Nike Golf opting to no longer manufacture golf hardware is classic case of cost cutting by a major corporate brand
There is one very good lesson to take from Nike’s decision to “transition out” of the golf market: don’t take the golf consumer lightly.
Amid all the loud noises circulating online about Nike turning their backs on golf (even though they will still produce apparel and shoes) the one constant few people opted to explore was exactly why they have jumped ship, exactly 20 years after getting serious with golf via the signing of Tiger Woods in 1996.
I’ve been a golfer since I was about nine years old, and have worked in the industry for 16 years, yet I only know of one friend who plays Nike clubs.
Read through the collection of opinions on Facebook and there’s one very obvious constant that, for me, stands out like a sore thumb – hardly anyone bought Nike Golf equipment. It’s little wonder its golf brand has lost around $90m in turnover in the last two years.
Nike, the brand, just recently enjoyed a record sales year of $32b. The $90m loss on its golf division is loose change. Wrapping up its golf hardware line is a classic case of the brand cutting its losses and focussing its efforts on improving the already massively successful parts of its business. With golf, they were routinely swimming against the tide, having entered a market that was being dominated by what are, essentially, niche brands.
The problem with Nike’s golf business was that it never quite became a serious competitor. In golf, you need golfers to talk about your products amongst themselves. Big Bertha, M1 and M2, G30, AP2…the list of recognisable golf product names goes on. Nike didn’t have that. They needed to create a product that became synonymous with the Nike brand, along the same lines as 2-Ball putters (Odyssey) and Pro V1s (Titleist). They needed to create that, stick with it, and grow it, so that it became instantly recognisable, trustworthy and safe. Golfers are fickle, and they tend to be fiercely brand loyal. That’s why the golf equipment industry is a seriously tough market to crack. And even when you do crack it, you’ve got to work hard to keep your consumer loyal.
Money is precious in today’s society, and consumer trends need to be understood. Many of the arguments about Nike eventually morphed into ‘what’s wrong with golf?’ debates, which is to be expected considering the news. After all, Nike is one of the world’s biggest brand names - if not the biggest - so such an iconic brand turning its back on our sport was always going to hit home with golfers, and not just keen golfers, but all golfers.
The one recurring theme from the debates Stateside was the cost of the game. Unfortunately, because Nike has left, the market for hardware goods is now slightly smaller, which means most brands will not even consider lowering prices. The consumer is unlikely to benefit from this move. The game as a whole will need to seriously consider its pricing, at some point, in order to engage with more players.
When a new course is unveiled, people don’t complain about how they won’t have time to play it. They complain about the price. Time is rarely a major stumbling block.
But that’s a side issue. The sad fact is that many good people have lost their jobs because of Nike’s decision, many of them hard working individuals who were completely in love with the game. If only their employers had shared that love.