Applying Subscription Based Models to Grow Pro Shop Revenue

Five Four Club, recently renamed Menlo Club, is a subscription based men’s clothing line based out of Los Angeles, California. Back in 2012, founders Dee Murthy and Andres Izquieta came to the conclusion their current business model was not working. They needed a change. Found in an interview they participated in with Menswear Industry Magazine; they came to their subscription based model because of three factors.

 “This came from addressing three challenges we were facing in our business:

• Guys didn’t want to spend money on clothes
• They don’t know what they want usually
• They don’t like the current experience of shopping.

So with this in mind, we developed eight questions that got us to realize what products are right for the customer. So for $60 a month, a man now gets two-to-three great items to build his wardrobe.”

In 2017, Five Four Club had a little over 100,000 members, in dollars, their growth was expected to double to $100 million.

With subscription based business models growing in popularity, how can a golf club harness that popularity and apply it to the products in their shop? No, we aren’t expecting a facility to gather 100,000 members and begin cashing in on multi-million-dollar growth. Your club can still find success with a similar program. Just ask Bill Slade, Director of Golf at the Traditions Club.

“I have a membership of about 985 members, a large contingent of those folks are categorized as non-resident. These members have full golf privileges, but live in metros such as Dallas, Austin, San Antonio, Houston. Day-to-day traffic can be relatively slow, but come football season, or an event day, the club becomes filled with non-resident and resident alike members.”

This poses a challenge for Bill and the golf shop team. Counting on non-resident members to clear inventory in the fall is risky, and for the majority of the year, his shop is frequented by the regulars that live in town.

“I've got a little less than 200 members that live here in Bryan - College Station that have the ability to play golf. I see a lot of those guys on a regular basis on the course. However, my traffic through the golf shop was fairly light based on the number of members that I have.”

These non-resident members may be at the club four to five times a year, and during that stretch of time they wanted to stock up and buy everything the club had in the shop.

“I would see non-resident members come in the shop on game days or you know, if they're down here for something and all of a sudden they wanted to buy everything in the shop because they only get here three or four times a year, maybe six times a year. So they really want to load up on their product and they would come in, they would say, man, I really like this shirt. Do you have a double XL? I have to tell them we did, but someone has already purchased this, and there is no guarantee that the manufacturer will have the shirt in stock still, because we ordered these shirts six months in advance.”

The current experience of shopping wasn’t working for the Traditions Club, or their members. Similar to what Five Four found in 2012, Bill and the team at Traditions Club reinvented how to service those members.

“The question soon became; how can I service them? How can I give my entire membership the ability to shop at my club once a month?”

In December, 2016, Bill and the team were headed to the PGA Merchandise Show and examined the offerings from each vendor.

“Looking at one delivery from a vendor, we may see 36, 42 shirts in a March delivery, but we're only going to pick out eight to 10 of these shirts because we generally only stock four to six shirts deep, depending on the selection.”

That leaves quite a few shirts from each vendor that isn’t stocked due to inventory space of open dollars to buy. The idea was simple. The Traditions Club would offer a subscription based membership where Bill and his team would pick a shirt out of a collection that will be similar to the one we would end up stocking, and offer it as the shirt of the month.

“Members signed up, and in doing so committed to a March to December schedule. Once you were signed up, you had to remain through December. We started with a survey.”

Questions included:

• If you are considering being a part of this shirt of the month club, what do you like?
• Pique? Lisle?
• Three buttons? Two?
• Logo on the sleeve or chest?
• Hard collar or soft collar?
• What brands do you like? Rate these on a scale of 1-10
• What size?

What the golf shop team received with these surveys was more than just an initial thought process for building a shirt of the month club, but they also received valuable data to understand their membership’s buying habits.

This initial excitement and data allowed Traditions Club to commit to 10 shirts for the coming year. What the members received was:

• Member-only, exclusive shirt of the month.
• Break on pricing.
• Three options for delivery; drop shipment, hang in locker or hold in golf shop.

Once the year was over, Tradition Club had 50 members subscribed to the Shirt of the Month Club. The benefits exceeded profits too. They were able to try new brands, collect feedback from subscribers, and saw unexpected benefits such as a sense of comradery and exclusivity.

In 2017, they expanded to include a weather-conscious accessory to the shirt of the month. This might be a jacket in the fall, nice pants in the spring and shorts for the sweltering Texas summer. When the Traditions team decided to include lifestyle shirts for events like gatherings at the club, tailgates, and activities off the golf course, they were met with even more fanfare.

“My idea with that was not only to introduce something different within the month but also for a guy to walk in his house and lay the shirt down on the kitchen counter and his wife say, ‘where did you get this? Did you go to Nordstrom’s? I usually shop for your dress shirts.’ For the guy to say ‘I got this at the club’, has been incredibly valuable. Suddenly the wife is asking why she’s heading to the mall for her husband’s dress shirts! I want to be able to say that I can outfit them not only for golf, but I can help fit them for the office and beyond as well.”

This was a market that the Traditions Club hadn’t tapped into at that point. Guys generally don’t want to shop for their shirts, and they don’t necessarily know what they need or want until they have it.

To take care of returns, and left over inventory, the Traditions Club holds a raffle at the end of the year. This new revenue stream, according to Bill, has been implemented with the help of his team and has been a unique opportunity to provide more value for his entire membership.

How can you implement this type of strategy at your club? “Survey your membership and move from there,” says Bill.

For more information on how VGM Club may be able to help your club with products from our partners, contact us at 800-363-5480.