On August 3rd, Nike, the sports behemoth based in Beaverton, OR, announced it was leaving the golf equipment business. The ripples of that decision are still being examined.
What started in 1999 with Nike’s aggressive move into the golf ball sector has now come full circle with the company’s surrender to reality - the brand never really caught the fancy of golfers - most especially core players who play 50+ rounds per year.
Nike signed Tiger Woods early on in his professional golf career and then later added another former number one world player, Rory McIlroy. What both of these golfers do now on the equipment side will clearly be of interest to those who follow the industry and to consumers in general.
Given the suddenness of the decision, I reached out to one of the foremost experts in the golf equipment industry - Tom Wishon - to get his assessment and what the potential fallout will be on a host of fronts. His comments are indeed sobering on the challenges that lie ahead for golf and for those remaining companies who provide equipment to those playing the game.
With more than 35 years of experience in the field, Tom Wishon Golf Technology is recognised as one of the industry leaders in the research of golf club design, performance and clubfitting technology. Wishon R&D has been at the forefront of the golf industry, including the development of more than 50 golf club design technology firsts, as well as countless discoveries in the science of golf club performance for golfers.
Having begun his golf equipment career in 1972, Tom Wishon has designed over 300 original and innovative clubhead models, more than any other single person in the 500 year history of the game. His clubhead designs represent more than 50 different technology firsts.
He is the also the author of 9 books within the field of golf club design, performance and clubfitting, in addition to hundreds of equipment related articles written for virtually every golf publication in the golf industry.
Two of Wishon’s books, The Search for the Perfect Golf Club and The Search for the Perfect Driver qualified for best-selling status and won successive Book of the Year awards in 2006 and 2007 from the International Network of Golf, the oldest and largest organisation of golf industry media professionals in the world. Shortly after they were published, both books became a part of the curriculum for membership training in the PGA’s of Sweden, Great Britain, Belgium and the Netherlands.
He is considered the ‘go-to guy’ by the equipment editors for many of the major consumer golf publications in their search for honest, marketing-free explanations about the technical performance of golf clubs. Jim Achenbach, former equipment editor for Golfweek magazine has said, “Tom is the smartest person in the golf industry when it comes to golf clubs.”
Matt Ward: Was Nike’s decision to leave the golf equipment business expected or unexpected given their deep pockets in all sports categories?
Tom Wishon: I think those who have been very close to the equipment business could obviously see that Nike had not been able to push their way into a significant position in the industry compared to the other big OEM companies with regard to market share. And it had been a decent number of years that they had been trying to be a major player in golf equipment. Since their real forte is, and has been, apparel, and since that part of their golf venture had been doing pretty well, it just made sense for them to bow out of the hard goods and maintain a singular focus in golf in the apparel side. For Nike, it just does not match with the perceived company philosophy to be a bit player in a segment of an industry. I am sure they have an internal pride that if they can’t push their way into a top position, it’s not worth continuing to try.
MW: What lessons should the major equipment companies such as Taylor-Made, Callaway, Titleist, Ping, among others learn from Nike’s exit?
TW: I really don’t see much in the way of direct lessons to be learned from this. Perhaps to say that given the state of the game and the equipment industry today, don’t expect to be able to maintain a billion dollars in annual revenue because the support from the market in the game is just not there to achieve that. These companies can all think that they’ll inherit the business Nike gives up, but I am not sure that will amount to much ,given the way golfers are steadily retreating from buying as frequently as they did.
MW: What was Nike’s chief failure to succeed in golf equipment?
TW: They never really had any product introductions that truly made the impact that the other big golf companies have had at occasional times over the course of their tenures in the industry. They made very good equipment, but they never really were able to technically innovate in a significant enough way, either from a real technical innovation or an image grabbing innovation. The swoosh, style and cosmetics they are known for wasn’t enough to impress enough golfers to flock to their models.
MW: What relevance / value did having Tiger Woods endorse the product line and most recently with Rory McIlroy?
TW: There’s always been this feeling in the equipment industry that no tour player actually sells more clubs for you, but if you don’t have any significant tour players on staff playing your equipment, you can’t expect to be a major player in the business. Most golfers looked at Nike’s association with Tiger and Rory and simply believed it happened because Nike had the huge money to be able to buy these guys, not that it happened because Nike impressed these guys with the their ability to innovate and make the best golf clubs.
MW: It appears the overall golf equipment industry is going through various seismic shocks - what other fallouts do you see happening?
TW: Well the Golfsmith bankruptcy is related to this, but on the distribution side. There’s just not nearly as many golfers making purchases or as often as there were, so the market is shrinking. If you don’t have as many people sitting at the table, you can’t keep pushing the same amount of food out there because there are not enough to partake of it. You won’t see any more of the big companies bow out, but I think you’ll see more fringe players in the industry quietly bow out.
MW: How does Nike’s exit benefit golf consumers - or does it?
TW: It has zero effect. It’s neither a positive or negative effect on consumers. There are still plenty of equipment options out there even though there are not as many golfers ready, willing or able to buy.
MW: What kind of golf equipment universe will we see in 5-10 years from now?
TW: Definitely smaller. There is not one positive thing that is going on in golf to say that the size of the buying market for golf products will be able to remain the same, much less to ever hope to increase. There are 2 million or so fewer golfers. The core golfer group that accounted for 70% of all purchases is not buying new equipment with the same frequency they did before, both for financial security reasons as well as feeling like the new equipment is not any better than what they bought 2, 3, 5 years ago. And worse yet, the Millennials are not taking up the game and not playing. We have no new blood coming along to pump new life into the commerce of the game.