There has been some discussion recently about golf’s equipment replacement cycle. Some have argued that manufacturers have accelerated product introductions to the point where golfers are tuning out and are choosing not to replace their equipment as frequently as they did in the past. But NGF data and analysis contradicts this view.
Look at drivers for example. The replacement cycle for drivers hasn’t fundamentally changed in the past 12 years. Yes, there was a peak in total domestic sales around 2005, which was followed by a significant decline. But that’s different than the replacement cycle. The number of drivers sold per 1,000 core golfers has actually increased over that time. That’s right. Core golfers are buying more drivers, not fewer. So why have total driver sales declined? Simple. There are fewer golfers.
Let’s think about why people buy golf equipment.
- They just want to (Self-Gratification) – they want the shiny, new, latest thing, and it makes them feel good.
- They’re followers (Conformity)– they eyeball their buddy’s new club and they become envious. Easily fixed. Go buy one.
- They believe it can help (Aspiration) – an easy cure, or an incremental improvement. These are technology buyers. And if improvement doesn’t happen, they mostly blame themselves, not the manufacturer.
- They need to (Practicality) – their driver is just too old and beat up. It’s too small. It’s embarrassing.
There are other inspirations for equipment purchases, but these are the most important ones. Is technology and innovation important? You bet. They can get a company increased market share, and if they are big enough they can move the whole market.
Consider golf equipment replacement cycles for a minute. There are two kinds: a natural cycle, and an innovation inspired cycle. The natural cycle has been around forever, and for avid golfers it’s probably something like 2 or 3 years for drivers, 5 or 6 years for irons, etc. Now there are plenty of exceptions to the natural cycle. Like Nicklaus using the same MacGregor 3 wood for 15 years, or Ben Crenshaw’s old Wilson 8802 putter. But for the majority of equipment buying golfers, the natural cycle and the motivations mentioned above are what drives most sales.
Then there is the innovation driven cycle – steel shafts, perimeter weighting, metal woods, titanium, high performance lightweight shafts, etc. In shoes you can point to soft spikes. In shirts it’s fabric. In bags it was lean stands. These are full-replacement cycles we’re talking about here, not at all like the incremental “natural” cycles. When the equipment business is in a full-replacement cycle it’s great. But when it isn’t, the world doesn’t end.
Now it makes sense that equipment replacement cycles (natural or innovation inspired) will be affected by the economy and consumer confidence. Coming out of the recession of 2008/2009, golfers were shaken like everyone else and that certainly lengthened the natural replacement cycle a little. But a slowly recovering economy, along with incremental technology advances and innovation, is helping to pull the business out of those doldrums. Fairway woods and hybrids are a great example (See Figure 1). In the early 2000’s, sales of fairway woods and hybrids increased steadily because many golfers replaced their long irons with these types of clubs (an innovation inspired replacement). After a drop in sales during the few years around the recession, sales climbed again as manufacturers incorporated more technological advances into these clubs.
So let’s not be so quick to declare that the equipment buying cycle has ended. Or that we are entering a new era of slowed down equipment purchasing. In fact, despite a dip during the recession, overall club sales per thousand core golfers has increased over the last decade (See Figure 2). The issue is that the number of core golfers has declined by about 25% since the turn of the century. That means there are significantly fewer equipment buyers… and that’s seriously worrisome to more than just the manufacturers.