There are multiple reasons as to why the big boys have had enough.
Decline in Interest
The game of golf has received an enormous boost of exposure in the last month or so due to its inclusion in the Olympic Games – irrespective of how botched and mishandled it was. Because of this, new avenues of development are beginning to grow in Asia.
In Europe, steps are being taken to widen the appeal of golf to new demographics, most notably to women and children. However, in the US, despite the increased exposure, the numbers are surprising. Over the last decade or so, from 2002 to 2013, the number of golf players has decreased from 30 million to roughly 24 million.
The drop in golf players may not be anything drastic, but given the fact that the US accounts for half of all players and courses in the world, this dip is creating a huge headache for manufacturing companies.
Nike was hit hard by the declining numbers. According to Business Insider UK, last year, sales within Nike’s golf division fell 8% to $706 million. Declining numbers of participation means a potential loss of sales, and as such, the sports retailers will see other avenues such as athletics and basketball as more appealing areas of growth and revenue.
Nike and Adidas were pretty late to the party to begin with. Golf has always been a little bit different to other major sports. One might wear a football shirt just to lounge around the house or go to the gym in. The same generally applies for basketball, rugby and baseball. These are the markets that Adidas and Nike have cornered – the casual sportswear market, on top of which the manufacturing of specialised equipment sat like garnish.
Golf already had established equipment retailers like Ping, Callaway and Titleist occupying the market and drawing potential revenue away from the big boys. Therefore, perhaps Nike and Adidas simply did not see the need to go head to head in this way. The golf market is, to put it bluntly, engaged in a race to the bottom. Brands are locked in a battle that ignores profit margins and the big boys will not participate in this sort of game.
The Rise of Cycling
Meet the M.A.M.I.L. Have you seen him? The latest threat to golf is the Middle-aged man in lycra. He comes from the same demographic and has the same disposable income, but his focus has changed. Cycling is “the new golf” for middle-aged men.
“At best, we have to say that the US golf market is static, while at the same time we have seen traditional golf markets across North America and Europe being hit by the rise of cycling,” says Prof Chadwick.
As reported on the BBC, more than two million people across the country now cycle at least once a week. In the USA, the pedal-powered renaissance is apparent: The National Household Travel Survey showed that the number of trips made by bicycle in the U.S. more than doubled from 1.7 billion in 2001 to 4 billion in 2009.
It doesn’t stop there, because from 2000 to 2013, bicycle commuting rates in large BFCs (Bicycle Friendly Communities) increased 105%. This is way above the national average of 62%. Even in none BFC areas, the increase was 31%. These statists make no bones about the fact that cycling seems to be replacing golf as the great middle-age pastime.
The Decline of Tiger Woods
The decline of interest in golf has been a long time coming, if Google Trends is anything to go on:
— Tim Crow (@synergytim) 4 August 2016
In amongst the trends, Tiger Woods managed to keep a fairly consistent level of interest over the years, until his interest skyrocketed, for the wrong reasons mind you.
Though Nike introduced their first golf line in 1984, business for the US firm only really began to take off when they signed a 20 year old Tiger Woods in 1996, around whom a huge advertising campaign was launched. For a long time, he was the centre of the Nike golf universe. A study carried out by the Tepper School of Business found that in a decade of sponsoring Woods, Nike’s golf ball unit alone added $91 million in additional revenue and $60 million in extra profit. When Woods endorsed Nike, 4.5 million new customers followed, according to the study. But when Tiger Woods took a month-long hiatus in 2009, Nike’s sponsorship sales slumped quite considerably.
Rory McIlroy was the successor to the throne but the Northern Irishman’s style seems to be at odds with the brands wider values. I love Rory, but his lethargic, albeit genius style was never going to push people the brand.
In general, golf seems to be shifting in the eyes and mind of the world’s population. Nike and Adidas have now realised that they can’t win at golf. Our market is far too multifaceted for one brand to dominate and this is a problem for the “in it to win it” mentality of Nike and Adidas.
In the immortal words of Ricky Bobby “if you ain’t first, your last.” Nike know this and they’re prepared to relegate their slogan accordingly.