Posted on Tuesday 12 June 2012 by Ulster Business
The past four years of economic recession has been a time of intense change and challenge for retailers, marked by a lack of consumer confidence and increased failure on the high street.
Given one of the key economic drivers of the future in Northern Ireland is tourism, how can retailers harness the opportunities that this presents?
Studies have shown that tourists not only invest time and effort toward shopping during their travels, but they also spend a significant proportion of their total tourism expenditure on retail purchases. More specifically, it has been proven that golf tourists spend significantly more on their trips compared to other types of tourists.
The North Coast area of Northern Ireland is a well-established tourist destination attracting visitors from all over the world. The Irish Open Golf Championship is not only an opportunity to tell the world what the North Coast has to offer, but is also a chance for retailers to capture new sales in a flat economy. Taking into account how the Welsh Assembly government used the Ryder Cup to regenerate tourism and encourage new business opportunities, golf tourism may be a chance to revitalise the north coast and the wider Northern Ireland economy.
The North Coast region has a fantastic natural product for tourism with world-class beaches, dramatic coastal scenery, and heritage sites, notwithstanding the Links golf course ranked as one of the very best in the world.
However, like other coastal resorts in Northern Ireland, some areas have seen better days and despite some recent improvement initiatives, these towns are tired and neglected in places. The retail offering in the North Coast area is typical of similar rural areas across NI, consisting of more well-known and larger retail formats in the major towns and more specialist retail offerings (e.g. craft, giftware, fashion and food speciality shops). These stores represent an important employer in rural regions and in many cases the local souring of products stimulates the local economy by reinvesting income in the area. However, retailers in these tourism areas must overcome obstacles of remoteness and seasonality, while acknowledging the diverse needs of both local customers and visitors to the area.
Why should retailers take stock of the opportunities presented by golf tourism? Firstly, in the short-term, retailers can generate business from golf tourists who will be attending the Irish Open tournament as spectators. Secondly, in the long-term, retailers can generate business from tourists both who go on holiday principally to play golf, and those who play golf as a secondary activity whilst on holiday or business trip.
Tourists not only invest time and effort toward shopping during their travels, but they also spend approximately one third of their total tourism expenditures on retail purchases. Compared to other types of tourists, golf tourists do spend significantly more on their vacations. For example, at the 1999 Open Championship at Carnoustie in Scotland, $20.1m was injected into the local economy and shopping accounted for the largest proportion of spending by visitors to the tournament.
Golf is becoming less corporate and more of a sport for all, including families, women and younger children. There are also a growing number of occasional golfers, which provide opportunities for tour operators and resorts to offer golf as an add-on feature. Taking these trends into account, it is clear that the Irish Open Championship on the North Coast represents an opportunity to increase business for local retailers. The question is how?
The media is replete with stories of retail failure evidenced by a growing number of shop closures. In the current difficult economic environment in Northern Ireland there is a danger that retailers are complacent, apathetic and depressed and in doing so miss new opportunities for growth. Retailers must be proactive and align their business to the new customer of 2012 and beyond.
In Northern Ireland, this new customer includes the visitor and the golf tourist in particular. Retailers in rural tourism areas must acknowledge the diverse needs of two distinct customer segments: local customers and tourist customers. In doing so, retailers need to provide a balance of products, services and experiences (high quality) that simultaneously caters to both groups in order to sustain economic growth. While tourist events present an opportunity to grow retail businesses, the product and service offering must match the high-spending clientele of these tourists in order to leverage maximum potential.
There is now an acceptance that shops must carry out functions that add value for the customer. One way of adding value is providing an experience built around physical, emotional, social and sensory connections with consumers both offline and online. One relevant retail strategy may include the ‘pop up store’ whereby retailers set up a temporary shop at the Open Championship specifically targeting the golfing community. Another strategy may incorporate the concept of a brand lounge, whereby retailers utilise golfing celebrities to endorse their store and invite consumers to take part in this unique experience.
The development of golf as a tourism product brings economic benefits and the retail sector is arguably one of the chief beneficiaries. However, if the North Coast is to benefit from golf tourism, there needs to be a focused and sustained stakeholder strategy to revitalise the retail economy.
The recent announcement of the multimillion development of a new golf resort in the North Coast should ensure that this will be a long term opportunity rather than a one off event. Indeed, the current golf tournament itself should in fact be seen as a rehearsal (albeit on a smaller scale), for hosting the actual Open Championship at Royal Portrush in the future (having done so before back in 1951).
The timing of this event is also significant in view of other major tourism initiatives hosted in Northern Ireland in 2012 including the opening of the new multi-million pound visitor center at the Giant’s Causeway and the recent opening of the new Titanic visitor center in Belfast. But, bottom line, retailers must be at the top of their game and do everything possible to compete for a share of the golf tourist purse.
So while golf tourism may present an enormous opportunity for retail businesses, the question remains, are retailers up to the challenge?
Dr Peter Bolan and Dr Karise Hutchinson, Ulster Business School will be presenting their research findings relating to retail golf tourism at the forthcoming International Conference on Tourism and Events to be held at the Europa Hotel in Belfast 20-22 June.