Don’t panic! 2021 could still be great

I have previously said, and am pretty sure everyone would agree, 2020 was a crazy year.  We now need to have quick look at events from the worst of conditions in order to plan for what happens next.

While lockdown #1 effected the various regions differently, Golf lost nearly a 1/3rd of a year to COVID, and, while general retail lost even more, it really has been a bumpy ride for golf retailers. We hit a low in May, with retail sales, year to date, down 54% in value. However, a resurgence in the popularity of Golf, due to its COVID compliance, saw golfers, new and old, loving the game and spending their money. At year end, the speciality golf channel recovered to be only 10% down on the previous year. All things considered, this was an amazing result.

The second half of 2020 was up 24% in value versus 2019 according to the Golf Datatech retail audit. On and Off-course retailers saw a very different split. Off-course was up 43% in the second half of the year compared to 10% across On-course. Overall, On-course ended up down in value: 19.8%, while Off-course was up just 3%.

The graph below plots the changes in value versus the previous years. As you can see, whatever happens in the first few months, the market tends to trend back to plus or minus 10% – even with a pandemic! This should provide some comfort for retailers that the market doesn’t move around too much. In many instances, it’s likely that internal factors can have a bigger impact on the business, than the market overall.

The 2020 Consumer Shift

First thing to note is that there was a shift in consumer spending. Generally, the Clubs category did well but Clothing did not. This might provide an illustration on how internal factors have had an impact on spending.

Retailers, as well as customers, were nervous about the rules – especially clothing. “Can I pick it up?”  “Can I touch it?” “Will I get Covid?” All questions that customers asked but probably didn’t get answers for and, as a result, consumers opted to leave clothing on the rack.

Off-course apparel numbers were up, bolstered by online sales. Consumers felt more comfortable ordering clothing to try at home.  With the right preparations and messages to customers, Apparel, and other categories, can still sell well. So, while external factors created a negative situation, retailers who adapted worked around it.

The Stock Factor

The other factor that seems to have really hit clothing sales is STOCK. At the end of May, at the start of the golf boom, inventory levels were 15-20% down. By the end of July, stock levels were 20-30% down.  Stock wasn’t being replenished and orders were cancelled.

August and September are 2 of the biggest months for clothing but as orders had less stock, sales took a hit.

As mentioned, Clubs did well and Irons and Wedges were up for the year, which was an amazing result. Customers obviously felt more comfortable buying these products. Custom fit sales didn’t produce the same stocking issues, although there were delays in getting items to customers.  As a result, sales were good.  

Trolleys were another example of stocking issues:  Sales were down 13% in units by the end of the year but could have been very different, if not for lack of stock. Orders were cancelled early on and then deliveries from China couldn’t keep up with later demand. It was an understandable position but one created internally. Looking at the numbers, Trolley stocks were down 55% in July and, as a result, August sales were down 20% in units on the previous year – the only hardware category to see a drop.

Consumable Challenge

The only real surprise to me last year was consumables. Rounds were up for the year but the sales of balls and gloves in the specialty channel didn’t reflect this. I think some of the sales went out of channel: with golfers adding a dozen balls to their Amazon basket, along with their batteries, books and anything else they were getting shipped.

I also have a hunch that the mix of golfers this year had an effect on consumable sales. Did all the regular, and especially older club members, play as much golf this year? Did some stay at home and isolate? While rounds were up, how much of the increase was from new or returning golfers that may have different purchasing habits, and who were less connected with the pro shop, or specialty high street store?

And Now for 2021

It’s been a poor start so far, with a new set of lockdowns.  As I write, Scotland is still open for 2-balls but Wales hasn’t allowed golf for a couple of months. There must now be pent-up demand.

Golf doesn’t look like it will return in England until the end of February, or possibly later in March. However, while this looks bad for trade, in reality, I wonder how much golf would have been played over this period, with very wet weather and now half the country covered in snow?  Even without COVID, it would have been a rough start to the year. The only upside is that there is some government support for closed retailers and clubs. Furlough is offered for staff and grants are available for some clubs and retailers that pay rates. Covering these costs in these down times could actually help improve the financial situation for many. If we had all been closed for snow – there would have been none of these payments.

Reasons for optimism!

As with many things, a proper plan can deliver the best results. Last year’s initial panic meant manay retailers and brands lost sales. While the reasons were understandable, those in the trade that positioned themselves and planned accordingly, ended up with a stronger year.

Looking ahead, assuming we are shut for January and February, there is still plenty of opportunity ahead. Some retail has been happening over this shut period but the market will be down considerably.

Generally, January and February are small months which, typically, only account for 8 or 9% of turnover BUT, more importantly, only 6 to 8% of margin.

Usually, these quiet months are times for clearance, planning and a store refresh and high stock levels are not necessary at this time of year.  So, there is still plenty of time to gain more margin this year.

Once we are out of lockdown I expect the year to be a bit more like 2019 than 2020. We know January and February will be small. Hopefully there will be some pent up demand as the weather improves and golf returns to peoples thoughts. So March through May will be the key period and important to get everyone back in the swing. With the vaccine roll out forging ahead I hope that there will be no need for lockdown during the summer. People will be encouraged to go outside and stay healthy. Travel may still be a problem so there may be some restriction on international holidays. Hopefully more people stay in the UK and play more golf. If we combine these factors and manage to retain many of the new and returned golfers things could be very buoyant in the coming months.

Now for some modelling!

Looking at the numbers, we can do a little modelling based on 2019 to try and work out where we might get to in 2021. We will lose the majority of January and February but at some point we will be released – lets assume that’s some time in March. Based on last year lets assume March and April are flat. Pent up demand should drive more sales in the following season. If we get somewhere between 2019 and 2020 bounce we can look at gains in May and June of 15%, July and August of 10%, September and October of 5%. Assuming November is flat and December see a little uptick golf retailer would end up 11% on 2020, and about flat with 2019.If we can achieve that, then I think it would have to be considered a good recovery, especially having lost the first 2 months to lockdown. However, if Golf is released early, momentum picks up and we see some of the higher play in the summer like last year, there is every chance of a strong bounce back and more considerable growth for the year. Remember in the second half of 2020 sales values were up on average over 20% for the 5 months not in lockdown.

I very much want anyone reading this to understand that, even in the harshest of conditions, the golf market appears to be very resilient. Golf spend is relatively consistent, year on year, with normal years being + or – 5%. Even in a pandemic it was only -10% down overall.

However, what does change is what people spend their money on and where they spend it. Retailers that have done well last year may continue to do so if they can maintain their customer base. Retailers that have lost some customers need to re-engage with their target market and add value and service to win them back. Golf retailers will need to start selling balls and gloves, instead of just taking orders for them as there are now other retailers offering service and golf balls!

Make sure you take stock!

One key thought to leave you with. If you don’t have stock, you can’t sell it! Sales last year were definitely down for many stores as they didn’t have the stock in place to support the demand. It was clear that cancelled orders rippled through the system and brands weren’t able to get stock into the country. When they did it went to retailers that had maintained their orders. Make sure that you make a plan for this year and that you do have stock ready for when play starts again. Suppliers may be more cautious so stock won’t be hanging around in warehouses if you decide you want it. The other thing to consider is that if you do cancel too much , when you want it, you will be at the back of the queue to get it. Retailers that have worked with suppliers and planned their stocking will be the ones that get the goods first and make the sales.  

The most popular phrase in 2020 was “You are on mute”. This year we expect the it to be “We ran out of stock!”.

What is the Future for a Post-Covid Golf Retail Industry?

I started this article before the Covid19 outbreak and was then conflicted as to whether I should continue writing with the ensuing carnage. Inevitably, the pandemic would have a significant effect on our personal and professional lives, as well as our future behaviour. So, I pressed the pause button on my previously planned feature and, as predicted, the global economy has since slipped into recession. Now 8 weeks into lock down and I’ve had plenty of time to put together my thoughts on a post-Covid golf retail industry. Continue reading “What is the Future for a Post-Covid Golf Retail Industry?”

Reasons to be Positive

Today I went online and searched up “reasons to be happy”.  It was a real challenge to find anything positive.  I came across one article from 2013 and another from May 2018. And that’s it. Hasn’t anyone felt the need to write happy stuff since then?

If you believe everything you read in the Press, we do seem to be experiencing some unhappy times in the retail sector.  Hysteria, conflict and sensation sell newspapers, whilst stories of doom feed the television news channels.

Continue reading “Reasons to be Positive”

Loyalty schemes: What’s the point?

Many retailers offer a loyalty card to customers to keep them coming back to the shop. Loyalty schemes can help give your customers an emotional connection with your brand with every transaction: deepening loyalty, and encouraging them to spend more.  However, it’s essential to choose a program that will resonate with your customer base, or your business could miss out.

Loyal customers spend more money in shops than new ones.  Plain and simple.  A recent study by Harvard Business School found that a customer’s 6th purchase was, on average, 40% larger than his, or her, first: with the 8th being 80% more. Loyalty pays.

Loyal customers don’t just help your business because they spend more, however. According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%. And, if those numbers don’t make you sit up and listen,  a Gartner Groups study showed that 80% of a company’s future revenue will come from

Continue reading “Loyalty schemes: What’s the point?”

Should I cancel all my pre orders?

It’s been brought to my attention that there is some confusion over pre orders and what should people do with them. So, following a few conversations about planning, pre orders and agile stocking I thought I should put some thoughts down to point people in the right direction.

I am often asked by golf Pros if they should cancel all their pre orders.  The answer is a definite “NO”. Well, maybe…

The reality is that the answer has to be specific to your situation and your current plan. Let’s run through some scenarios to see what might be appropriate for you.

In general, you should not just cancel all your pre orders. You’ll end up with nothing to sell. The only reason to cancel all pre orders is if you are about to go bankrupt. There is no point is wasting your suppliers time and money and getting yourself further in to Continue reading “Should I cancel all my pre orders?”

What Can We Expect in 2019?

If I had a crystal ball, I’d have won the lottery a few times and would be sitting on my own island trying to work out how to take out Amazon. However, since I now have you on to my blog page, the least I can do is give you a few thoughts on what could happen in the world of golf retail in 2019.

Well, 2018 will have to go down as a pretty interesting year. England did well in a football tournament; Europe thrashed the US in the Ryder cup; the Beast from the East caused total havoc, only to be followed by a heatwave that got us all in a sweat. Then the political system imploded, as the Parties forgot about voters amidst the Brexit maelstrom: leaving the general public in a spin, and delivering the worst Christmas sales for 10 years.

So, what does any of this mean for 2019 and what can we expect for the golf industry in the New Year?

Continue reading “What Can We Expect in 2019?”

Get Set for 2019

With the build-up to Christmas well and truly underway, most retailers are trying to maximise their sales and take advantage of all the festive fervour. I’ve seen some great promotional efforts in golf clubs around the country. It’s amazing who has a special Christmas suit!!

While most people won’t start thinking about 2019 until long after the turkey has been eaten, there’s no harm inputting some thoughts together in preparation – especially as we all want next year to be “the best one ever”. Again.

Principle Planning

The main area for consideration here is planning. In Crossover’s recent Pro Shop Retail  Tips advice article, we brought up, what is, for many, the dreaded topic of budgeting.  This may not be the most popular area of business, but it really is a key part to running your store. I’d encourage all business owners to spend a few hours over the coming weeks to make sure they have all their numbers together. If you want to have a really Continue reading “Get Set for 2019”

When a Brand goes Direct to your Customer

Thanks to Head PGA Pro Michael McCrudden from Roe Park Resort in Northern Ireland, for this Tweet:

“Hi Phil, any chance of a blog post on how to deal with suppliers going direct to consumer and cutting out/by-passing bricks and mortar retailers like the green grass PGA Pro?”

This is a great question, and one that seems to be a really hot topic at the moment. Whilst I can’t provide you with a silver bullet, I might be able to provide some insight in to why brands are doing it, why consumers like it, and how retailers can respond.

So, here goes!!

Why Do Brands Go Direct?

It’s only since we have moved in to the digital age that brands have been able to interact directly with the consumer. In the past, manufacturers relied on distributors selling Continue reading “When a Brand goes Direct to your Customer”

3 Reasons to Put on a Sale

Discounting stock for the wrong reasons will cost your business dearly. In fact, without a strategy in place, sales can even be dangerous to your business: lowering your Average Sales Price (ASP) and reducing overall profits. To maximise the opportunities of a sale, retailers need clear objectives, says Phil Barnard.

Some might say that you don’t need a reason for a sale. We know customers love a bargain, (who doesn’t?), and sales are something most retailers do intermittently throughout the year.  However, sales need to be planned as part of your business strategy, and with specific reasons in mind. Putting on a sale because ‘it’s that time of year’, could have a negative effect on your bottom line.

So how can you ensure your sale will bring the maximum benefits to your business?

Continue reading “3 Reasons to Put on a Sale”

Bettering Amazon: Advice for the Smaller Retailer

Following my article outlining some of the lessons learned from Amazon, here are a few pointers for the golf retailer on how one could use some of Amazons tactics.

So what does the rise in online sales mean for smaller retailers?

First of all, you are going to have to compete with Amazon and the other big online marketplaces – this is just a fact of life.  These behemoths of the online world have advantages in the scale of their operation, the sheer range of products they can provide, their reach, and their infrastructure – but do not be disheartened.

You have strengths that the online giants don’t have. So, what should you be doing?

Continue reading “Bettering Amazon: Advice for the Smaller Retailer”