Golf RetailSeptember 21, 2016

The other side of golf retail is taking small successes big

As Golfsmith, which bills itself as the largest golf retailer in the world, navigates its way through the intricacies of its recent Chapter 11 filing and the closing of 20 stores in the U.S., one of the more telling comments from those familiar with the company’s plans is a desire for stores with a downsized footprint.

Instead of 30,000-40,000 superstores, Golfsmith believes the right model might be something well less than half that size. A source close to the Golfsmith situation thinks that as golf consumers become more and more focused on a custom fitting experience, the right Golfsmith store, maybe even the right golf retail store period, is leaner.

“For manufacturers and retailers, it’s less about mass producing a lot of clubs and have them sit on the retail floor, and more and more customers about custom fitting,” the source said. “Golfsmith just needs to be sure to build stores that are able to take advantage of those trends.”

It’s both a shift in the company’s recent strategy (a strategy that in no small part led to its financial difficulties) and an acknowledgement that the golf consumer may be changing in some ways. Certainly other retail outlets in a smaller way are taking advantage of that change.

Courtesy of Club Champion

Some of the fastest growing and most profitable golf outlets continue to be the smallest. National fitting chains like Club Champion and Cool Clubs, whose facilities are measured in the hundreds of square feet not the thousands, are making money. Club Champion, which opened its 16th store in Long Island in August, has seen its business grow 80 percent this year, and it’s opened five new stores with plans for five more by end of January 2017.

“The retail landscape is changing and consumers want tailored products that make their lives easier and the game more fun,” said company founder and chairman Keith Bank. “Club Champion has tapped into that wave of change and we are building a successful retail model that will drive growth for the next decade.”

Even one of Golfsmith’s partners offers an important lesson on where the game at the retail level is going. GolfTEC, the national chain of golf instruction and fitting centers based in small retail spaces, many near office complexes, also has 84 of its centers within the walls of current Golfsmith stores. GolfTEC’s business has grown 100 percent in the last seven years, and its teachers will give some 900,000 lessons this year, while offering custom club fitting in facilities that are rarely larger than 2,000 square feet.

“The consumer is more aware of the importance of doing it right,” GolfTEC CEO Joe Assell said. “We’re high-touch, high-service. We can go into more urban areas where any big box guy can’t go. We’re right near your office building and in today’s time crunched world that half-hour drive out to the golf course may not fit in, but if we’re in the same block, you can more easily come by.

“Our customers get excited because they’re shooting lower scores and how we got them there might have been better clubs, might have been the lesson, might have been their practice time on our video system or it might have been the combination of everything.”

It’s what could be called a whole-golfer approach to satisfying the golf consumer. Rather than self-service, there is a growing sense among serious golfers that they’re worth a more tailored approach. And serious golfers are the group spending the most money in the game.

What fitters and smaller retail operations are seeing is the potential for golf equipment companies to turn around a custom order in 2-3 days when not that long ago it might have taken 2-3 weeks. Moreover, golf consumers know that and have embraced a more direct relationship with the business or person selling them new clubs.

It’s about building trust, says Woody Lashen, master club fitter at Pete’s Golf, the leading clubfitting retail operation on Long Island in New York, despite its compact location tucked between a dress shop and a rug store on the main drag in Mineola, N.Y.

“I’m just not sure golf is really a big-box store kind of sport,” Lashen said. “They certainly aren’t going to tell a customer he doesn’t need to buy a new driver, but we can do that because they’re paying for the fitting. The serious golfer wants to go some place where someone knows more than he does.”

The trend is almost nostalgic. One impressive success story is Golf Exchange, with six stores in the Cincinnati-Lexington, Ky. area that specialize in custom fitting. All of the stores are less than 7,000 square feet and several are under 2,000 square feet. One Golf Exchange shop in Lexington is just 1,500 square feet and according to Golf Exchange owner Jason Fryia will generate nearly a million dollars in revenue this year. Fryia believes the smaller space engages the golfer.

“It’s like walking into the small pro shop at your muni course and chatting with your local pro,” he said, noting that apparel and shoes aren’t what’s necessary anymore. “It was a matter of stripping down what was absolutely necessary for the way we do business.

“I don’t think golf equipment is self-shoppable product anymore. It’s too complex and that works to our advantage. Customers are encouraged that whoever is the manager is the owner of the store, and he’s their guy. You definitely have that connection that he’s your go-to guy because every time you come in he’s there for you to have a conversation with him.”

It’s not that the small-ball model is the only one that works. Certainly, PGA Tour Superstore’s megasize footprint serves a purpose as an experiential retail model. But given the greater ease of purchasing accessories, shoes and apparel online, the retail model that still might have the greatest energy is the one rooted in custom fitting. And that’s a model that caters to an increasingly large percentage of the golf equipment purchasing public. A 2015 Golf Datatech study showed that 65 percent of serious golfers have been fit for clubs at least once, a number that has continually been on the rise since the golf research firm began tracking it in 2001.

How Golfsmith and others pursue that customer going forward remains to be seen, but GolfTEC’s Assell believes the potential is clear and present. He provided an enthusiastic endorsement for the game’s health.

“The avids, the serious, the core golfers they are just loving golf right now, and they are not going anywhere,” he said. “The sport can rest assured that it’s got a good supporting base out there.”

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