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SBJ/Aug. 4-10, 2014/Leagues and Governing Bodies
PGA’s new model could boost merchandise sales
Published August 4, 2014, Page 7
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Editor's note: This story is updated from the print edition.
The PGA of America anticipates a jump of at least 20 percent in PGA Championship merchandise sales over its best year, thanks largely to a new model with its vendors.
The merchandise pavilion, which opened this past week at 38,000 square feet, will be the largest for a PGA Championship, and the interior of the giant tent is undergoing a transformation as well, with more on-site branding and marketing than before. The event tees off Thursday at Valhalla in Louisville, Ky., and merchandise sales will extend through the tournament’s conclusion on Sunday.
The PGA’s main shopping hub in the past has been fairly neutral in its décor and fixtures, with no real opportunity for big-brand vendors, such as Ralph Lauren, Nike and the Greg Norman Collection, to dress up their space.
But the PGA of America has changed its approach under Michael Quirk, the senior director of merchandise who came over from the U.S. Golf Association in January 2013.
The PGA of America transformed the merchandise pavilion at the PGA Championship.
Golf spectators are “much more brand conscious and more brand driven than ever,” Quirk said. “Ten years ago, the male shopper came in looking for a shirt. The biggest decision they had to make was striped or solid. Now, there’s much more of a sense of fashion, brand and the performance fabric.”
With dozens of brands in headwear, apparel and accessories, shoppers tend to get overwhelmed easily, Quirk said, so the PGA is putting more time and expense into creating a better shopping experience.
Quirk’s first move is to expand the space. PGA merchandise tents in the past have been around 30,000 square feet. The tent at Valhalla will be 38,000 square feet.
Each of the 12 apparel and headwear vendors had the opportunity to brand and decorate their footprint. In the Nike shopping space, for example, white walls will be replaced by a barrage of swoosh marks, life-size posters of Tiger Woods and Rory McIlroy, and designated carpet colors that set off Nike’s shop-within-a-shop. The series of Woods and McIlroy posters feature their scripted apparel for the four days of competition, and the corresponding shirts will be for sale in that same space.
“Nike’s new twist really enables us to promote the swoosh and showcase the brand,” said Rick Gielow, Nike Golf’s director of sales business. “Nike is more visible than it’s ever been on the PGA Tour, and the more visible we can make the swoosh, the more authenticity it brings in the golf space.”
The PGA said that vendors will be spending anywhere from $50,000 to well into the six figures to brand their space. Each vendor signed a three-year contract with the PGA, which guarantees the brand three PGA Championships and a Ryder Cup on U.S. soil.
The PGA did not charge the vendors to brand their spaces.
The PGA agreed to ship and store all of the branded fixtures in the pavilion in exchange for a higher royalty. The PGA typically takes 10 percent on logo merchandise, but the rate is 15 percent for on-site sales, which offsets the increase in expenses.
The primary boost in revenue, however, will come from an anticipated uptick in sales. The best year previously was 2005, when the PGA was held at Baltusrol in New Jersey.
“We truly believe the average transaction will go through the roof,” said Quirk, who expects 240,000 to 250,000 spectators at Valhalla through the week.
Quirk said the PGA will do more marketing for the pavilion, including a text-to-win number that will respond with discounts for merchandise.
He also expects the pavilion to be a center of activity with brands bringing in some of their athlete ambassadors for autograph signings. Nike already has plans to bring former NFL kicker Ryan Longwell, and Adidas has plans to feature former University of Louisville basketball player Peyton Siva.