Old, “Establishment” Brand Makes Changes to Move with the Times! What can Golf Learn?

BBC 4 recently broadcast a thought-provoking documentary that had some very useful insights for the golf industry: “Inside Bentley – A Great British Motor Car”?  

It featured the thinking behind a £800 million investment in their latest model, the Bentayga: the fastest SUV ever built – a Bentley on steroids! It is the first time that they had developed an SUV. During its development it was essential that it sat perfectly in Bentley’s image, yet capable of winning-over future generations of customers. Clearly, they had recognised that, as the number of older customers diminished, (“the blazers” as they were referred to), the company needed to respond to the wants of younger generations.

Step one demanded product development as identified.

Step two importantly was the need to modernise their image at the point of sale. Hence the program saw the world’s oldest and largest Bentley dealer, Jack Barkley of Mayfair, having its interior stripped back and being replaced with sleek, new modern fittings and fixtures.

Bentley, an icon of British society, and Rolls Royce, have both recognised the need for change.  So must the golf industry if it is to prosper in changing times and it too needs to take a similar two-step approach.

The first, updating the product: offering different forms of golf, e.g. speed or football golf, for example, and competitions that are more in tune with family life today. The second, going out of its way to promote a new image for the sport giving it a much-needed, wider appeal: particularly to the Millennials who are so different to the majority playing golf now but need to be captured for the future.

Food for thought for the New Year!

Market Update: October 2017

As we find ourselves in the depths of winter, it’s time to reflect on how the market performed in October, before sales start to drop off significantly.

October is often an unpredictable month. Usually the 7th largest of the year with around 8.3% of annual sales, and it can throw up some funny results. Some years, we see an “Indian Summer”, with extended periods of play. And on the other hand we could see an early start to the winter. It’s also a time when some brands launch new products but other retailers start major clearance. Needless to say it can throw out some spiky numbers.

So how did it go this year?

In the main, pretty bad compared to 2016. Overall sales value is 10.1% down on 2016 with some categories taking a significant drop. Looking at the overall breakdowns, the off-course clubs group was hit the hardest – seeing a 28.9% drop. In contrast, the on-course group saw a 13.7% increase. Other categories have not fared quite as well. Apparel, consumables and other categories are all down between 5.8% and 21.2%, both on- and off-course. The only category (outside of clubs) that is doing ok is light durables – held up by a strong showing from on course shoes.

October 2017 value change table

Continue reading “Market Update: October 2017”

Black Friday: Real Deals or Marketing Fluff?

It’s another year of Black Friday mania, but is this all a benefit for the consumer … or retailer?

With all the advertising that is going on, you would think most retailers are giving away stuff for free. However, in terms of consumer bargains, lots of the deals don’t really seem to deliver.

Buyers Beware

I’m sure there are a few steals to be had, but in general, buyers should beware. Money Saving Expert and Which? (the consumer rights site) have both reported that some deals are not as good as advertised. Last year, Which? published a study reporting that over 50% of “Black Deals” had been the same price or cheaper earlier in the year.

Continue reading “Black Friday: Real Deals or Marketing Fluff?”

Market Update – End of Summer 2017

I am a little behind this month but thought it important to get another market update out to comment on what happened at the end of summer (August data). I will be doing another one at the end of the month so will keep this short and sweet, here goes. 

August was a big month, and looks like it will be the second biggest of the year, with more than 10% of annual sales falling in the last month of the Summer holidays.

Initially, the stats look a little confusing. Overall market value is up 12.1% versus 2016. However there is a big difference On-, and Off-course this month, and not all categories are up. Also, On-course ball volumes – a good indicator of participation – were down this month -1.1% , which usually indicates that there might be some fall in sales.

So what happened in the key categories?

August 2017 Category Value change

Well, On-course was up across the board. Clubs were up a staggering 29.8% while consumables were up a mere 4.4%. Off-course saw some gains – up 3.7% overall and 5.9% in Clubs. However Apparel was down -12.5% and consumables -2.8%.

The other interesting point is that On-course Outerwear was up 27.6% in units. So I think we can assume that those golfers that did play, needed some weather protection. 

Why are clubs up so much On-course?

Long and short of it, the On-course has really benefited from the recent Ping Launch of the G400. Perhaps we should call this the “Ping effect” or, with the current model, nomenclature the “G Effect”. I talked about this a couple of years ago with the G series and history has repeated itself. It looks like some pent-up spending has been unleashed and while the customers were in the shop they have bought clothing and other items as well. This has to be the main reason for the huge spike in sales, as weather and participation would appear to have been poor – so customers needed a reason to get to the shops.

Crazy stat!

I don’t usually pick out any specific products but the G400 is an interesting story this month. Looking at the raw data for every £100 spent in the On- and Off-course speciality golf shops, £8 was spent on either a G400 iron or a G400 wood – WOW that’s some launch!

So how did this effect the general mix of sales?

General mix is similar to other months. However, woods and irons have both taken a bigger share of the spend this month, with hardware accounting for 42% of sales versus 38% in June, and 39.5% in August last year.

2017 Value mix - August

Overall sales were up in 13 or 17 categories. Shirts collectively were the biggest looser along with men’s bottoms and distance devices. It appears that the spend on big ticket woods and irons pulled attention away from the higher value tech products.

August 2017 Value change

So was all this growth just from ASP (like most of this year)?

ASP is well up across the board with huge gains in woods trolleys and irons. However most of the clothing categories are pretty static with a year ago.

August 2017 ASP change

High ASP’s might be hurting distance devices. They are well down in units, but otherwise most unit sales are middling to flat, (except the obvious apparel that’s been hit by the weather). Woods were down slightly this month which is better than previous months. Irons were actually up even with the 18% increase in price.

August 2017 Unit change

How does this look for the rest of the year?

Well, the trend is pretty well set this year for solid growth. Previously I was calling between 8 and 10% and this is looking pretty safe. One of the key determinants was how well the product launches from the key brands went in H2. Ping has obviously done very well and Titleist have also made up some ground. Looking at this momentum double digit growth year on year is well on the cards.

Sales growth v last year.

Value trend Agust YTD 2017

Next month the picture will be a bit clearer and we can see if the trends continue with strong On course sales.