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SBJ/Aug. 25-31, 2014/Leagues and Governing Bodies
On-site merchandise sales up 15 percent after PGA changes
Published August 25, 2014, Page 7
The PGA of America saw a 15 percent uptick in sales from its on-site merchandise outlets at Valhalla despite a soggy PGA Championship two weeks ago.
Even though rain kept the crowds slightly smaller than the 40,000 expected per day, merchandise moved well, said Michael Quirk, the PGA’s senior director of merchandise.
Quirk, who joined the PGA from the U.S. Golf Association last year, introduced a more brand-friendly style to the merchandise tent this year by permitting the 12 apparel and headwear vendors to decorate and brand their own spaces. Nike used large posters of Rory McIlroy and Tiger Woods to grab shoppers’ attention. Adidas brought in former University of Louisville basketball star Peyton Siva to sign autographs for the hometown fans one day.
Vendors could decorate and brand their own spaces at Valhalla.
That increased focus on marketing helped sales withstand a 15 percent drop in attendance because of almost daily rain during the tournament. That was evident by sales of McIlroy’s scripted outfits for the week. Designs that McIlroy wore during tournament week were sold out by Saturday.
The key metrics, Quirk said, showed that the average transaction increased $10, and that the capture rate jumped 8 percent. Capture rate is the percentage of people on property who made their way into the merchandise tents at Valhalla.
“I think what we’ve found is something that works and now we’ll see what happens when we go to bigger markets and the Ryder Cup,” Quirk said. “People didn’t see the merchandise tent as one big store. They saw it as 23 mini-shops, like multiple department stores, and that shopping experience helped lift the average transaction.”
The PGA won’t run merchandise sales for the Ryder Cup next month because it’s not on U.S. soil, but it will be in control for the 2016 Ryder Cup at Hazeltine in Minnesota. Quirk said he’s also looking forward to big sales numbers from the 2016 PGA Championship at Baltusrol in New Jersey, which will draw the New York market.
Brands spent anywhere from $50,000 to well into the six figures to finish out their footprint inside the merchandise tents.
“What we’re already hearing is that brands may be spending even more next year because they saw what some others were doing this year,” Quirk said.
The PGA did not charge the vendors to brand their spaces. Instead of the usual 10 percent royalty the PGA takes on logo merchandise, the rate is 15 percent for on-site sales.