Building the ‘total golf experience’ at retail.
By Neil Schwartz
At this year’s PGA Merchandise Show, SGB had an opportunity to sit down with Dick Sullivan, president and CEO of PGA Tour Superstore.
Owned by Home Depot Co-founder and Atlanta Falcons Owner Arthur Blank, the golf retail business currently operates 25 stores in 11 states and eyes to double that number by 2020.
Sullivan joined the retailer in 2008, and while he admits the sport hit a rough patch after the recession, he’s seen stabilization over the past few years, leading to improved business practices and innovation from vendors. He shares with us how the retail business is going, what he sees ahead and strategies to attract more youth to the sport.
Before we dive right in, I’m curious what originally drew Arthur Blank to the golf business? As an entrepreneur and sports/golf enthusiast, Arthur saw a great opportunity in PGA Tour Superstore because there were many similarities and opportunities as with Home Depot … namely providing a benchmark in the customer experience — especially on the service side with knowledgeable associates on the sales floor and empowering consumers. We hire the best in the industry. Our people are not an expense, they are an investment. It is a true competitive advantage if executed properly.
How was the past year for the business? It was a good year for PGA Tour Superstore. We have started to see sales in the golf business stabilize after a rocky few years. We were able to grow our year-over-year business overall, with footwear and apparel both positive. Equipment was still slightly down, but nowhere near as much as it has been. Over the past five years, golf equipment sales have declined by as much as 40 percent. We have seen a number of factors contribute to this change.
• The number of golf rounds played each year has stabilized. Golf rounds were essentially flat in 2015, as reported by the National Golf Foundation.
• Manufacturers continue to drive sales with major advances in golf equipment technology.
• Manufacturers have gotten more sensitive to the product lifecycles for their newly released products. This has translated to higher revenue from these categories along with better gross margins.
What do you see ahead for 2016? It will be our best year ever at PGA Tour Superstores. First, we plan to open five new stores this year. We have carefully selected those markets with high concentrations of avid golfers, who represent our core customers. While our average stores tend to run in the 45,000- to 50,000- square-foot range, this year we will open a few selected stores in the 25,000- square-foot range. We recognize that a one-size fits all retail strategy is just not a sound business decision. Smaller markets will get smaller format stores. Our goal is to be at 50 stores by 2020.
The recent trend for golf retailers to close stores and/or shrink their golf departments. What does PGA Tour Superstores know that everyone else doesn’t? First and foremost, we truly understand our core customer, the avid golfer. Everything we do in terms of marketing and merchandising is directed towards these special customers. As an example, we are finding out that 70 to 80 percent of our customers are engaged with some sort of golf club customization when they make a purchase. It can be anything from adding a golfer’s favorite grip or as extensive as selecting a custom shaft option. We make sure this desire is met with the best golf-fitting professionals and clubmakers. Second, we understand that consumers are not just looking for a place to buy golf equipment; they are looking for a total retail experience. We have found that PGA Tour Superstore consumers come to us for the total experience. Golf is a game and we want to bring as much excitement and fun to the consumer experience as possible. That is why our stores have the latest in golf simulator equipment that lets consumers try before they buy. We are constantly looking to make the PGA Tour Superstore fun, informative and engaged for our customers.
Earlier you mentioned new products. What are some of the stand out products that are catching your attention? The new M1 and M2 drivers from Taylor Made are surely getting a great deal of attention. Other manufacturers like Callaway and Cobra have added wonderful new products to their lines for 2016. There are also a lot of new entries on the softlines side of our business from various brands that are taking their place alongside the traditional ones. We are very sensitive to how trends from within the game of golf affect the trends in apparel and footwear. We are seeing that our consumers want more than just great golf shoes, they are also looking for after-golf footwear, especially for women. We have found that in many ways our business is price-point driven. That means we have to test and then offer products at various price points to ensure that we are “hitting the sweet spot” for sales across all categories of business.
A lot has been made about the fact that golf is losing more golfers than it gains every year. Can PGA Tour Superstores be part of the cure to engage new people to golf? We are in fact engaged in the process of bringing new players under the golf tent. What we are finding is that like our stores, there is no one solution to this problem. As an example, we focus on the entertainment experience at our stores. That means that we need to look for new ways to bring the fun and excitement to the experience. Millenials in particular are looking for the fun and social experience and we are looking at ways to leverage this desire and preference. In some recent surveys, alternative golf options like Top Golf and AGE, (Foot Golf), are resonating with specific groups of consumers and we are looking at ways to leverage these alternative golf experiences.
What are your favorite places to play golf? First I think that every avid golfer should have Pebble Beach and Augusta on their golf bucket list. They are both very special places, and I have been lucky to play at both. That being said, I have to say that my two favorite places to play are my home course, The Golf Club at Cuscowilla (Eatonton, GA), which was designed by Bill Coore and Ben Crenshaw. It’s ranked one of the top golf courses in Georgia. My other favorite is the Mid-Ocean Club on the Island of Bermuda.
Photos courtesy PGA Tour Superstore
