09/01/2016

When the equipment branch of Nike Golf went the way of the belly putter earlier this summer—which is to say, belly up—the news was greeted by both derision and disbelief. How could a company with the biggest name the game has ever seen—Tiger Woods—and his heir apparent—Rory McIlroy—fail in the sport?

There are plenty of reasons. For one, golf equipment has long been a difficult industry to navigate. Professionals may use a variety of clubs, but amateurs might go through one or two sets in their careers. Loyalty and quality is paramount. In other words, a player comfortable with Titleist has little incentive to take a chance on Nike. When you factor in the high costs, that’s especially true.

There’s also an appeal for “purely golf” companies. Nike, when it joined the fray in the late 1990’s, was a shoe company. Golfers had a hard time forgetting that label. They asked why is a shoe company in golf? Rather than why is Nike taking a chance on golf?

In the end, it’s not surprising the venture failed. The clubs proved for the most part unpopular with professionals and amateurs alike, and the company signed Woods and McIlroy to lucrative deals that far exceeded their competitors. Star power ain’t cheap. And McIlroy had troubles with the equipment, as well.

This is not an unprecedented result for Nike. Just around the time Tiger inked his deal with the swoosh, Nike was making a push into hockey. Who did it go after for its early clients? Wayne Gretzky and Sergei Fedorov.

They asked why is a shoe company in golf? Rather than why is Nike taking a chance on golf?

Gretzky was and in many ways remains the Tiger Woods of hockey. Fedorov was something similar to McIlroy with an added bonus. After winning the Hart Trophy as NHL MVP in 1994, he became the biggest European star in the game. That same year, Nike bought Canstar Sports, the company that owned Bauer, the premier equipment producer in hockey.

Fedorov was flashy, speedy and skilled, elements that Nike quickly latched onto. He was also Russian. Now, Nike had in-roads into the largest emerging economy in modern history as Russia left the Soviet Union in the past.

But despite the widespread ad campaigns—which included some genuinely funny commercials—Nike struggled from the jump. For one, the skates were hideous. All white skates, black skates with silver overlap, white skates with black ovals…there was too much going on. What made matters worse was players complained about comfort. Eventually, Fedorov left Nike for that exact reason. It didn’t help that Gretzky retired in 1999, a shell of his high-flying 1980’s self.

As a result, Nike started co-branding equipment with Bauer. Rather than release “Nike” sticks and “Nike” skates, the company debuted “Nike Bauer” sticks and “Nike Bauer” skates. The hope was that the reliability of Bauer would lend credence to the Nike label.

This marriage lasted until 2007 when Nike officially left the biz. Although the company still owns Bauer, it let the more traditional branch continue in the industry. Why? Like golf, hockey buyers are fiercely loyal. Bauer, CCM, Easton (hugely popular in the stick market) and Graf represented true hockey companies. When Nike sputtered out of the gate, disgruntled consumers stayed with the brands they trusted. Speaking from personal experience, there was even a backlash against Nike-Bauer products. The shoe company wasn’t fooling anybody. We liked Bauer. We wanted Bauer.

(As an aside, CCM has partnered with Taylormade in recent years to improve its stick technology).

It was simple. The equipment wasn’t bad, it just wasn’t better than what was already well established. Nike’s legacy in hockey is a somewhat negative one, too. With the advent of the “Vapor” line—which included the most expensive skates on the market—Nike drove up the price of hockey equipment.

We’ll see what people will ultimately think of Nike golf. For now, there’s a lesson. When entering a niche market, know what you’re getting into. Just because you’re established somewhere, doesn’t mean you’ll succeed everywhere.

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