The Golf Equipment Industry’s Growing Problem

I’ve often made the point that one of the fundamental hurdles that any marketer in a niche product category must face, is recognizing that there is a wide gap between their own mindset and purchase process and the focus of the target customer. This is particularly acute in an often insular vertical like golf equipment, where we live our category 24-7. Throughout my career as a golf industry researcher, our equipment manufacturer (OEM) clients have grappled with this inconvenient truth and how to navigate between a desire to espouse the latest technical innovations and differentiating product specifications and the fact that the overwhelming majority of target customers will glaze over at these particulars.

We’ve done a fair amount of research over the years on the power of “Influentials”, those opinion leaders whose shopping behaviors and product knowledge have been shown to have an exponential impact on others below them in the pyramid of product knowledge. I’ll likely dedicate a future column to a more thorough treatment of this phenomenon, but suffice it to say that this concept remains alive and prevalent among a number of the leading OEMs, who continue to see strong returns on their investment in TOUR player endorsements as well as diffusing product into the hands of other elite player product ambassadors who can not only share their product knowledge to lesser skilled golfers, but more importantly demonstrate product efficacy on a more visible stage.

That aside, an abundance of golf industry research that we’ve conducted has shown that the top of the pyramid continues to be incredibly small. In much of our one-on-one customer interviews, focus groups and other qualitative golf equipment work, I can typically identify a respondent’s product IQ within the first minute of the interview. When more golfers than I’d like to admit still refer to grips as handles, you can imagine how few can actually speak to the benefits of perimeter weighting or recognize the unique qualities of forged versus cast clubheads.

A few weeks back in this space, I made the case for launch monitors as the ultimate “proof point” or validator for OEM efficacy claims. I pointed out that it isn’t common nor is it essential for the typical golfer to understand all of the technical jargon, but to simply recognize that there is technical innovation taking place. The numbers on Trackman are then carefully utilized by retailers as a compelling, though sometimes hollow or misleading, justification.

But there’s a potential downside to all of this, that we’ve also been seeing in a fair amount of our equipment purchasing related research of late, and that is the phenomenon that we are intimidating a large swath of the potential marketplace to stay away from the latest and greatest new premium priced equipment. Our most recent golfer omnibus study waves continue to show the willingness of the top of the market to pay more for cutting edge new product, rather than increases in the volume of those actually making those purchases. The ability of the industry to push up price points has largely driven market growth of recent years. This means that both OEMs and golf retailers have been faced with an intensifying battle for market share.

Our work is showing an increased incidence of viable customers who reach a number of suboptimal conclusions about equipment from a macro perspective. First is that there is evidence of continued belief that product innovation diffuses at too rapid a pace. But that belief is amplified by consumers’ observations that there is a proliferation and decreased time window for new product introductions. This was clearly a more serious issue earlier this decade, but consumers are still sensing this, and that in turn leaves a large segment of buyers with the belief that they can easily achieve better value if they buy cascaded or used equipment at substantially reduced prices. This product, they conclude, is almost as good as the newest models, and certainly for those who aren’t single digit handicappers or those who strive to soon become one, “good enough for me.” While product trial still rues the day in tipping the scales towards purchase, we are finding more of the new equipment buyers that we speak with, facilitating their transactions online, where price is the key differentiator.

The other shift that we are seeing is that particularly for a number of players…not just those with higher handicaps and less frequency of play, continuous technology innovation messaging is also causing an inferiority complex and a hesitancy, that I sense is detracting from these customers’ urgency to upgrade. Again, I’m not speaking of the top of the pyramid folks, and I’m certainly not referring to a formidable segment of golfers who are still looking to buy a game at any cost. The growth in the high end custom fitting studios like Club Champion and True Spec certainly offer strong evidence that there is an exciting and lucrative new premium segment. But, increasingly our research is finding that a combination of higher priced product, an abundance of available one or two year old product at value prices and a sense that the newest innovations may not make a demonstrative difference except for those at the most elite skill levels is potentially leaving profit on the table. Speaking more carefully to these larger segments could be a big victory for those who crack the code.

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