There are roughly 24 million golfers in the United States responsible for spending $2.6 Billion on golf equipment annually. But it’s really a group of about 6 million core golfers who account for a disproportionate amount of the total expenditure. There’s a good chance if you’re reading this, you’re one of those, or one of us…one of the 6 million, anyway.

That leaves a silent majority of 18 million golfers who aren’t looking to spend $1500 on a set of irons and won’t set alert reminds for product release dates. This quantitative majority plays in the company scramble, the occasional twilight round on vacation, and might hit their driver 200 yards on average, though there’s a good chance they’d struggle to tell you which brand of driver they play. They don’t care much about EI profiles and dimple patterns – and arguably, their lives are better for it.

But as a composite group, they play plenty of golf, and at the risk of declaring the obvious, to play the game, golfers need equipment.

While it’s not explicit in the conversation, major brands are primarily focused on competing for as much of the 6-million golfer pie as each can reasonably target.

It doesn’t take MENSA level thinking to then realize there are 18-million underserved golfers occupying a gold-mine of opportunity that is primarily financial but also philosophical – you know, the whole grow the game idea. That’s great, so long as growing the game also grows the bottom line.

With that, heading into 2020, you’ll find an increasing number of OEMs are taking notice of the opportunity. Each will make the case to casual golfers that its products offer sufficient (or better) performance without the gratuitous sticker shock.

CAPITALISM ON CUE

Just because opportunity comes a-knockin’ doesn’t mean everyone is in an equal position to answer. Tour Edge presents a strong case that it might have the most complete resume of any suitor.

A brief recap – Tour Edge has been a part of the equipment industry for 34 years. It has deftly weathered several economic storms which eradicated many similar-sized companies from the equipment landscape. Let’s take a moment to remember Adams, Nickent, Ram, and the countless others who aren’t with us any longer.

If the general population – let’s call them Joe and Jane 3-putt – draw any associations with Tour Edge, it would likely be that of a brand with exceptional fairway woods or super affordable boxed sets. There’s not much in between, and for golfers within the market we’re discussing, it’s most likely the latter.

So how does Tour Edge get to the golfer who wants more than 7 clubs and a matching bag but isn’t in the market for a titanium-faced, multi-material fairway wood with an assortment of tinker toys anchored to the sole? According to Tour Edge founder David Glod, it’s less about going someplace new and more about staying where Tour Edge has always been. Perhaps more accurately, it’s not that Tour Edge is crafting new equipment from scratch but more so shifting focus and resources to address the needs of a group of golfers his competitors appear content to mostly ignore.

The mid-tier price point is a segment that is vastly underserved, and we feel we have become the leaders in this arena,” says Glod.Manufacturers seem to be focusing on about 15%-20% of the golfers in the US market lately. That has allowed us to thrive in the space as one most complete line offerings from top to bottom.”

Ok, so Tour Edge believes it’s a category leader, but so what? Claims are cheap. Hell, I might believe I’m Batman. Prove me wrong.

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That said, there’s more than a little logic supporting Tour Edge’s assertions. Better players have long avowed Tour Edge’s Exotics line of fairway woods and hybrids, establishing a cult-like status within what’s already a pretty niche equipment space. But those clubs serve the needs of golfers living several standard deviations away from the mean.

More to the point, its EXS driver ($299) claimed Best Value in 2019 Most Wanted Driver testing and the HL3 Iron-Wood ($599 for 3-PW) was the Most Forgiving in the SGI category of Most Wanted Iron testing. More than anything, this suggests Tour Edge’s “Pound for Pound” tagline is more than some self-congratulatory bravado.

Creating a top-shelf driver and selling it for $550 isn’t novel. Engineering one with little discernable difference in performance and keeping it around the price of a decent carry-on, however, is.

“It’s kind of like the razor market. The market leaders inexplicably started charging exorbitant prices, and the market finally shifted and created new opportunities for disruptive brands,” says Glod. “Consumers started looking for better alternatives at more logical pricing that performed the same or better.”

While we’re firmly in the era of the $500 flagship driver, it doesn’t take a Ph.D. in Economics to figure out why equipment costs what it does. There are, in fact, some fairly basic reasons this is the case.

Reason #1 – Consumers continue to pay what OEMs are asking. This is hardly a golf-specific reality. Allow me to submit as exhibits A and B, $1400 iPhones and $400 YETI coolers.

Reason #2 – Golf companies are for-profit operations. While several factors go into the final retail price of a product, each has to cover a certain amount of fixed and variable costs. Margins also need to be high enough that everyone in the distribution chain can (hopefully) make money. With that in mind, Reason #2b is that, as unit sales have declined, club manufacturers have shifted their business models from volume to margin-driven.

Whether the number on the price tag is fair, attractive, or off-putting is ultimately a question for consumers to answer.

It’s within that context that Glod asserts, “The deal is that we can match or better the performance with lower costing clubs, up to two to three times as much and golfers can avoid the markups that exist from the larger guys that help pay for their massive budgets.”

Let’s be clear. Tour Edge is talking about its HL4 and EXS lines, which are priced and marketed specifically to address price points between what quality clubs used to cost and what they cost now. Call it the Opportunity Gap.

That’s not to say Tour Edge doesn’t spend on marketing. It’s run commercials on The Golf Channel, PGA Tour radio, and it has agreements with Scott McCarron, the 2019 PGA Tour Champions Schwab Cup winner, and other members of the PGA Tour’s senior circuit.

It also invests in R&D and all of the other areas typical of equipment manufacturers in the industry, so it’s not as if those costs don’t exist. That said, for Tour Edge, it’s not so much a function of spending, but more so a matter of not over-spending. At some point, good money is thrown after bad, and ultimately, Tour Edge believes, it’s the consumer who bears the additional cost to help offset the aforementioned massive budgets.

As with most any product, the last 1% of performance is marginally quite a bit more expensive, and frankly, most of us would be just fine saving the cash and living with something that’s 99% as good as anything else on the market. Again, this is a macro statement intended primarily for people who likely won’t be reading this article – at least not initially.

After all, nearly every person with a set of earbuds isn’t actually an audiophile, and the stock pair of blue jeans from Gap are more than serviceable in most any situation that calls for denim.

The tough part about this is any analysis is either prophetic or reactive.

As the market cycles, we’ll know whether Tour Edge won this particular battle – though there will undoubtedly be some pretty clear indications along the way. Either way, we’ll be discussing something that already happened (Tour Edge launching HL4) or applying imperfect knowledge to potential situations (Tour Edge EXS driver outperforms “________” in Most Wanted testing).

To date, all that’s been established is the objective and the opportunity. Profit is the lifeblood of every golf company (well, every company in fact), and this mostly untapped market is a batting-practice fastball on a 3-0 count.

What remains to be seen is which brands capitalize and to what degree each experiences success. So, because nothing is certain, let’s put on our Nostradamus hats and project several years down the road when golfers have cast their green-backed ballots, and the market dynamics have shifted, albeit slightly.

MAGIC 8-BALL

Glod believes that the mainline offerings from the industry’s biggest brands are geared towards core golfers, but are marketed and promoted to everyone. Some may offer gear at lower price points, but Glod says, “They don’t necessarily put a lot of thought into who those clubs are for and how to make game improvement work for the entire spectrum of players.”

There were some notable exceptions to this, but the core group of golfers is still the same cohort and continues to be responsible for the majority of the spending. A few of the larger OEMs leverage DTC models in an effort to increase margins, but higher prices make it tough to come back to a population that’s been intentionally underserviced. Cest la vie.

In terms of the 18-million golfer silent majority, Tour Edge grabbed a modest yet impressive chunk of this demographic. Even though it’s custom-fitting isn’t as robust as what a tour van experience or Cool Clubs offers, the 48-hour guaranteed turnaround on all custom orders and simplified buying process is a large selling-point to golfers who don’t want to spend the time or money on a protracted fitting experience.

Tour Edge has experienced a 250% year-over-year increase in custom orders over the last 3-years, mainly on the back of the EXS line which Glod says “has been a smashing success for us.” Adding, “We had our best-selling Exotics year ever in 2019.”

Because there’s no such thing as a secret fishing hole in the golf industry, brands such as Sub70, Inesis, and Tommy Armour (among others) have also experienced rapid growth without siphoning any significant percentage from the core group. Their success comes from giving golfers more options in one of the industry’s hottest segments.

While that’s only conjecture at this point, how brands choose (or not) to target this Opportunity Gap will no doubt be a storyline in 2020. It won’t likely have the same amount of pomp and circumstance surrounding it, but like those apps on your phone, it will quietly be running in the background.

As always, let us know your thoughts – unless your bag is worth more than your first car.  Just kidding. Well, maybe.