NPD Group look at the state of play for the golf industry and what the future holds for the sport
Despite attempts made by golf associations to dispel the notion that golf is a recreational activity reserved for the elite, for many the sport is still tied to affluence and exclusivity, which may play a significant role in hampering growth opportunities.
Despite this challenge, it is still a multi-billion pound industry in the UK and notably increased its international exposure having been included in the 2016 Olympics in Rio de Janeiro, following more than a century-long hiatus.
However, the sport is facing difficult times, particularly in terms of the drop-off of registered golfers in the last few years following the economic crash of 2008.
According to England Golf, club membership dropped by 20 per cent in the last ten years in England.
In Europe, the UK and Ireland represent the largest golf markets with an estimated 1.1 million players and roughly 3,100 courses (KPMGGolf Participation Report for Europe 2016).
Despite the overwhelming successes of Northern Ireland’s Rory McIlroy, golf apparel and footwear sales are down across the big five countries (Great Britain, Germany, France, Italy, Spain).
The apparel and footwear market for the big five decreased by 30 per cent to £58.1 million in the last decade, though recovered in the 12 months to September 2016, thanks largely to the apparel business.
Of the big five countries, Great Britain is a golf stronghold, accounting for 50 per cent of the total golf footwear and apparel value, though it follows the downward Big Five trend over the last decade and has also declined in the last year in value. Following these inopportune trends, Nike renewed its golf strategy in August 2016 by stepping out of the equipment market – including clubs, balls and bags – allowing the brand to focus its energy on accelerating innovation in its golf footwear and apparel business.
Adidas’ latest move in the golf arena marks a similar shift in focus. In May 2016, the company announced that they intend to sell their subsidiary TaylorMade, because sales fell for the third straight year in 2015.
Despite this negative news for TaylorMade, its future is not necessarily bleak, as Tiger Woods announced his return on the world’s finest greens for 2017 and signed a multi-year endorsement deal with the clubs and bags maker.
As one of the biggest names in the sport, Woods is still representing Nike for its apparel including golf shoes. Other positive indicators for the sport include Jason Day, the current number one golfer in the world, as well as six other highly-ranked European golf athletes joining the Nike family in January 2017.
The way forward seems clear for the industry - it must act decisively in addressing declining participation. Many golfers are too time-crunched to fit in a traditional 18-hole game into their schedules. Consequently, the sport should adjust to the new habits and demands of consumers and provide an option for golfers to play shorter games, with a shorter nine-hole game being considered as a viable alternative.
In addition to this change, improved technology for virtual reality could help to increase engagement with the sport with ‘Urban Golf’ or ‘Top Golf’ in the heart of cities.
Following the signings of the biggest names in golf and the return of the sport to the Olympic Games in 2016, it is hoped that younger people and women will be drawn to take up golf.
The gender split on the Big Five apparel and footwear market is quite one-sided, where females represent only 24 per cent in the 12 months to September 2016. According to European golf associations, over the last decade, females have accounted for roughly 14 per cent of golf club membership in Great Britain and Ireland, below levels of female participation observed in other European countries, particularly Germany, Austria and Sweden.
However, significant progress is being made according to new data from England, Ireland, Scotland and Wales, with successful events encouraging female engagement with the sport playing a role.
With regards to age, younger people are growing in importance in terms of how much they contribute to the sale of apparel and footwear across the big five – which is encouraging news. Approximately 42 per cent of the golf apparel and footwear value come through the under 45 age group, having increased by roughly seven per cent in the last four years.
One way of encouraging this positive trend is lower entry-point pricing to draw in the next generation of golfers to the greens. In the 12 months to September 2016 roughly 58 per cent of the apparel units were bought on promotion with a 40 per cent discount, while for golf footwear the depth of discount was just six per cent on 44 per cent of golf footwear volumes.
Although reversing downwards trends in golf may be challenging, there are signs that the sport will remain resilient, as energies shift towards making the sport more inclusive and broader in its demographic appeal, while the investment made by brands in big names may also provide a boost.