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October 2020

Shiny Objects, or Building Loyalty and Boosting Profits?

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By David Gould

Technology marketed to golfers and considered a potential source of industry discomfort used to be things like non-conforming equipment—self-correcting golf balls, drivers with melon-sized heads or irons with grooves too deep or too close together.

The question marks prompted now by consumer-facing golf tech involve its general proliferation, including the possibility that course operators will feel pressure to continually invest in it. There’s also a feeling that too many tech gadgets could slow pace of play and even erode golf’s pastoral simplicity, part of its original charm. All those newcomers showing up to play this summer may be wishing to leave machinery behind, along with their Covid-19 stress.

Then again, brilliant new inventions may just enhance the golf experience for all.

When technology serving this market tended toward B2B—management software, POS systems, computerized handicapping, and so forth—a course owner who was slow to adopt didn’t have to defend such reticence to customers. When tech trends shift toward consumer-serving products, there can be less leeway for owners about jumping aboard.

Single-rider transportation, for example, became a major pandemic-driven story in 2020, leading to the possibility that golfers would approach shop counters asking, “Hey, when are we getting some of that?” The clientele could similarly ask about golf simulators, Toptracer Range equipment at practice stations, or a fancy GPS upgrade in the carts such as the Shark Experience.

While managers ponder these potential installs, a parallel question hovers in the air: How tech-dependent will the typical golfer’s loyalty to their sport turn out to be, here in the 2020s and beyond? Will the Millennial and Gen Z customer require shiny digital objects to continually hit the market, simply to hold their interest? Michael Hatch, president of Richmond, Virginia-based Acumen Golf, with its three-facility portfolio and successful consulting practice, doesn’t get caught up in any of this.

“I don’t chase those tech trends and I don’t acquire any of it, or promote it,” says Hatch. “The greens at your course have to be smooth, the staff has to be friendly and the beer has to be cold—cover those basics and people will spend their money with you. Too many times I’ve seen the latest digital thing come along, draw some interest and then not stick.”

At Acumen’s two semi-private courses and its one member-only club, there may be clientele intrigued about simulators, but they’re a non-starter for Hatch. “At $25,000 or more for a decent simulator setup, you just can’t make money,” he contends. Technology that delivers live leaderboard data on mobile phones does have value in certain scenarios, he feels, though probably not in his market. “I could see it in the Midwest, where their league business is so strong,” Hatch allows.

As the CEO of Renaissance Golf Management Group, Thomas Ham is responsible for guiding investment and expenditures at his client courses. On that basis, he picks his tech spots carefully.

“Those decisions will always be based on the price point of your green fee,” says Ham. “Our company manages the whole spectrum, from $45 rack rate up to $150. Tech can be pricey, so what makes sense for one facility won’t fit the course down the road.”

Consumer-pleasing technology that calls for a business investment would include geofencing to trigger food-and-beverage orders based on when the riding golfer leaves No. 8 green en route to No. 9 tee. That tech is interactive and it’s smart, but it’s only marginally effective, according to Ham. “I would expect our regulars to see some value in it, and then again they may view it as just one more app to download,” he muses. “Less frequent players at a public course aren’t going to engage with it.”

Ham has come up with what sounds like a logical and big-picture view of tech geared to consumers within the golf space.
“It’s absolutely the case that new inventions and innovations will be aimed at our consumer, because golfers skew affluent and because there are tech products for basically every market niche out there,” says Ham. “This raises the question of who pays to provide it. With rangefinders or those Bluetooth speakers in the cup-holder, it’s the consumer. With simulators, maybe it’s big, golf-themed restaurants, and they go all-in for it. In those scenarios, a course owner doesn’t have to sink money in.”

Custom clubfitting, as he points out, appeared as a greengrass-only innovation some 30 years ago and was able to claw back significant hardgoods revenue from off-course discounters. Now custom-fitting is drifting off-course again—technology being the reason—and showing up in the fast-growing storefront outlets branded as Club Champion, GolfTec or the like. Course operators who did well with their investment in those bulky test-club carts might lament this trend. But if they’re like Michael Hatch, they’re satisfied to “run a couple of demo days a year and earn revenue without having to tie up cash in golf equipment.”

The Phoenix-based software company GolfLogix represents an unusual bridge between modern digital solutions and old-school ways. According to company president Pete Charleston, one of golf’s timeless truths is that very few people have any gift for reading greens. A decade ago his firm began addressing that reality by producing the first golf GPS app for smartphones. It provided shot distances, a shot-tracker and a personal stat log, then eventually it added a 3D display of putt breaks and slopes on the greens of 12,000 courses.

The product-development phase was an arduous slog, but when all the mapping and database-building was complete, distribution was clean and simple—web-based delivery to mobile devices. For the 5 million-plus who signed on as GolfLogix members paying an annual app fee, this was high-value service.

But traditionalists, no matter how many painful misreads they suffered, were an undiscovered country for GolfLogix. So the company traveled backwards in time and began producing printed, pocket-sized books, called Green Books. They retail for $40 and cover just one course each, so the digital app is a better deal, but existing GolfLogix customers have nonetheless spent big on the booklets. “The percentage of our members who have the app and at least one Green Book is super-high,” says Charleston, who sells them to courses at $25 each with a minimum order. “We thought it would be a hard line between the two categories, but having the book makes a golfer feel like a tour pro—that’s what so many of them have told us.”

Some 4,000 different courses had sold Green Books as of April. For managers who lean toward lowest risk and substantial reward, Charleston promotes a tournament-based approach, in which “100 books come through the shop as part of a member-guest fee package, and all 100 sell through,” at a tidy per-unit profit of $15.

On the member-only side of the market, a technology like the OpenRounds platform for reciprocal play is touted as simple and straightforward for any club to adopt, should it wish to, because there is no cost to join the network. “Clubs are traditional—they always will be—so our product is designed and coded to uphold all the nuances and customs involved in outside play,” says company CEO Jon Wyeth. “A private club has the feel of a refuge, which means its role isn’t to chase every trend,” Wyeth adds. “But this is still the 21st century. Our experience is that something digital and innovative that aligns with club values can earn its place.”

Transportation tech is an area facility managers will want to study with an eye toward strategic adjustments—single-rider being the catalyst. Tony Duran draws on the lessons of a standout golf career in product development and marketing to forge his extremely upbeat view of single-rider. His influential firm, The Duran Group, is based in Orange County, California, and boasts a long record of success with startups and tech innovations, going back to the Softspikes disruption of the metal spike market, which Duran helped engineer. The arrival in golf of a purpose-built, club-carrying two-wheeler was owing in good part to The Duran Group’s multi-year collaboration with Phat Scooters. This spring, a golf version of the vehicle suddenly went from a novelty item to a pandemic-fueled phenomenon.

Duran is so bullish on this trend that he kept his options open in the category and is now working with two additional single-rider products. “Single-rider vehicles are only in use at about 60 courses currently,” he says. “That number could be 600 next year, and I expect it will. And from there I could easily see it at 6,000 courses three years from now. Consumers love this idea. Many golfers who experience it don’t want to go back to a two-rider cart—two in a cart to me was always flawed because it interrupts the natural flow of a round.”

It’s tenable to view the product as a true symbol of change, taking motorized golf and individualizing it while adding a streak of adventure to everyday play. Limitations around storage of belongings and protection from the elements suggests that conventional two-rider vehicles will continue as the core of any fleet. That said, Duran is at work on 3-wheel and 4-wheel versions of the one-golfer vehicle, including a 4-wheel Swedish product called the Ellwee, which in his words is “a blast to ride.”

No less an industry presence than Troon Golf put a thumping stamp of approval on this trend, announcing in June that it had partnered with Phat Scooters in a deal that would provide Troon-affiliated facilities preferred pricing. At the time of the announcement Troon’s chief operating officer, Mike Ryan, noted that single-rider rounds “have increased exponentially at all of our facilities since the beginning of March.” Significant further upside was foreseen by Ryan, “as guests continue to observe physical distancing, while seeking new experiences in golf.”

The reengineering of the original “Phatty” for use in golf was shepherded along by company president Derrick Mains, who says he had been noticing golf “getting more gadget-prone” in recent years, a shift he finds his company right in step with.

“The game is wonderful, and it always has been, but innovation can provide vital solutions to old industry problems,” says Mains, referring to slow play and the perception of stodginess. “There’s room for purism, and there’s room for new inventions, if they’re good enough.” A round of golf for four players each riding solo has a natural advantage when it comes to pace of play, he points out. Meanwhile, the increased fun factor of the scooters relative to conventional carts allows a course to up-charge its rental fee, generally by $20 per round.

Mains has a customer who played pro baseball for many years, and now plays golf avidly and regularly. This former big-leaguer’s two children are junior golfers who play pretty well, but weren’t playing all that often, until their dad purchased three Phat Golf Scooters.

“I saw him out on the course the other day,” says Mains, “and then I saw his two kids come up alongside him, all three on our vehicles. I mentioned that the kids seem to be out playing a lot more these days, and he said, “They have a new attitude toward golf, all because of the scooters. They don’t even let me play with my friends anymore!”

 

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