Manufacturer’s views towards a better future.

The golf equipment business was seriously shocked over the past weeks following Nike’s announcement that it was exiting the game. And before that, Adidas had already announced their wish to sell off TaylorMade together with last year’s bankruptcy of the smaller manufacturer Scratch.

As a golf club manufacturer myself from the past several years, I wanted to share my views about what’s happening to the market, and try to find some way to improve how golf clubs are made and sold in order to prepare a better future for clubs and the 80 millions golfers.

Times have changed

Like any other industry, golf has to adapt to the 21st century and the omnipresent digital disruption. Manufacturers and distributors are using digital tools to advertise and sell online, but the overall connections between people goes beyond that. Golfers are more connected to each other than ever before and this changes how they buy clubs and why they buy them.

Manufacturers have always spent 80% of their budget in marketing expenses, most of that on sponsoring top players. Now that golfers are aware of the differences between the clubs they buy off the shelf and the ones used by the pros, it seems that paying such high sponsorship fees might not be as profitable as it once was.

Golfers are aware of the very small improvements that are made year over year by the manufacturers (who are often just closing the lofts to find more distance) and this type of planned obsolescence might not remain the business model for long.

Golfers wants custom-made, beautiful clubs that won’t look old next year. The best clubmakers have no problems finding clients thanks to communication between golfers. Jean-Michel Quéva, one of the best clubmaker in France, has a small workshop out in the middle of the Normand countryside that is always busy. L’Atelier du Golf in Paris hasn’t done any advertising and is becoming more famous every day due to their high level of service and the passion they put in their work.

Now, this is certainly manufacturing at a different scale, but mainstream manufacturers and small clubmakers are both playing the same game, a new one where golfers have the power.

From my experience as a manufacturer I believe that improvements can be made all along the value chain to make golfers happier and to find a better business model. More specifically these improvements concern three axes of the business:

Production: how to build the club

Distribution: how to get access to the consumer

Communication: how the brand speaks to the world.

Production

One of the biggest problems in golf equipment is that golf clubs are standardized whereas people are not. This strong belief is what led me to start manufacturing golf clubs in the first place. Custom-making every club requires changing the production system and this is why most manufacturers would not likely be very excited about this idea.

Making custom golf clubs requires two things:

adjustability in the club heads

better control of the shaft flex and the club’s swingweight.

Club head

The weight of a club head needs to be adjusted to every golfer. This is extremely hard to do for any manufacturer but it must be done if we want the clubs to have the right swingweight and moment of inertia. PXG succeeded in doing this with their screw system but the look of the clubs will always have to deal with those screws. But another way of making that happen is to use metallic 3D printing. It allows for custom-building every club head and has proven to reach the same strength and contact feeling as the best forged irons. This technology is at the heart of our production system at Grismont and is wonderful for making very precise weight adjustments inside the club head without changing its look.

Lie and Center Of Gravity adjustements made before manufacturing thanks to 3D printing.

A lot of people in the industry (including myself) believe that this is golf’s future, although today 3D printed golf clubs are only accessible to the wealthiest golfers due to the price of the metallic 3D printers (around 1 million dollars). But this technology is growing fast and it won’t be long until we see fully 3D printed sets of clubs for less than a thousand dollars.

Shaft

The shaft is a key part of the club and we see so many clubs where the shaft does not have the flex that it is supposed to have. Controlling the shaft is a long step that requires measuring its frequency and finding the way to properly assemble it. This is where most manufacturers save on costs, as they ask assembly line workers to put the head and the shaft together without much control. Even if you shop at some clubmakers’ workshops, you may get a surprise because controlling the frequency and the swingweight requires time and space (and many amateurs golfers won’t see the difference).

Adjusting the club head, finding the right shaft and properly assembling the whole must be taken seriously for all players, not just the tour pros. In order to do so the production techniques must be improved to allow full customization, and distribution must offer a proper fitting experience to everyone.

Distribution

The production of custom golf clubs requires clubmaking techniques whereas the distribution requires clubfitting techniques. Clubfitting is the science of finding the right golf clubs for a person while clubmaking is the science of building the club once we get information from the fitting.

We are dreaming here of a future where all golf clubs are custom-made for their owner. In this case distribution is not about finding a retailer who will sell ready-to-play sets of clubs but about finding a way to organize fittings for golfers all around the planet.

Today manufacturers have employees all over the world to do fitting events where golfers can try the brand’s clubs and then get custom-fit. The big limit on this is that the fitting will be influenced by what the brand offers. Some golfers may not get the clubs that they need because the manufacturer simply doesn’t make such clubs.

One good way to get custom-clubs for the majority of golfers would be to train people inside the golf courses. Golf course owners can train one of their employees so they are able to do fittings and then sell the fitting informations to the manufacturers. This would be cheaper for the manufacturers than having their own people everywhere and create additional revenues for the golf courses. On top of that a brand agnostic approach will be beneficial for the golfers who will get exactly what they need regardless of who makes it.

Communication

These days more than ever, it is essential for any brand to create and maintain a conversation with the world. Sadly golf club manufacturers are still doing it the old way: they offer standardized (=bad) products and invest millions in marketing hoping that products will be sold. This way worked during the past decades but not anymore. Nowadays a bad product won’t be a success even with millions in advertising; but the good thing is that a good product will sell itself.

Organizing events, sponsoring players and advertising about new products will always be important, but getting new clients will come less and less from this and more from a good product with positive word of mouth. To enhance this word of mouth the manufacturers must master their customer relationship and spread transparent information throughout golfing communities.

When the average golfer sees Jason Day explaining why the new TaylorMade’s fairway wood is so good, they know that what they see doesn’t apply to them. Encouraging real golfers to tell their stories where they had improved their games thanks to new clubs that have been custom-made for them would be a much cheaper operation with a higher engagement rate.

I’m intentionally mixing here communication and marketing, as both refer to the growth expenses of the manufacturers. These expenses represent today about 80% of their total budget and can be decreased a lot, leaving much more to put into efforts for building better (beautiful and custom-made) clubs.

Preparing for the next step

The golf equipment market is in bad shape because the customer side has changed but the manufacturer’s has not. When I see the bigs (Nike, TaylorMade) giving up on the battle, I see a major opportunity to build a new business model that will be profitable and sustainable inside this new economy.

This new business model must put less emphasis on the high sponsorship fees for the world’s top players and more on sharing real stories. Real stories of golfers who have improved their games thanks to the commitment to put custom golf clubs in all hands.

Technologies had never grown as fast as they do today, and this will help the manufacturers to reach this goal of custom-making clubs. 3D printing already allows us to build the most precise clubs heads and in a few years will be cheap enough to be available to anyone. Robotics can be developed to analyze shafts and properly assemble clubs. Advanced video analysis can get fitting information faster than human fitters. All these new techniques will create a world where a golfer just has to hit few balls in front of the sensors, choose the club’s look and two weeks later get a perfectly fitted sets of clubs, in their own style, for less than a thousand dollars.

Mastering distribution is another key factor of success and using the already existing golf course networks to get fitting information from golfers all over the world could be a way to do it for a reasonable cost. This would also be a way for the golf course owners (who are also struggling) to find additional revenues.

This battle will define who wins on the golf club mass market. There may be a few other smaller participants, but many will die in this war. The low-cost/second-hand market will survive because a lot of people will need cheaper clubs to start playing the game or simply won’t be able to afford more. The high end market will also continue to exist because many golfers will always want to step up.

But for the vast majority of golfers, who are passionate about the game and are willing to pay a decent price for good equipment that will improve their game, the offer must change in order to meet their new expectations for custom-made products with new aesthetic options.

Golf is changing, not only in the equipment business but as a whole. The US and European golfing population is decreasing while it is growing around Asia. Urbanites have less and less time and space to play. All these factors are changing the way to do business and new models are still waiting to be found.

On my part, I believe that the factors of success have changed. The next number 1 manufacturer won’t be the one who pays the highest sponsoring fees but will be the one that uses the best out of the new technologies to serve the real golfers interests in a cost efficient manner. I can’t wait to see who will win this battle but in my opinion the future market leader is yet unknown.