By Gary Van Sickle
The most shocking golf news of 2016 wasn’t that Tiger Woods missed all of the major championships. It was that TaylorMade, the apparent king in the golf equipment industry, wasn’t generating enough revenue so its owner, Adidas Group, began actively seeking a buyer for TaylorMade, Adams Golf and Ashworth.
Adidas chief executive Herbert Hainer explained why his company wanted to unload TaylorMade: “Younger consumers are staying away from the game, and it isn’t popular in emerging markets like China and India.”
In addition, the golf industry has been hurt by discounting. TaylorMade led the way by flooding the market with new products and increasingly shorter product cycles, and it’s still at it, recently announcing all-new versions of its M1 line and last year’s all-new M2 line. Last March, Forbes magazine reported 18,000 listings of TaylorMade drivers for sale at eBay.com.
TaylorMade’s possible sale and Nike’s hasty retreat from golf equipment are not good signs. Mainstream media don’t address this topic because they rely on the big manufacturers for advertising and those manufacturers do not like negative news. How did TaylorMade get to this point? I talked with a big-box golf equipment store employee who agreed to share his thoughts based upon the condition of anonymity.
Gary Van Sickle: Is TaylorMade’s potential sale a bad omen for the golf business?
Anonymous golf retailer: I don’t think it necessarily means gloom and doom or is a death knell for the golf industry. But it’s certainly a wake-up call. Even a big company like Adidas doesn’t want to bleed money. They don’t see much potential growth.
GVS: How surprising is this development, given that the public perception was that TaylorMade dominated the market because of its PGA Tour saturation?
AGR: That was just perception. What threw an additional monkey wrench into the whole thing was TaylorMade spending $70 million to buy Adams Golf, which was going to sue them for using its slot technology. Adidas is slowly choking Adams to death, so now it’s stuck with two money-losing brands.
GVS: Where did TaylorMade go wrong?
AGR: You can’t convince consumers to spend $400 or $500 on a driver and then 15 minutes later say, “We’ve got a new driver that’s even better than the one we just sold you, which, by the way, is now available at half the price you paid.” TaylorMade did that more than once. It felt like bait-and-switch. TaylorMade had years when it came out with three, four, five drivers in a season. What do we do as retailers if a company comes out with a new technology that trumps what we already have and we’re still sitting on $50,000 worth of clubs that are now obsolete? That really hurt us. Even worse, that hurt the whole industry. It created a what’s-next consumer. When something new came out, the consumer said, “That’s great… but what’s next?” TaylorMade flooded the market with new products and shortened the selling cycle, forcing other companies to do likewise. For example, the Launcher was the best driver Cleveland Golf ever made when it came out (in 2003), but people were like, “This is great… but what’s next?” There is no next; this is it. However, Cleveland was forced to do something else because of the consumer mentality TaylorMade helped create. Cleveland made the Hi-Bore XL next, and it was no comparison to the Launcher.
Gary Van Sickle has covered golf since 1980 for Sports Illustrated and Golf.com, Golf World and The Milwaukee Journal.
Coming Wednesday: Marketing mistakes and the bleak future of big-box golf stores.