The Pellucid Perspective - July 2017 - 8

GOLF EQUIPMENT

that I'm somewhat familiar with and have probably an average amount of water and woods to navigate. If Jim quits and
Stuart persists, the number of balls that need replacement will
go down dramatically. The other aspect of committed golfers
is that we're also continuing to skew more to the older crowd
and, as we've outlined before, retired golfers look to convert
their golf spending from variable to fixed as much as they can.
These guys (and gals) probably get more mileage out of both
consumables and durables than the average bear so having a
higher concentration of the Silent Generation/Baby Boomers
also isn't likely favorable to selling more latest-and-greatest
technology or premium-priced balls, etc.
Somewhat lost in the "red numbers" is the fact that green
grass golf retail, left for dead years ago by the general media
and industry pundits (Pellucid included) has stabilized and is
gaining share in the channel wars. Part of this is due to the fact
that they've gotten smarter about where they can and can't compete and have focused item selection, inventory and price points
against the places where they can win. This isn't saying that oncourse retailers should get frisky and dramatically expand their
offerings, increase inventory, etc. but it is saying that those who
took the approach of on-course retailing being a token effort
or cost-of-doing-business likely need to rethink their strategy.
Just as we're seeing in the non-golf retail world, the competitive

DIS COV ER

landscape, go-to-market strategies and emergence/disappearance of business models can turn on a dime. The way I read
the tea leaves, right now if you have a vested interest in the OnCourse equipment (and apparel) retailing business, you've got a
little breathing room and a touch of momentum. If you're in the
Off-Course business, you're going to need increased discipline,
better strategy, price rationalization and improved marketing
and merchandising skills (i.e. you need to be a "five tool player").
For the equipment manufacturers, they have a vested interest in
the potential shift based on where the bulk of their portfolio
lies (i.e. this provides slight advantage to Acushnet's green grass
footprint but it's also offset slightly by their heavy dependence
on the balls subsegment) as well as their profitability in each
channel as the mix shifts. Likely their biggest concern is the
secondary market where, like used car dealers, the manufacturer
doesn't get any benefit from the second and subsequent sale of
their products. We'll watch as the balance of the year plays out
to see whether this channel divergence continues to play out
along this trend and then into '18 to see whether it's a one-year
aberration or a fundamental shift that needs to be factored into
the plans of both manufacturers and retailers. Those of us who
have made our living in or around the retail world at any stage
of our careers already know that retail, by its very nature, is not
for the faint of heart.
n

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Clockwise from top: Old Works, Anaconda, Montana; Aliante Golf Club, North Las Vegas, Nevada;
Palmilla Beach Golf Club, Port Aransas, Texas.

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The Pellucid PersPecTive

2017

5/30/17
uly 3:23 PM

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Table of Contents for the Digital Edition of The Pellucid Perspective - July 2017