Dick's out of the golf business all together?

[Slowcelica]

$500 for used set, $30-$35 per round are still a lot of money.    Typical folks in their 20s, 30s can't shell out that kind of money when they are trying to make a living and raise family.  Nor can they spend 1/2 a day to play golf so often.  This effectively makes golf a hobby for a limited crowd (aging/retired folks with some money to spare).   I am generalizing of course but you get the point.

The last economy boom (housing bubble) & Tiger Wood phenomena created a lot of excess in the golf industry.   I see continuing consolidation (closing golf courses, smaller companies being acquired, ...).   Dicks is a part of that besides their inept golf business model (people's buying habit these days do not support their pricing strategy).

$500 for a used set where are you buying your clubs at? I have a used set of clubs I'll sell you. My first set cost me $180 that's putter, bag, driver, irons brand new 3 years ago, I could still be playing with those clubs too, they were fine, I just got the itch and wanted new clubs. It cost me $8 to play at my muni courses because I walk, and have a discount book that gives me twilight rates during the week, if I don't use it, and I walk it's still only $15 still $30 with a cart.

The problem with golf today is simple, it is the market correcting itself, its economics 101. Golf companies are saturating the market with new clubs every 6 months, most people by clubs every couple years except for club ho's. That creates low demand and high supply, which means what? Price should go down, heck a few months ago you could by a brand new bio-cell driver was $300-$400 for under $200. While at companies like Dicks the prices really haven't dropped if at all, so what are most people doing? Buying from the less expensive options, ebay, amazon, online retailers, etc... so that is putting companies like Dicks out of business. Same reason GM failed a few years back, they refused to changed lets keep pumping out gas guzzling trucks, and cars while the other companies restructure to create more economic fuel efficient cars while paying for a work force that doesn't contribute to the company anymore. The market will correct itself, and prices will come down, or there will be fewer companies in the industry.

[rkim291968]

Quote:

Originally Posted by rkim291968

$500 for used set, $30-$35 per round are still a lot of money.    Typical folks in their 20s, 30s can't shell out that kind of money when they are trying to make a living and raise family.  Nor can they spend 1/2 a day to play golf so often.  This effectively makes golf a hobby for a limited crowd (aging/retired folks with some money to spare).   I am generalizing of course but you get the point.

The last economy boom (housing bubble) & Tiger Wood phenomena created a lot of excess in the golf industry.   I see continuing consolidation (closing golf courses, smaller companies being acquired, ...).   Dicks is a part of that besides their inept golf business model (people's buying habit these days do not support their pricing strategy).

$500 for a used set where are you buying your clubs at?

I was quoting another poster who mentioned buying $500 used set.   But they are out there.

[David in FL]

I think there were at least one response in this thread that was specific about pricing.   A poster noted their high mark up ($7 item being marked up for $30 - or something like that) price.   That's what I was referring to and see whenever I went to Dick's.   That kind of mark up does not work when most of the items can be ordered through E-bay at lower price.    I can't say much about their non golf item pricing.

So you don't know what their "pricing strategy" is, nor do you know how it compares to other brick and mortar retailers in the same line of business. You're just reacting to, and agreeing with some other poster on an Internet forum who may, or may not, know what he's talking about. Does that about sum it up? :-\

[rkim291968]

Quote:

Originally Posted by rkim291968

I think there were at least one response in this thread that was specific about pricing.   A poster noted their high mark up ($7 item being marked up for $30 - or something like that) price.   That's what I was referring to and see whenever I went to Dick's.   That kind of mark up does not work when most of the items can be ordered through E-bay at lower price.    I can't say much about their non golf item pricing.

So you don't know what their "pricing strategy" is, nor do you know how it compares to other brick and mortar retailers in the same line of business. You're just reacting to, and agreeing with some other poster on an Internet forum who may, or may not, know what he's talking about.

Does that about sum it up?

Not really.   It does not take a genious to figure out Dicks can't compete with on-line business unless they have something special to offer.  I must have walked into Dicks at least 10 times and don't remember buying anything worthwhile.   BTW, are you just picking on me?  Others have made similar observation before me in this thread and/or claims that are subjective at best.  What do I owe for you to reply to me two posts in a row?   Do you have anything specific to add to Dick's pricing strategy of your own?   If you have something to say, say it.  Don't try to put someone in a corner for something trivial as this.   It's not like you.

[David in FL]

Not really.   It does not take a genious to figure out Dicks can't compete with on-line business unless they have something special to offer.  I must have walked into Dicks at least 10 times and don't remember buying anything worthwhile.   BTW, are you just picking on me?  Others have made similar observation before me in this thread and/or claims that are subjective at best.  What do I owe for you to reply to me two posts in a row?   Do you have anything specific to add to Dick's pricing strategy of your own?   If you have something to say, say it.  Don't try to put someone in a corner for something trivial as this.   It's not like you.

You spoke about their pricing strategy and inept business model. I was curious to find out if you had the foggiest idea about either. You don't. If you don't like Dick's, that's fine, but if you don't understand their business model, when you make arguments with respect to that model, you may just run into people who do understand strategic retail pricing, and it can bite you in the butt. Lesson learned....? :-)

[Moxie Dawn]

Again, it was me who mentioned Dick's pricing. I have first-hand knowledge of it based on the products the company I worked for sold to Dick's. Specifically, fishing vests sold to Dick's for around $7 which they in turn sell for $35. I have no idea if this is typical retail markup. But because fishing is a fairly common and economical activity (although certainly anyone can go over the top with it), and golf tends to be seen, right or wrong, as being for more affluent people, I wondered if their markup on golf equipment and apparel was at an even higher rate? But I cannot speak to their golf markup. Only fishing vests.

[David in FL]

I have no idea if this is typical retail markup .....

'Nuff said.... ;-)

[Grndslmhttr3]

I know you're being sarcastic, but if you go to Dick's, take up an employee's time, and then buy the same thing elsewhere, to me (I, personally) think that would make you a bit of a dick.

I only took a few minutes, didn't even speak to any employees, so it's all good, right? FWIW I did feel a bit guilty afterward.

[JP golf]

The problem with golf today is simple, it is the market correcting itself, its economics 101. Golf companies are saturating the market with new clubs every 6 months, most people by clubs every couple years except for club ho's. That creates low demand and high supply, which means what? Price should go down, heck a few months ago you could by a brand new bio-cell driver was $300-$400 for under $200. While at companies like Dicks the prices really haven't dropped if at all, so what are most people doing? Buying from the less expensive options, ebay, amazon, online retailers, etc...

True.  Dick's used to go with a store-within-a-store approach trying to get "experts" (PGA pro's- for golf) hired in each section so that it was like a specialty store for each section including golf.  Personally, I like Dicks sporting goods and the golf section.  I think a big issue for them comes in holding so much inventory at their stores.  However, I'm not the expert.  I do think it hurts as they get further away from their specialty store-within-a-store approach.  I liked that model and strategy and always thought they could have done a better job selling that strategy.  Every season starts at Dick's?  Not golf...  not now....

[Moxie Dawn]

'Nuff said....

I am happily admitting my ignorance of the topic. If you have actual information, please spout off.

[Abu3baid]

I have been into the store on a couple of occasions and I remember distinctly saying to my self each time, hey I can get that at Walmart cheaper.. Every single time! So, yeah their pricing strategy sucks, doesn't take a genius to figure that out!

[David in FL]

I have been into the store on a couple of occasions and I remember distinctly saying to my self each time, hey I can get that at Walmart cheaper.. Every single time! So, yeah their pricing strategy sucks, doesn't take a genius to figure that out!

Ok, time for a little (very little), business 101.... Why do you think that you can buy stuff cheaper at Walmart than at a lot of other stores? Does the "pricing strategy" of all those other retailers "suck" because they don't price everything the same as Walmart?

[boogielicious]

Quote:

Originally Posted by Abu3baid

I have been into the store on a couple of occasions and I remember distinctly saying to my self each time, hey I can get that at Walmart cheaper.. Every single time!

So, yeah their pricing strategy sucks, doesn't take a genius to figure that out!

Ok, time for a little (very little), business 101....

Why do you think that you can buy stuff cheaper at Walmart than at a lot of other stores? Does the "pricing strategy" of all those other retailers "suck" because they don't price everything the same as Walmart?

For some items, big box stores buy a lower cost/quality version of the same product.  This may not apply to golf equipment, but it does for appliances, plumbing fixtures, etc.  Retailers will vary pricing to draw customers into the store with some products being low and others with more margin.  They also look at their typical customer to create pricing. Dick's was a little higher end in terms of customer base than a Walmart type retailer.

The other factor that others have not mentioned was store location strategy.  Many companies, including Dick's, have a model on where to place stores.  Because they also own Golf Galaxy, they must incorporate those locations into their model.  In my area, the Dick's locations and Golf Galaxy are well separated.  So they aren't internally competing.  But they are competing with Golfsmith and Golfer's Warehouse.  Both those locations have much more inventory and better hitting bays.  So if you are going to a store specifically for golf, you would opt for the specialty store.  Perhaps Dick's is recognizing this.

[atb5079]

To me its always been the prices that have been the problem with Dick's. How can they possibly expect to attract the casual golfer or a newcomer when you cant get a pair of shorts for under $50 or a shirt for under $60. I was just there 2 weeks ago and I couldnt find one shirt or short under those prices, apart from the few on sale that were 3XL. The clothing really is not that great of quality from all the popular vendors. Its mostly 100% polyester and made for dirt cheap across the world. Thats why I do almost all of my golf apparel shopping at department stores. IZOD makes some pretty nice stuff that is significantly cheaper than the UA, Adidas, Nike, Puma bullshit sold at Dick's. The PGA Tour brand is also very cheap relative speaking and its all pretty much the same. I think that's really where they are missing. Just too damn expensive for clothes that really dont warrant it enough. And obviously demand isnt there enough to warrant the prices either.

[David in FL]

For some items, big box stores buy a lower cost/quality version of the same product.  This may not apply to golf equipment, but it does for appliances, plumbing fixtures, etc.

Not so much with soft lines (clothing) or sporting goods.  Appliances, certainly.

They also look at their typical customer to create pricing. Dick's was a little higher end in terms of customer base than a Walmart type retailer.

Not as much as you might think.  A big piece is product mix, but the pricing of those products has virtually nothing to do with customer demographic.  Product mix will even change from store to store, but pricing of those products will be pretty consistent, subject to some seasonality and inventory based adjustments.

Let's give a big hint to the class.....

How does the price that Walmart pays for any given product compare to the price that Dick's, or another retailer pays?

For extra credit......

Why is it often the kiss of death to a small to mid-size manufacturer to get their product into Walmart?

[newtogolf]

Since this discussion has morphed into why golf is "shrinking," just some thoughts from someone completely new to the game.

Brown Coast is hitting on golf's image problem. Golf has always been seen as a game for rich white guys. Whether that is fair or not, there are certain things which feed that image. The $500 club, for example. I look at $500 and see a car payment or half the mortgage payment or two months of power and water. Someone like me is never going to spend $500 for a club, EVER. And I agree with BC about the whole thing. Why in the world would a single golf club ever cost $500?

Cost for a round is another example. http://golfcrandon.com/rates/ So those are the rates at Crandon. Again, a person like me is looking at that $30 9-hole twilight rate and thinking that might be something I could do a couple times a month. It would be easy to say that, playing no more often than that and no more holes than that, why bother at all? And I think there are a lot of people who see it that way.

But mostly it's the economy. There are still too many people out of work, or working a bad job, or working extra hours off the clock trying to keep the job they have. Who has time for golf? Who would dare take a day off work to play a round? Only rich guys. And there we go again, feeding the image that golf is only for some people and not for everyone. I mean, why do you think every third world country on the planet has a great soccer team? Because all you need is a patch of dirt and a ball. Golf is a game that requires more AND more expensive equipment, larger space to play, and other things which put it out of a lot of people's affordable recreation budget.

So it's a lot of things, but it's a cycle. Once the economy is truly stable again, more people will play golf again. And it will help as more courses and more golfers themselves come up with new ideas and promotions that introduce new players.

If you take extreme examples of any sport / recreation you can make a case for why it's an elitist sport.  No one is required to buy or own a $500 driver to play golf.  No one has to pay $300+ to play a round of golf.  $500+ clubs and $300+ green fees are at the extreme, it's like saying car market is geared toward rich white guys because a Ferrari costs $250,000+.

Go online or even to Dick's and you'll find 6 month - 2 year old drivers for $100.  Do a search for local golf courses and find one in your budget.  Most people get paid time off (PTO).  If you take a day off to sit around the house you can take a day off to play golf if that is a priority to you.  People spend money on what's important to them, they will spend $100+ to go to the movies, sporting event, or dinner at a restaurant but then complain that a round of golf at their local muni costs $30?

It's become fashionable to bash golf as an elitist sport but that's very myopic and imo a lame excuse.  I'd rather people say golf is too difficult to learn or not enjoyable enough for them to spend money on than this constant whining about how much it costs.

[iacas]

If you take extreme examples of any sport / recreation you can make a case for why it's an elitist sport.  No one is required to buy or own a $500 driver to play golf.  No one has to pay $300+ to play a round of golf.  $500+ clubs and $300+ green fees are at the extreme, it's like saying car market is geared toward rich white guys because a Ferrari costs $250,000+.

I agree. Just about every sport can cost a lot of money if you play it at the higher levels.

Nobody ever mentions the $12-for-24 balls you can buy at Dick's, or the $99 drivers, or the $399 set of irons (or even a complete set of clubs).

[jamo]

Let's give a big hint to the class..... How does the price that Walmart pays for any given product compare to the price that Dick's, or another retailer pays?

Lower. Wal Mart has the size to negotiate extremely low wholesale prices because they can double/triple/quadruple/etc. the product maker's bottom line just with their business. [quote name="David in FL" url="/t/76663/dicks-out-of-the-golf-business-all-together/30_30#post_1043703"]For extra credit...... Why is it often the kiss of death to a small to mid-size manufacturer to get their product into Walmart? :smartass: [/quote] Because then they are completely beholden to Wal Mart for a huge percentage of their business. Wal Mart can demand lower and lower prices, new models, etc.