A ROUND BALL IN A SQUARE HOLE

The retail co­nun­drum Nike never solved

Golf Asia (Malaysia) - - SCENE -

Other than fig­ur­ing out how to best lever­age Tiger Woods, Nike’s most chal­leng­ing is­sue was the struc­ture of the retail golf busi­ness, which hin­dered the com­pany’s abil­ity to reach po­ten­tial cus­tomers.

“Fun­da­men­tally, golf is still a rel­a­tively small busi­ness which does not lend it­self to a mass-mar­ket

dis­tri­bu­tion model,” says Hedges. “With less than 7% of the adult pop­u­la­tion play­ing the sport and some 50% of golf equip­ment sold through pro­fes­sion­als’ shops, golf equip­ment brands can­not sus­tain a prime high street retail po­si­tion. Across the world, even the largest golf re­tail­ers are in se­condary lo­ca­tions be­cause sales just can­not sup­port prime lo­ca­tions and the as­so­ci­ated costs.”

This cre­ated a prob­lem for a mas­sive com­pany like Nike, which usu­ally reaches its cus­tomers on the high street or via its own on­line stores. “Suc­cess­ful golf brands have to work with a very large num­ber of small re­tail­ers,” says Hedges, “whereas Nike is more geared to mass dis­tri­bu­tion.”

This ex­plains why the golf in­dus­try re­mains the realm of golf-only brands such as Ping, Mizuno, Call­away, Titleist and the adi­das-owned Tay­lorMade, which is cur­rently be­ing sold by the Ger­man gi­ant and ma­jor Nike com­peti­tor.

Hedges be­lieves the com­plex­ity of the buy­ing process in golf means that the in­flu­ence of the PGA golf pro­fes­sional holds more weight than an en­dorse­ment by a well-known tour­na­ment pro­fes­sional – a fact that is ev­i­denced by the still high per­cent­age of to­tal on-course sales.

“The unique fa­cil­ity of hav­ing the coach, cus­tom-fit­ting op­tions and re­tail­ing be­ing at the point of pur­chase means club pros have a huge in­flu­ence. Our re­search has shown that a PGA club pro­fes­sional’s per­sonal en­dorse­ment is eight times more pow­er­ful than that of the top tour­na­ment pro­fes­sion­als. Golf brands recog­nise this and use that pyra­mid of in­flu­ence by en­sur­ing that the club pro­fes­sional is sup­ported. Mas­sive brands such as Nike tried to en­gi­neer their pre­ferred sup­ply chain and busi­ness model into a mar­ket that could not and would not fol­low it.”

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