CEO Sebastian Haapahovi talks with The First Call's Gary Van Sickle about the impetus for his company's D2C model and why it is so appealing
Five years ago, a friend who managed a big-box golf store told me that his type of giant-sized retail outlet was a business concept whose time was almost up. He predicted that a future golfer would try out a club at a demo day, for example, then order it online and have the club delivered directly to the golfer’s home.
He said even the major golf manufacturers would eventually sell clubs and balls direct to consumers, or D2C as business insiders call it.
Takomo Golf is already involved in D2C. It is based in Finland and its motto is "Premium golf equipment at an affordable price." Takomo Golf CEO Sebastian Haapahovi has done just that.
Takomo launched its 101 model irons in early 2021. They were forgiving, hollow-body game-improvement clubs that are nonetheless attractive. A few months later came the 201 model irons, a cavity-back forged club for low- and mid-handicap players. Also, they come standard with Lamkin grips and premium KBS shafts. Takomo has recently added 301 irons, available for pre-order only. They are forged and designed for good players and come in cavity-back or muscle-back versions.
Do they sound pricy? Guess again. The 101 irons start at $459 (4-iron through pitching wedge); the 201s at $589; the 301s at $649. Shipping costs another $50.
Haapahovi, who came from the information technology sector but got into the golf business after he was stunned by new-club prices, speaks with The First Call's Gary Van Sickle about his company’s business plan and its future.
The First Call: Tell me about the trend of golf companies selling direct to consumers.
Sebastian Haapahovi: During Covid when everything went on lockdown, it started to grow quite fast. Consumers want to buy online. They’re getting used to it and can get golf gear delivered wherever they are. There isn’t availability in all places in the world. So that’s a real big opportunity for us.
TFC: Nobody wants to admit it but shopping online is fun.
SH: That’s true. I’ve seen a lot of purchases late at night. It’s almost like eating before you go to bed but instead of having a snack, you gift-shop on the Internet.
TFC: Who or what began the direct-to-consumer concept in golf?
SH: PXG had their own online store right away, I think because they didn’t have a distribution net in the beginning. I don’t know if they considered themselves a direct-to-consumer company but that might be where it all started on the equipment side. A few others were doing the same with golf balls about ten years ago.
TFC: You’re based in Finland. Is direct-to-consumer as big in Europe as in the U.S.?
SH: About 60 percent of our orders come from the U.S. at the moment, so it’s bigger there. People buying online is a bigger trend in the U.S., anyway, but of course everything is growing in Europe. The problem is that European markets are scattered. We have multiple different languages, that makes it harder for us to serve all of the audience. You have over 20 million golfers in the U.S. and Europe is not even half of that. So that’s why the U.S. is trending more than Europe.
TFC: Who’s your main competition in D2C — direct to consumer? Who are you competing against?
SH: We are compared to Sub 70 a lot, it has been doing pretty well. They are based in Illinois. Also, our price point is quite close to that of used clubs. A lot of our customers comment that they went with us because they got brand new clubs in the price range for used clubs that are a couple of years old.
TFC: How do you build brand awareness when you’re only online?
SH: Internet influencers have been big for us. YouTube reviews, people searching for new clubs. They use YouTube basically as a search engine. So when we get featured by influencers or reviewed on YouTube, that’s a really big help for us. We are not looking to sponsor any tour players because I believe we need to be present where our actual audience is and that’s on the Internet. I feel like sponsoring tour players, that’s the old, old school dinosaur method. Now, if tour players aren’t playing your stuff, what does it matter? If they’ve got your name on the bag and they’re not playing your clubs, what difference does it make? American companies have used this model for years.
TFC: You have to sell a lot of clubs and balls to pay Davis Love III or whomever a couple million a year. It doesn’t make sense.
SH: I think consumers are smart enough to know they don’t play the same equipment as the pros. It’s not like the old days. That model is dying and the consumer knows it’s not free for them to play the major-company equipment. They’re actually paying for the endorsements and that’s part of why clubs are so expensive now.
TFC: I didn’t think I’d see the day when a driver cost more than $500. And once one company jumped its price over $500, they all jumped in, too. In business, the successful companies are usually either first, best or cheapest. The big golf companies do all this marketing, saying stuff that may or may not be true, but there’s always a market for good inexpensive golf clubs and that’s obviously what you’re going for.
SH: Exactly. I was looking at fairway woods, because we’re launching our own brand of fairway woods at the end of this year. I saw one of the bigger big brands had fairway woods priced at almost $500. To me, that doesn’t seem right. I got an email from a company saying they’d cut their fairway wood price from $499 to $349.
TFC: That’s the price I want to pay for a driver, not a fairway wood.
SH: And that’s probably with a stock shaft that maybe you don’t want. Then you have to pay more to get a better shaft. I don’t know if it’s because of the recession but everybody is price conscious these days. If you go shopping for new clubs, you’re in sticker shock.
TFC: That must be great for you, right?
SH: Yes, yes, of course but there’s a lot of pressure for us, also, because the logistics and raw material prices have been going up. Our prices for shipping from Hong Kong have doubled in the last year.
TFC: That’s crazy.
SH: But because we don’t have the distributors or the re-sellers, we have better margins for our products. That’s why we can keep our prices so low.