for its TaylorMade and Adams lines of golf equipment. It wants out of the business, too.
But wait—in a business strategy taken straight from the Fernando Lamas playbook, suggesting it is better to look good than to play good, both Nike and Adidas said they intend to remain players in the market for golf shoes and apparel. Maybe golf isn’t so broken after all?
You can bet Nike will stay in the game with some sort of a splash. Tiger Woods’ golf future remains in doubt, and Rory McIlroy is a star, but not in Tiger’s league. So the company may be in a bit of a quandary. Might there be a line of “Links Jordans” in the wings? After all, Michael plays more golf than basketball these days.
Separate from the reality that there are fewer golf courses, fewer players, and fewer buyers of golf equipment, what are we to make of Nike’s exit from the business?
First of all, it has less to do with the state of the game than it does the equipment itself. Nike never was to golf what it is to basketball, and it never had a meaningful market-share position in the golf equipment category. Its clubs and balls never gained a lot of traction with everyday players, Tiger and Rory notwithstanding. In today’s golf market, this is not a winning proposition.
More importantly, Nike learned a lesson in the 14 years it sold golf equipment that took me 30 years to figure out: You can’t buy a golf game with a new driver or set of irons. Or put more succinctly, it’s the Indian, not the arrow, and most mid- to high-handicap golfers (the majority of the market) have learned this lesson, too.
Golf equipment manufacturers over the years have been about the best in the business at creating demand on the (mostly unfulfilled) promise of better technology translating to better golf. Did I need a driver that can adjust the loft and the angle of the head? And where did I put the tool that does that, anyway? Why didn’t that new putter cure the yips?
Wasn’t that new wedge going to eliminate hitting the ball in the forehead? Jeez.
The leap in performance from persimmon to metal woods was dramatic, as was the advance in ball technology. The introduction of hybrids was a game-changer, too. More recently, however, it appears that golfers are more likely to replace equipment on an as-needed (vs. a gotta-have) basis.
We have fewer golf clubs/courses today than just a few years ago; however, the remaining inventory is stronger and healthier for having endured the shakeout. The same will be true with Nike’s exit from the golf equipment business, with Callaway a likely beneficiary. Time will tell.
What’s certain is that the game will survive one less manufacturer of golf equipment. Odds are also pretty good you’ll soon see a lot more Nike clubs at 2nd Swing Golf.