In July Direct Golf UK announced that they are going to enter to a partnership with Sports Direct to be able to grow and expand in Europe. This will not be the first attempt of Direct Golf UK to go beyond the online sales channels. In July I reported about the cooperaton with Tesco UK.
According to my sources Sports Direct will take an equity stake and provide funding to fulfil Direct Golf’s ambition to become Europe’s number one golf retail specialist. It is an interesting choice. If I compare Sports Direct's store number with other major sport retailers like Decathlon (603 stores in Europe) and Intersport (c. 4000 stores in Europe) then their store number is minimal: 270 stores.
Is this a recognition that people still prefer to buy their golf clubs in on- and off-course shops, mass-market retailers and sporting-goods stores?
Although KPMG reported a slight (c. 1-2%) inclrease in golf participation in Europe would stay skeptical regarding demand for golf clubs and golf apparels. Other important issue how Direct Golf will be able to keep low their prices? Can they keep the current level of margin? John Andrew's golf brands can gain from this (John Letters, Progen) by cutting out the middleman, owning the supply chain and retail store.
Once again differentiation and added value services (e.g. club fitting service) will gain momentum.
I think people will still visit shops for a while to see the product as like today, but will buy it online (see: price-comparison portals' effect) or you give them some compelling reason not to buy online…