Written By: Tony Covey
Over the last several seasons, early discounting has become the norm for industry giants Callaway and TaylorMade. Now that the bulk of 2015 product has been announced (and most is already on shelves), some of you have, no doubt, begun counting the days until you can get a R15 for $249 or a Big Bertha Alpha 815 Double Black Diamond for $369. And yeah…those are probably high-end estimates.
This could be the year it doesn’t happen. Sorry.
Last season TaylorMade held the line (mostly) on SLDR, but you know…that JetSpeed thing happened. Slash prices, toss in a fairway wood, do whatever needs to be done to prop-up those numbers.
Callaway was anything but slow in discounting X2Hot, Big Bertha, and Big Bertha Alpha. Out with the old and in with the new has been the mantra for companies that rely on frequent releases to create volume, and volume to drive revenue.
Can either company make it through May without cutting prices?
While it would certainly be better for the industry if both go full Titleist (no discounting until there’s a new model), I am both a cynic and a jaded realist.
Let’s set the over/under at June 15th.
Why This Year Could Be Different
Should TaylorMade feel compelled to grit it out, it can lean on the adidas and Ashworth apparel lines where margins are much higher than they are on golf clubs. With expectations lowered…or at least reduced to more realistic levels, TaylorMade-adidas Golf might be able to make enough money with cutting prices.
Callaway, for its part, has actually increased the average selling price of its products. If the snow melts quickly, that alone could be enough to sustain the company, despite the lack of a significant alternative revenue stream outside of the hard goods market. While the ball that changed the ball won’t threaten the Pro V1 anytime soon, Callaway’s ball business is on the uptick. That won’t hurt either.
And This Time We Mean It! (For Real)
Lately, both companies have devoted a fair amount of time to discussing their commitments to inventory management, and supporting their retail partners. Presumably that would include both a reduction in the number of units produced and a responsible pricing model that won’t force retailers to go broke buying SALE stickers.
Is this the year that the golf club market regains its dignity? If TaylorMade and Callaway have forecasted correctly, and inventory levels prove to be responsible, I believe this is really the year. The insanity is over.
If winter drags, products start collecting dust, and that retail channel we talk so much about starts to show signs of backing up, all bets are off. Slash and burn…try again next year.
dcorun
9 years ago
Just to begin , I bought the RBX Stage 2 in 2014 and put a real Fuji Fuel (price drop) shaft in it and I hit it just as well as anything new on the market now (compared on the monitor at the local PGA Superstore) and saved a lot of money. I don’t mind spending money if I’m going to see a difference in performance but, that is not the case. I saw the interview with the new CEO of TM on the Golf Channel at the PGA Show and he said he was like a lot of golfers and was always wanting the latest and greatest and it got out of control with TM producing new product it seemed on a weekly basis. He SAID he realized his mistake and TM was going to take a different approach to how they market in the future. He seemed to be sincere about the future plans he has for TM and they sounded good. We’ll just have to wait and see. TM has slowed down some lately and we don’t feel like we’re seeing new product every 3 weeks. I’m not bashing Callaway but, they seem to be staying the line. Big Bertha, Big Bertha Alpha, Big Bertha Black Diamond, V Series, XR and so on, all in a very short time. There is only so much money to go around for golfers these days and they need to focus more on clothes, shoes, balls and other golf products besides drivers and irons to make up the difference in the money they make. Good Luck with WINTER, especially in the North and even here in Georgia where it’s been in the 40’s except for a few 60* days last week and the normal high this time of year is 57*. If it keeps up through the rest of February and March things could look bleak for all the golf companies. .