One of the leading specialty golf retailers in the US, this company is using a multi-channel approach, expanding its footprint and putting an emphasis on vendor relationships to tackle a tough market. Known as the one of the best golf specialty stores in the US, Edwin Watts Golf is a multi-channel retailer with retail stores, an online store, and a catalog that is considered to be a leading source of information on golf equipment and apparel. The company has 72 stores in 10 Southeastern states. Stores range in size from 750 square feet to 21,000 square feet.
The company was established in 1968 by Edwin Watts and has since won more than 80 selections as a top 100 golf shop in the US by Golf World Business. The company focuses on premium golf equipment, apparel, and sports supplies.
“We emphasize premium because we are very well known for our in-store service. We are the industry leader when it comes to the technical IQ of our associates,” said John Watson, chairman and CEO. “The average tenure for our store managers is 15 years, and our strategy is built around the competence of our staff.”
The target customer demographic for Edwin Watts Golf is men, 35 year and older. It is an upscale clientele, as two-thirds are professional and managerial with an income in excess of $75,000 per year. The company has a loyal customer base, with much of its sales coming from repeat business.
One factor affecting Edwin Watts Golf is the overall decline in the golf segment in the last year. Since the start of the decade, the number of rounds played per year is estimated to be down by 5.8%. The only things keeping the number of rounds from dropping even more is the fact that daily fees have dropped at golf courses looking to stem the tide.
“There were 139.5 closures of golf courses in 2009, so there is a lot of pressure on the courses themselves. As a result, that puts pressure on golf companies because people are playing less,” Watson said. “This business goes with how people feel about their net asset value and their wealth factor, so the last year hit the golf industry pretty badly. Equipment sales are certainly down by double digits across the industry.”
The recession has also forced a decrease in the number of off-course retail golf specialty shops, which is the category Edwin Watts Golf fits in. Watson said in 2008 there were 1,479 US off-course retailers, and in 2009 that number was down by 17%. The good news for Edwin Watts Golf, however, is that the company has actually managed to grow its physical footprint in the midst of these conditions, going from 68 stores in 2008 to 72 in 2009.
What the company has done since 2008 is review its inventory levels and reorganize stores. The company reduced inventory levels by double digits not because of the economy but to give consumers better choices. The company invested in improving the basic infrastructure of stores, created better sightlines for merchandising, and entered into partnerships with vendors to improve brand presentations in what Watson called booth space.
“Each of our top vendors gets a booth area in our stores, and we made a major effort with vendors to improve the graphical presentations of their individual booths,” Watson said. “We then started running frequent feature presentations and introduced the concept of front door foyer displays and different presentation areas around the stores, classic merchandising for a specialty retailer. It is a much more organized way to feature brands in partnership with our OEMs.”
One interesting factor about the golf business is the large amount of new product releases into the market. Watson said that makes change a commonplace occurrence inside the company’s stores. The front door can change anywhere from every five to 10 days at Edwin Watts Golf. Moving toward the classic specialty retailing tactic of emphasizing display and branding helped boost customer awareness of the latest items in the store.
Taking the right shots
Although catalogs are becoming a less popular retail channel because of the cost involved in producing them and the presence of the Internet, it is still a big part of Edwin Watts Golf because of its catalog’s status as a buyer’s guide for the industry. Pro shops of all sizes around the country have its catalog, so Watson said the company sees it not only as a sales tool, but also an essential piece of marketing the Edwin Watts name.
“We take some of our co-op funding and use that to develop our catalog capabilities. We’ve stuck by the catalog because it’s so multifaceted in terms of our marketing message,” said Watson. “In addition, our loyal customers like it and appreciate it. Catalog sales are down a little bit, but we’ve managed that with light reductions in the size of the catalog.”
The company has worked to improve its database management capabilities in the last two years as well. It introduced CRM technology, and the company now has a better idea of who its customers are and understands their habits.
Internet business is another area where Edwin Watts Golf has focused plenty of resources. For the industry as a whole, as of 2007, more than 8% of golf balls and 21% of clubs were sold on the Internet, and that percentage has continued to rise.
The difficulty of the Internet is that many companies that weren’t traditional golf companies got involved in Web-based golf business. Their emphasis was on discounted products and clearance items, making it a competitive area driven by low prices. However, the recession actually stalled online golf sales, and big box sporting good stores and specialty retailers like Edwin Watts now appear set to take over the online golf market.
As the company moves forward, maintaining its industry-leading in-store expertise, getting closer to vendor partners on the premium side of the business, and looking for opportunities to acquire small independent retailers to add to its store count are major parts of the Edwin Watts strategy. In fact, the company is planning four new stores and a minimum of six acquisitions in 2010.
“We’re looking for good locations with good store infrastructure. We have the best inventory in the industry, and by locating the right stores, we can add strategically to our portfolio geographically,” Watson concluded.
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