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Golf industry searches for path forward amid uncertainty at merchandise show

ORLANDO, FL - January 22: An overview during the 2020 PGA Merchandise Show on January 22, 2020 at Orlando County Convention Center in Orlando, Florida. (Photo by Montana Pritchard/PGA of America)

  • Golf merchandise and equipment business in period of marked change, as participation rates sink
  • Industry leaders exploring new forms of play to attract new audiences
  • Old rules for tradition-bound sport liberalizing in many corners

Can the old-time sport of golf – whose genesis dates back to 15th century Scotland – fit into a hip, sleek, ultra-fast world, where attention spans are shorter and the desire to attain instant gratification is paramount?

That was the central question confronted by more than 1,000 exhibitors at last week’s 2020 PGA Merchandise Show in Orlando, Florida, a key annual gathering of the sport’s leaders and industry titans.

According to a 2016 study by the National Golf Foundation, the US golf sector – which comprises the most players and courses of any country in the world – is worth as much as $84.1bn (€76.5bn).

On its face, such a number seems quite impressive. But the American participatory golf market also remains in marked decline, as the number of rounds played fell by nearly 5 per cent in 2018, the most recent year with data available, extending a multi-year drop off. More broadly, the impacts of the global financial crash a more than a decade ago are still sending shockwaves throughout the industry, and many leaders were far too slow to react and adapt.

The required adjustments of what the sport is now facing clearly is a work in progress. The more than 40,000 attendees at this year’s PGA Merchandise Show were fully aware, perhaps more so than ever, that the celebrating of yesterdays is no longer an option. Meaningful sustained strategies to restart growth are needed. And so is keeping players already involved with the sport active, yet still engaging others likely to not have viewed golf as worthy of their time and money.

Until recently, many key figures within golf’s hierarchy were firmly in denial and often proffered a rationale that whatever changes happening were simply cyclical adjustments, when in reality a far more deeper paradigm shift was enveloping the sport in rapid fashion.

Seismic Industry Shifts

When Tiger Woods came onto the scene as a professional in October 1996, the sport of golf was clearly ascending. Back then the Orange County Convention Center, the long-time site for the merchandise show, routinely sold out. Floor space was at a premium, and numerous exhibitors secured space in adjoining hotels.

Fast forward to 2020, and the dynamics are far different. The Convention Center was not at capacity. And to generate additional revenue, show organizer Reed Exhibitions invited various racquetball sports to join the festivities. During the heyday such an inclusion would have been mocked. But not anymore.

In short, the golf world is clearly searching for a more proactive approach.

It’s hard to fathom now, but in 2000 the total number of US golfers in the was just under 30 million, according to the National Golf Foundation. That figure has since dropped by a third slumped to 20.5 million over the ensuing two decades.

 

Facing declining participation rates, many golf equipment manufacturers are seeking ways to attract new players with lower price points (Photo by Montana Pritchard/PGA of America)

Course closings since 2011 in the country have exceeded 800, and the trend of more going that route is likely to continue for the foreseeable future. In years past, the idea that private equity owned clubs in major metro areas would fall victim by permanently shuttering their doors was seen as far-fetched. That also is no longer the case.

The simple reality for many golf clubs is that the bulk of their membership is aging out, playing far less golf than years prior, and those retiring players have not been fully replaced with an active base of younger members. 

The very concept of what makes a private golf club viable in 2020 is also a debate taking place in earnest. Golf courses in major metro areas often occupy enviable parcels of land that are especially attractive for alternative usages, and developers are ever eager in bidding for such locations. Clubs that have not been able to secure their next generation of younger members are now seriously entertaining such offers.

“Golf course architects have been reacting to the realities of the golf market for a number of years in a variety of geographic areas with various demographics,” says Jan Bel Jan, president of the American Society of Golf Course Architects (ASGCA). “It is important to recognize golf course architects can only have an impact if engaged by facility owners or club governors.”

Baby boomers, typically defined as those born between 1944 and 1964, for many years provided the core for the golf industry’s growth as that generation reached their peak earning years. It was this group that through their robust numbers financed course construction, related real estate development, equipment, and apparel purchases. 

But that group is now rapidly moving into the shadows, and like the club membership rolls, the prospect of their being replaced on a dollar-for-dollar basis is hardly assured.

Beyond the raw numbers, there is also a qualitative issue redefining the sport. For those boomers, the concept of spending time on a golf course in a leisurely manner was considered totally appropriate. Today’s world, conversely, often eschews languishing, and the golf business is still adjusting to the reality that younger players may not readily adapt to setting aside five or more hours to play golf. 

A variety of alternatives and new play formats have been discussed, such as with rounds of less than 18-holes, and players even paying just for the number of holes they play in a given outing. 

Yet, a core question remains: how does a slow game adjust to the dynamics of where people wish to squeeze a multitude of different activities into their daily calendars?

The answer, many show attendees said, lies in even more radical approaches than merely tinkering with the number of holes in a round.

“We all have to start thinking unconventionally regarding the time of day, number of holes played, formats and other factors that not only speed up the pace of play but making the game more fun,” says John Farrell, director of operations of the famed Sea Pines Resort, Hilton Head Island, SC.

New Formats, New Approaches

The recent ascension of sports entertainment company Topgolf and upstart competitor Drive Shack has been especially noteworthy. Anecdotal research suggests that as many as 70 percent of attendees at those venues are picking up a golf club for the first time.

But there’s to date no credible research indicating if those people remain with golf in the traditional manner. There’s also a concern regarding the staying power of such novel facilities once the initial interest fades.

Similarly, promotional efforts for golf recruitment have only demonstrated mixed results, and to date have not moved the needle upward in overall revenue or rounds played. This is especially so among sought-after key demographics such as women and minorities, no doubt owing to golf’s uglier history with elitism, sexism, and racism.

A prevailing theme at last week’s PGA Show centered around teaching the game, namely getting quality information to prospective players in an effort to boost player satisfaction. Quality golf instruction does exist in numerous US markets. But many of the top-tier practitioners are engaged with advanced players, or with private clubs and resorts where individual costs can be prohibitive for many to access. 

Instructors are now leaning heavily on social media, seeking to connect with a broad range of prospective players so that useful  information can be communicated much more quickly, and excitement in playing the game can be enhanced and sustained.

“Connecting with new players today is totally different than a few years ago,” says Steve Bosdosh, Golf Magazine Top 100 Teacher. “It used to be [about] just making someone better, and they would spread the word. Now you have to be on social media with cool, fun, exiting ways of saying the same old thing.”

Another key theme centered around liberalizing or outright ending long-held rules traditions and mores of golf such as no denim and no music on many courses. For decades, such notions would be all but unheard of.

But again, more desperate times call for more desperate measures. 

As one prominent golf professional who attended the show, speaking on the condition of anonymity explained, “I am in the Andy Jackson business [referring to the former US president on the $20 bill].  Whoever comes to my course with the most Andy Jacksons has my attention.”

Budget matters

 The cost of golf equipment has also proved in recent years to be a serious impediment for any large-scale industry growth. Want the latest high-tech driver? Be ready to plunk down $500 or more. What about a set of irons? Eight-club sets can easily exceed $1,000. A new wedge set? Try anywhere from $150 per club and up. Getting a new putter? Be prepared for sticker shock with prices routinely going beyond $200.

But the dirty truth around those high-dollar equipment costs is that the technical advantages heavily touted by manufacturers are often out of reach for amateur players.

What golf industry leaders are asking for now is not necessarily a race to the top in terms of bleeding-edge technical innovations for equipment, but rather a liberalization in rule allowances to allow novice players to strike the ball easier. Such a shift, the theory goes, would open up significant participation and revenue opportunities.

“If there were a way to relax some of the equipment guidelines and limitations, you would see another transformation within the game similar to what we saw 30-plus years ago with the introduction of metal woods,” says Eric Eby, director of golf at The Reserve Club in Indian Wells, California. 

“Anything that allows golfers — especially amateurs — to hit the ball further and with more ease and consistency, exponentially increases the enjoyment of the game and would increase the number of rounds played and participation,” Eby says.

A related trend among manufacturers is seeking to develop more budget-friendly equipment lines to help onboard new players. 

Illinois-based Tour Edge, for example, has kept its price points far lower than the other more noted equipment companies, and its products are still used extensively by players on the PGA and Champions Tours in addition to recreational players. 

“Millions of golfers are being alienated [and not] receiving advanced tech at what they consider logical pricing,” says David Glod, Tour Edge president and master club designer. “We provide clubs that perform just as well or even better with ground-breaking innovation at half the cost. Nobody else is able to do that, so it has created a huge opportunity for Tour Edge.”

Similarly, a more recent re-emergence of Lynx to the American golf market, after coming back onto the equipment scene in the United Kingdom, is attempting to resurrect a once-prominent brand by also providing equipment options at lower prices than premium brands.

A related rethinking has also enveloped the golf apparel business. Designs no longer predominantly feature ones with staid, conservative colors. Instead, the new mantra is that looking good is no less important than playing well, and apparel often must also have uses beyond the golf course. 

Companies such as Cobra Puma, through affiliations with the likes of Rickie Fowler on the PGA Tour and Lexi Thompson on the LPGA Tour, are showcasing much brighter and less traditional colors for golf, and designs aimed at making a much more impactful visual connection, both on television and in person. 

“We’re dedicated to growing the game by doing things differently in helping make the game more fun and inclusive,” says Tom Olsavsky, vice-president of research & development for Cobra Golf. “Players such as Rickie (Fowler), Lexi (Thompson), Gary (Woodland) and Bryson (DeChambeau) stand out from the crowd and help showcase our game enjoyment message, encouraging more young golfers to join the game.”

And if more young golfers do ultimately join the game, the industry will have an opportunity to find a future.

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