How has Foremost’s new online retail operation progressed so far?
Foremostgolfonline.co.uk went live in May. We made a soft launch to test systems and ensure we were able to offer a first class service to our customers. Now that we are happy that all is functioning well, we will shortly embark on marketing and promoting the site. Our unique advantage will be through the 1,000 pros’ websites and weekly email newsletters we have developed in recent years.
Who stands to make a profit from Foremost’s online sales?
Every UK sale made online will be associated with one of our professionals, and they will enjoy the profit.
What has been the response from the membership so far?
The response has been excellent. Every Foremost professional will receive the profit from any – and all – sales he or she is associated with, although it is optional for pros to promote the site through their personal website and email newsletter. This is due to the varying relationships each pro has with their club, and the use of the club’s email database. Assuming a pro wishes to be included, and the customer is directed to the site from either the pro’s web site or email newsletter, the association is automatic. In the event a customer comes directly to the site, part of the checkout process will establish which pro they wish to be associated with, and in the odd occasion where no selection is made, we will allocate the sale geographically.
Foremost has reported that it expects online to account for 25% of UK golf sales by 2016. Do you expect this figure to continue rising?
The percentage will vary significantly across different product categories. As always, the distress and location purchases will remain strong at the point of delivery, so balls, gloves, accessories and similar items will not grow online as much as categories such as clothing, shoes and larger value purchases. Overall, I can imagine we could easily see a third of all golf sales taking place online in the future.
If you consider the demographic that the largest category of golfers is male and aged 45 and over - which fundamentally dislikes shopping and is among the fastest growing categories for internet use – then we might be naive to think golf will be so very different from other retail sectors.
I also believe we are seeing changes in the development of internet retailing in sectors such as ours. Rather than there being hundreds of small, independent online retailers – as was the case a few years ago – we are now seeing a maturity in which strong retailers dominate and offer the online option as a standard channel. This trend is accelerated by the trading terms of many of the leading brands: while they are cleaning out the internet cowboys, the unfortunate side effect is that they are preventing independent pros from taking part in this sector. That, fundamentally, is why Foremost has moved into the online sector, and it may well be the only way pros can enjoy any part of this category of business in the future. The next interesting development will be when the major brands begin retailing directly, as already happens in a few instances.
How were Foremost profits in 2010?
2010 was Foremost's most successful year since it started trading in 1984. Turnover and profit were both up significantly compared to 2009, which had been our most profitable year to date. Retail margins for our professionals recovered some of the decreases from 2008 and 2009.
Foremost is owned by its professionals, and rebates, share dividends and share value distributed were at record highs. Early signs in 2011 continue to look encouraging, with one or two product categories such as Woods seeing rises of more than 25% so far this year.
The professionals who recognise their unique proposition to the golfer, of expertise and service, will thrive, while those who fail to recognise the changes and continue to try to sell on price alone will struggle.
