It creates cash-flow issues for pros that they simply do not need, and it creates pressure to sell product that pros have in stock, rather than tailoring their offering to their customers.
Rather than expect the pro to invest in stock, at Orka we operate using a club-fitting system with a low overhead. As a custom-fit brand we do not want anyone to hold stock - it is totally against our philosophy. Moreover, it would be impossible for us to be a genuine custom-fit brand, with everything made to the customers' exact specifications, if we then ask the pro to hold ‘standard' stock. For me that is like trying to mix oil with water.
It is tough for the pro out there at the moment, and we think we have an offering that can help pros run a profitable hardware department. Essentially it is very simple, and consists of a system where product performance and aesthetic appeal are both key.
Firstly, we work to a limited distribution. We do not want more than 80-100 fitting centres in the whole of the UK (we currently have around 60), which immediately removes the pressure on pros from customers' price comparisons with a rival outlet up the road or on-line.
Secondly, we are very selective as to who we work with. Relationships are key, both between us and the fitting centres, and through the fitting centres to the end users. As a result, all our fitting centres effectively sign up to our beliefs, the core being that product is never discounted. We want to protect the margin for the pro, and as there is no stock holding, there is no pressure to clear stock. Therefore pricing can be consistent across an entire region.
The fitting system itself costs the pro £399, with a product life cycle of 2 years, so for about £200 per year the pro can run a complete hardware solution with great margins and a protected catchment area. We run in two ways, with both expert clubmakers and pros alike. The clubmakers want to make the product themselves whereas most pros would rather carry out the fitting while we assemble the clubs at our UK warehouse. Custom-built product is guaranteed to be back with the pro within 10 days of order, but it is normally turned around within five. A system like this can only work if the customer service is exceptional, and that is what we deliver.
In the current economic climate, I believe there is no longer any impulse purchasing of golf clubs. The internet is often, now, the beginning and the end of the purchasing process. The consumer may read reviews and forums on-line to see what product is thought of highly, the pro is then often used to test the product, and then the consumer returns on-line to find the best deal they can get. This causes huge frustration to the pro, which is why part of our code of conduct with fitting centres is that they will not undercut each other online. There is simply a desire to keep the price at its RRP and maximise the margin potential.
Going to the wall
Over the last year we have become increasingly aware of creating store presence, but it is hard to create that without holding stock. To overcome this we have just launched ‘The Fitting Wall'. This is a unique way of merchandising the fitting system on a graphic panel. With 1200mm of wall space we can give a pro shop outstanding presence and merchandise the entire fitting system: the interchangeable shafts are displayed, as are the heads.
We were aware of some of the outstanding fitting carts out there. However, our research showed that customers found some carts intimidating and unapproachable, because the product has the appearance of being locked away. Instead, we wanted to create a merchandising system that was tactile, where the heads were within reach and customers are able to handle them. I am delighted with what we have created.
The response to the offering has so far been outstanding, as we continue to handpick fitting centres both in the UK and across Europe. This is simply because the concept works. The outlay is minimal and the re-sellers out there are making great margins right now. The system is profitable almost immediately as pros are only buying stock they have already sold.
Looking forward to the rest of the year ahead, I am sure it will be tough for many, but Orka has an offering and product range that offers the pro a real solution to the financial crisis and an alternative to the way things have always been done until now.
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