The opportunities for own label sourcing.

Why?

In recent years the own brand, or private label, phenomenon has been making big headlines.

In grocery Aldi and Lidl continue to make huge strides with their combination of a small targeted number of branded products sitting alongside their own private label offerings.

In the outdoor sector many retailers have embraced a similar philosophy.

Consumers demand brands for the quality assurance and emotional satisfaction, however it is becoming ever more apparent in the outdoor goods market that these brands do not have to be manufacturer brands.

Indeed there are many pros and cons of undertaking your own private label strategy and perhaps this is the starting point for any discussion;

Pros & Cons

The pros of private label products:
-They are usually lower in price than branded products.
-Multiple private-label product manufacturers will compete with each other to earn a retailer’s business, giving the retailer the opportunity to provide the best balance of quality and price for their customers.
-The product quality is generally good (better than most people anticipate when thinking of private label products).

The cons of private label products:
-Some are just plain low quality offerings made at the lowest price point. These are the things that people will refer to when they say “you get what you pay for.”
-Retailers lack direct control over the manufacturers of their private label products, which can slow responsiveness to changes in the market.
-Private label products tend to be “me to” goods that are trying to match branded product performance. They are rarely innovative. Innovations and product improvements will usually be led by branded products.
-Customers are tied to a retailer to get private label products that they like. You can get branded products almost anywhere.

If you run a successful outdoor outlet then your business is likely to be driven by a combination of “must have” sellers – I.e brands/products that are requested directly by the customer and “sell themselves” and those items that you can influence directly.

It is this latter category where one is most likely to find a private label opportunity for one to source directly.

The good news is that, as a starting point, you will already have an understanding of the potential volume of goods that you can sell and therefore but able to react to any manufacturers MOQ (Minimum Order Quantity).

However, don’t just consider the sales opportunity that may exist for these goods in one channel.

Do some research. Does the opportunity exist online? What about ebay or Amazon?

Many successful sellers find an Amazon niche, source goods and then use FBA (fulfilled by Amazon – effectively the amazon warehouse) to establish a very solid business base.

Looking at these wider opportunities may further assist in assessing the product opportunity.

The next step is how do I source these goods.

How

There are several options available but, thankfully, the process (in theory) is much easier than it was some years ago thanks to the internet.

I) Trade Show

Traditionally the most effective sourcing route was to attend trade shows. Most notably ISPO where the many sourcing halls allow direct access to manufacturers from nations such as China, India and Pakistan.

A combination of the wide variety of goods on show, the opportunity to talk directly to the manufacturer and the chance to “shop around” means that this is still an excellent place to start and one that comes highly recommended.

ii) Alibaba.com

Failing that the next port of call is Alibaba.com. Founded in 1999 by Jack Ma, Alibaba is a business-to-business portal that connects Chinese manufacturers with overseas buyers. In 2012, two of Alibaba’s portals handled 1.1 trillion yuan ($170 billion) in sales with suppliers from other countries now supported.

Think of a combination between amazon, the Yellow Pages Business Directory and a dynamic search engine and you have some idea of the power of the site.

An advanced search engine allows you (in my experience anyway) to literally find any item that you are looking to source.

For reassurance there is a rating system, simple messaging systems and even “off the shelf” products that can be sourced at aggressive prices.

Iii) Sourcing Agent

The third option is to use a sourcing agent. Often specialising in bringing in goods from specific nations or factories many agents focus on specialised areas and become the “go to” resource in their field.

Without doubt they will ensure that the sourcing process is (relatively) pain free and will (usually) find an excellent solution, however this will mean that (since they usually get paid by commission) that the goods will (probably) be more expensive than if you were to source the goods yourself.

The pitfalls

Having found a solution and a manufacturer the next step is to get the product produced.

Invariably, particular with a first time, or small, order this will mean payment up front.

Often this will mean FOB (freight on board or free on board) price (usually quoted on US$) .

In a simple FOB origin arrangement, the seller agrees to pay all expenses related to the transportation of the freight to a specific point. Once the freight reaches that point, the seller’s responsibility ends, and the freight becomes the property and responsibility of the buyer.

Note that this therefore does not include any duty or other fees that may be due.

My advice, before even starting the import process, would be to visit the Government Website www.gov.uk and search “importing goods”. This will provide a solid overview of the processes involved and any additional costs.

Do not calculate your profit based on the FOB as there are other costs to take into account (shipping, duty, customs clearance etc) but these depend on the item being imported and the list would be too onerous to list here.

Once your comfortable with all the implications here its time to place that order.

The end result

So you’ve made it!

Don’t forget the lead time -it can take 6-8 weeks to arrive by sea from the Far East and perhaps 4 weeks to manufacture an item so it is prudent to allow 14-16 weeks.

Don’t forget the design, the packaging, bar codes etc as these also add to the cost and lead times.

But get all these factors right and you could end up with a private label product(s) that fills a niche, provides excellent margin and are a perfect compliment to the branded goods within your store.

There is no doubt that, done correctly, the sourcing of ones own products can be a positive contributor to any business but the additional margin rewards will inevitably come with additional work and responsibility.

Good luck!

Solutions for Sport new Digital Joint Venture

Solutions for Sport, one of the UK’s leading provider of Sales & Marketing solutions for sports brands and retailers, has further enhanced its Digital Services Division in a new partnership with Cirencester based Unseen Web Team (UWT).

The partnership will see the two companies combining the sports trade expertise of Solutions for Sport and technical expertise of UWT to create website solutions for sports brands and sports retailers through a newly developed CRM web platform.

Commenting on the partnership Paul Sherratt, Owner and Managing Director of Solutions for Sport said “this is an exciting opportunity for us to further develop our web offer following 18 months of business development in this area. It will also allow us to clearly establish ourselves as the go-to company within the sporting goods industry for any sort of website – from a catalogue site to a full blown eCommerce proposition”.

UWT, established in 2012, has grown rapidly to become a leading web development company with a core group of local and national clients and with a unique user friendly web solution to suite all business sizes.

Solutions for Sport already has an exciting rosta of web clients with brands such as Aresson rounders and Vibram Five Fingers to sports retailers such as RJM Sports and bigfootbasketball.co.uk and we look forward to welcoming new customers on board” continued Sherratt.

Direct Marketing in the Sports Trade.

We’ve all seen first hand the impact of eCommerce on our industry over the past fifteen years and the continued theme of the big getting bigger.

But where does that leave the local independent sports retailer and his approach to the web. To go eCommerce or not to go eCommerce…that is the question.

Or is it?

Perhaps the biggest issue that I come across when retailers are considering a site is that they concentrate more on the design and look and feel and often spend virtually no time on planning how they will actually get traffic.

And of course traffic is key.

For many the oversight is the fact that they already have an audience that they can very quickly turn into core traffic without having to consider spending google adwords cash. In fact this traffic can be built before a website is even constructed.

Its called a subscriber list (or customer database.)

Subscriber List

Building a subscriber list is a super important first step to take when you want to start getting the word out about your business.

You don’t need a website to start building your subscriber list. All you need is a hosted sign up form.

If you already have your web address (URL), or even if you don’t, you can build a sign up page before you even begin your website.

There are many companies that offer this service and set up is often less than 5 minutes.(search “web sign up forms” for a list of suppliers)

A hosted sign up form lives on its own, with a unique URL that you can share anywhere – Facebook, Twitter, your email signature – wherever! It gives you a quick way to start building a subscriber list today without a website.

Social Media

But how do I build this database?

Traditionally the most successful way to collect customer data through, for example, a customer loyalty scheme. The customer completed their details (name, address, email etc) and the retailer communicated special offers etc through mail or email.

In the world of Social Media this whole data collection process is simplified. All you need is Facebook Fans or Twitter followers and these mediums can be used to communicate directly with the end user e.g Special offer this weekend on X.

To collect the data is also relatively straight forward – a sign at the till that says “Like us on Facebook and/or Follow us on Twitter”can be all you need.

Since more and more social networking is being done through mobile devices the consumer can be promoted to “like and follow” whilst they are standing waiting for, for example, their credit card transaction to go through.

No filling out of forms. No production of loyalty cards. No pressure.

Get your followers excited to sign up for your list by telling them about all the great stuff they can expect to get in their inbox. If you write regular blog posts, tell them that by signing up, they’ll never miss a post from you.

More importantly, with your sign up form in place, you can begin to migrate this audience and gather their email addresses.

Once you have the followers and subscribers this becomes your core marketing database.

It is extremely targeted (as the consumer has bothered to like/follow) and its local (since they came into the store.)

Once you have this information begin to engage your customers with regular news, competitions etc.

You have a powerful targeted marketing tool that costs nothing and that is likely to return a much greater level of revenue generation than a local newspaper advert.

Once you are comfortable with building the likes/followers in this way you can become more proactive and begin searching facebook and twitter for local users and their likes.

This requires a greater understanding of the way in which the sites are constructed however the results can be very exciting.

Its important to remember that before “social” became the buzz word we talked about “community” and at the heart of most communities is sport.

If the local sports retailer can tap into this community directly through social media then the results can be extremely beneficial.

Continue to build the list.

Another way to share your hosted form on social media is to reach out directly to friends and influencers who you think could benefit from being a part of your list. Don’t overdo it, though – sharing your form with a bunch of random people will make you look like a spammer.

Add a link to your hosted sign up form in your email signature. You don’t have to go into great detail explaining the value of your email list here, but do make it clear that you are linking to your email list.

If you regularly send emails to business associates, colleagues or anyone else in your industry, make a list of people who you think would be most interested in your email list, then message them directly to personally invite them to sign up for your list.

Keep talking.

If you follow these simple steps you will, in time, begin to build a well qualified and targeted database at minimal cost.

By this time you may, or may not, have constructed a website and begun to consider eCommerce solutions, however the big advantage that you will have is that you have grasped the basics of database marketing and will have a core audience with which you regular communicate.

If you link your list to software such as MailChimp you can easily (and cheaply) maintain the list and, more importantly, drive you customers back into store with special offers and news by regular email communication.

Integrate this within your social media activity and you will begin to access your customer though multiple touch points and benefit from increased brand exposure and increased footfall.

Good luck!

Man versus Machine

One of the pleasures of working in our industry is looking to the future.

I’ve always enjoyed launching products six months before the end consumer sees them and, indeed, working on product development much further ahead.

With this in mind I began thinking about what the future of sport may be – a much tougher question to consider but one, if you allow the mind to wander, that could open up all manner implications for our own sporting goods industry.

The first man v machine

In 1980, Carnegie Mellon University announced the formation of the $100,000 Fredkin Prize, named after computer pioneer Edward Fredkin, for anyone who could develop a computer capable of beating a world chess champion. In 1997, IBM’s Deep Blue team took up the challenge and proceeded to beat Gary Kasporov, the reigning world chess champion.

In 2011, IBM waged a similar battle on the TV game show Jeopardy. This time they pitted their Watson Computer against Ken Jennings and Paul Rudder, the all-time top Jeopardy champions. Again the computer came up the winner.

So if computers can win at chess and Jeopardy, are we about to see similar contests between robots and football players, driverless cars and F1 drivers, or robots and golf champions? More importantly, do we run the risk of automating these sports out of existence?

Thomas Frey, a futurist speaker, addressed this question in 2014 concluding – “Yes, we will see many more human-vs-machine staged competitions. But no, this won’t jeopardize the sporting industry.”

Even though the human-vs-machine competitions won’t be an issue, there are several possible threats around the corner for professional sports. Here’s why.

The Ultimate Form of Story Telling

Sports have become the ultimate form of story telling. Each contest is a test of the human spirit, with good guys and bad guys pairing off, with great drama, as people test their limits overcoming adversity, to achieve an unknown outcome. And all of this is happening in real time.

As a result, sports have become the ultimate form of fresh content in a world where relevance is gauged by timeliness and hyper-awareness is our competitive edge.

The value of sports broadcasts degrades exponentially faster than virtually any other form of content, so as a result, it assumes centre stage as we plan our days. Most media companies view sports as an anchor event around which every other programme is scheduled.

But that doesn’t mean the likes of cricket, football, and rugby are immune to change. Far from it.

Future Athletes

An athletic competition is only interesting if the athletes are relatively evenly paired, and if either team has the potential to win or lose their next competition.

We lose interest in lopsided competitions like America’s 1992 Dream Team with Michael Jordan, Larry Bird, Magic Johnson, and Scottie Pippin facing off against far less-qualified national teams in the 1992 Barcelona Olympics. People may have found it amusing for a few games, but it wasn’t a sustainable business model.

At the same time, teams with superior athletes have an advantage. So it’s in their best interest to do the best possible job of selecting, developing, and coaching each of their athletes.

While there is tremendous improvement being made to sporting equipment, protective gear, and training simulators, we are seeing many instances where technology goes too far. These include everything from performance enhancing equipment to genetically reengineering the athletes themselves.

Oscar Pistorius, with his artificial legs, became the first double leg amputee to participate in the 2012 Summer Olympics where he proceeded to win 2 gold and one silver metal. But this wasn’t without controversy.

Having gear that stimulates muscles, improves field awareness, or adds any unusual competitive advantage, will first lead to debate and later to a league ruling before being allowed or disallowed.

Much like the difference between performance enhancing drugs and legitimate drugs, many hair-splitting rulings will have to be made between acceptable and non-acceptable tools and equipment both inside and outside of the body.

It is, perhaps, in this field of smart technology where we will see the greatest change in our industry. We are already beginning to see the increase in products such as Fitbit bringing new sales opportunities and it is clear that this trend will continue.

Perhaps the most difficult decisions will have to be made when it comes to genetically engineering athletes from birth.

The Super Baby Problem

In 2014, American consumer genomics company 23andMe received a patent for a designer baby kit that would allow parents to pick and choose attributes for their soon-to-be-conceived kids.

But they were not the first. The Fertility Institutes’ clinic in Los Angeles delivered the first designer baby back in 2009.

Designer babies have long been a dinner party discussion topic with the understanding that the era of “super babies” will soon be upon us, with the prospects of creating bigger, faster, stronger humans.

Will these so-called super-babies grow up to become super-humans? And how long before we start seeing these fully grown offspring entering professional sports?

Once we are able to see how different they are, and over time the process for creating them will become increasingly complex, we’ll be faced with some difficult questions? During the ensuing debate we’ll hear questions like, “are they really still human?” and “since they weren’t conceived naturally, do they still have a soul?” and “what kind of grotesque things will 2nd and 3rd generation designer baby morph into?” and “how can we possibly compete against soul-less humans?”

On numerous occasions, officials will have to decide if these new lab-generated super-humans should be allowed to compete. Every decision will weigh heavily on whether people will want to continue watching and participating in the sport.

Final Thoughts

While it may appear from the outside that professional sports, as an industry, is conducting business as usual, a number of competing forces are threatening the nature of the entire industry.

We are already seeing the rapid rise of video game competitions. Will these and become part of the future sports industry?

If so will we begin to see a new genre of apparel and footwear aimed at this target much as we are seeing in, for example, cross fit?

In the end we will probably end up with far more questions than answers, but there is a whole new generation of kids kicking around on the playground wanting to know if their dreams can ever come true and how they can fulfil them.

Sport, for many, is the dream…but how different will sport be in the future.

The Future of Sports brands – To sell direct or not……..that is the question

The face of the UK and global sporting goods industry continues to change and evolve at pace.

As the boundaries between sports brands and sports retailers become more and more blurred so retailers become brands and brands become retailers.

But what does this mean for the future of sports retailing and when and how do brands looking to make the transition from wholesaler to direct seller make the shift.

THE BACKGROUND

When Sports Direct purchased Donnay all those years ago little did we know that the evolution of the “in house” brand strategy would influence the UK market place as much as it has.

It is now common place for our leading High Street, and Online, retailers to own a stable of brands and to use them to maximise their margins and to draw consumers in with attractive discounts.

Many of these brands, such as Dunlop and Slazenger, have built global brand equity and,as such, this enhances the value of the sales proposition in the consumers eyes.

These in house brands are core business drivers sitting alongside the premium brands who draw the consumers in but dont necessarily drive the volume of sales.

So where does that leave these the sports brands who are not retailer owned and how will they compete in the future.

Will they be happy to merely act as the “sprat that catches the mackerel” or will they advance their own retail strategies to wrestle an element of control back.

THE OPTIONS

The large global players are already well advanced in the development of their own retail strategy with, for example, adidas group stating – “Our Retail segment’s strategic vision is to become one of the top retailers in the world……….retail plays an important role for the growth of our Group and our brands.”

However the secondary or more specialist brands are slower to address the issue.

There is undoubtedly an underlying concern from these brands that, by selling direct, they will undermine their existing distribution channels and retail partners and risk losing that business.

The decision is dependent on a number of factors relating directly to the brand including factors such as the strength of the brand in their relevant sport/niche and the brand positioning; whether the approach is via retail and/or eCommerce, and whether the approach is for long term commercial gain or a short term sales and marketing strategy such as a pop-up shop.

We are already very familiar with the approach that many have take in recent years within the Outlet centres where the channel provides additional brand exposure but allows protection of clearance/closeout activity and for the company to still satisfy margin requirements by selling direct.

This is a relatively “clean” approach as, often, the products have been previously offered to retail partners first before they end up in the outlet store.

Another interesting development is the opening stores close to or within sporting events to further enhance the brand links with that sport. Prince, for example, have recently opened a stand alone store in Wimbledon and plan to roll out store openings in every major city where a Grand Slam tennis event is held.

Flagship stores have, in many cases, also been around for a period of time and allow the brands to maximise their marketing messages alongside the retail upside. This strategy is often the precursor to a more aggressive store opening plan

Nike’s global strategy, for example, outlined in 2010 at the company’s investor meeting held in New York, detailed plans to open approximately 250-300 new Nike-branded stores (mix of branded stores and factory outlet stores) worldwide over the next five years

Another interesting factor in the evolution of brands selling direct is the growth of the Chinese market place and the Chinese brands. The “Western world” approach has historically been built on a wholesale basis with, only in recent times, the retail element becoming more relevant. The Chinese brand model however has been historically built on the reverse.

The result is the evolution of brands such as Li Ning with over 4000 stores either directly owned or franchised which has created a critical mass allowing them to expand into the global sporting goods market.

THE DRIVING FORCES FOR CHANGE

Whatever the approach there are some key fundamentals that are driving these changes and key factors that need to be addressed if you are a sports brands looking to role out a “direct sell” strategy:

Margin – First and foremost direct selling allows the brand to realise manufacturer to retailer margin.

Build brand equity – the brand can broadcast the key marketing messages without fear of dilution or competitor intrusion.

Showcase the entire product range – inevitably retailers cannot carry the entire brand product range. A branded store selling direct can.

Retail pressure – as retailers further drive their own brand strategy brands must react by driving their own retail strategy.

the growth of eCommerce – eCommerce allows the brand to have a global platform combining the latest key marketing messages with the opportunity to purchase the latest products and, perhaps, alternative exclusive products.

the challenging economic climate – with some aspects of the global sporting goods market suffering brands are looking to mitigate their risk and be less beholden to retail partners who are looking to further dictate terms and erode brand equity and prices.

the need to get closer to the end user – the closer the brand is to the end user the more the consumer feels engaged with the brand and the easier it is to communicate in both directions.

THE CONCLUSION

The developments we are seeing in the marketplace look set to be with us for a while and thus any brand must consider the implications of these changes.

Our leading retailers look set to continue to grow and brands must review where they currently sit, and where they are likely to sit in the future marketplace and review their direct sell strategy accordingly.

There is no “one size fits all” strategy, however many believes that, in future, brands with a 100% wholesale strategy may become vulnerable -so perhaps it is time that those brands do indeed become retailers.

A sports trade online hub

Introduction

I was intrigued to come across a business article this weekend announcing that StreetHub, a network of independent retailers, had raised $2.6m (£1.7m) in their latest funding round, led by Octopus Ventures.

The group also received investments from Index Ventures, which has stakes in online retailers Asos, Farfetch and Net-a-Porter, among others, as well as a number of other angel investors.

The element that intrigued me was the phrase “network of independent retailers” and I began to dig deeper to establish whether there was anything in this business model that could be applied to our own sporting goods industry.

Streethub

Launched in 2013 with a $1.2m seed investment round Streethubs aim was to bring together a network of independent fashion retailers into one website. The main targets were those boutiques that did not have a web presence but did have ranges of fashion lines that they wished to sell to a global audience.

The online venture provides world-wide shipping, with click and collect and one hour Shutl delivery available in selected postcodes.

StreetHub co-founder Mandeep Singh said the success of the company’s iPhone app, which launched last year, had shown the firm “the compelling opportunity to also serve people who are keen to discover shops which are a little further afield too, and offer worldwide shipping”. According to StreetHub, now renamed Trouva, the app has been used by over 40,000 customers since it launched.

Trouva is the logical next step for us in our mission to help our amazing independent retailers to reach an even wider audience and help more customers to discover these inspiring, individual collections of products,” added Singh.

Sales Impact

Dan Rigby, owner of home and gift shop Rigby & Mac said: “Trouva is already having a significant impact on our sales.”He added that over the last month, the shop’s sales had gone up 10 per cent “thanks to Trouva”.

Lawrece Roullier White, owner of East Dulwich-based lifestyle boutique Roullier White, said: “Being part of the Trouva community is great, because it brings together a selection of retailers that stand out and offer a really inspirational mix of products, enabling shoppers to find something a bit different wherever they are based.”

Could it work in sports?

So, so far the principal is clear. Bring a network of independent retailers together, provide a simple platform for them to retail from and open up their product range to a wider audience.

However if we look a little closer its not that simple.

The success of Trouva is the fact the these individual boutiques have differing and unique product ranges that often cannot be found in other towns or cities. They may feature local designers, small companies and small product runs – a proposition not dissimilar to those products brought to market by notonthehighstreet.com.

With our sports retailers there are often common product ranges from the same suppliers and therefore a trouva environment would, arguably, only be driven by price – much as the amazon marketplace is driven and often to the detriment of the brand and the detriment of retail margins.

But hang on.

Perhaps it could work from the brand supplier side.

Sportshub

My work brings me into contact not only with large leading brands such as Uhlsport and Spalding, but also with smaller sports brands, start-ups and sporting goods manufacturers looking for a route to market.

Often my advice is simple – the wholesale route is becoming increasingly difficult; in each category there are many competing products; the consumer is demanding lower and lower prices; many retailers don’t want to take a risk on new brands/product etc etc…..

But imagine there was a credible alternative.

A place where new, niche, innovative products could be brought to market. A hub where these “artisan” brands could showcase their wares. A place where sporting goods products with limited distribution (and therefore not found on the High Street or the big online retailers) but with unique propositions could be found.

An Aladdins Cave of specialist sporting goods.

Challenges

Of course there would be some challenges. However one could imagine some strong PR driving initial growth as the platform would allow small businesses the chance to showcase their ranges and be a strong traffic driver.

Logistically the brands could simply create new product listings and all fulfilment would be done by them also with the hub simply taking a commission.

Not only could this provide a new revenue stream for these brands but it could also act as a shop window for, the wider trade to see new products – acting a little like a virtual trade show.

The future

We are not short of new brands coming into our industry but we are short of retailers to stock all of these new ranges forcing many new brands to sell direct either from their own website or through third party channels such as amazon.

Maybe, just maybe, a sportshub could create a new environment bringing them all together under one roof.

A simple way for the consumer to find the latest new and exciting thing in their sport.

A specialist environment but where the brand is in control of elements such as pricing and the way that the product is presented rather than the retailer.

An opportunity to ensure brands and product messages are not diluted.

I’m off to raise my seed capital if anyone fancies joining me….!

Solutions for Sport are hiring: Are you looking for a new challenge?

WEB CONTENT & MARKETING EXECUTIVE

Are you looking for an exciting digital position within the sporting goods industry?

We are looking for a web content & marketing executive who will be responsible for the following areas of our fast growing digital division;

  • Web content- inputting all product descriptions, content, prices and more into new and existing in house and client web platforms

  • image manipulation – ensuring all web images are standardised, resized and tagged

  • creating and maintaining meta tags and descriptions

  • creating wordpress websites following templated designs and ensuring the the final designs are delivered to brief and on time

  • designing and developing email campaigns using mailchimp.

  • creating and maintaining social media campaigns

Minimum Requirements:

Excellent English language skills

Adobe photoshop

familiarity with WordPress

familiarity with mailchimp

Social Media savvy

familiarity with google adwords campaigns

Salary £12-15,000 depending on experience

To apply email your cv and covering letter to paul@solutionsforsport.net

So you want to open a sports shop?

Paul Sherratt of Solutions for Sport takes a closer look at the pitfalls facing any new entrants into sports retail.

The future

As the cycle begins again and the sales meetings and trade shows come round I find myself on the road again visiting sports shops throughout the UK & Ireland and pondering what does the future hold for our industry?.

I’ve said many times before in this column that things are changing faster than they have ever done – the bigger are getting bigger, the specialists in many areas are doing well but the “all things to all people” stores are slowly dying – and I seem to be faced more and more with sports shops who are getting further and further away from what consumers except to find on the High Street.

Poor shop fronts, merchandising, point of sale, signage, ranges and more leave many of our sports stores seemingly stuck in the 1980’s, or best the 1990’s!

Of course, its not true for all, but I began to ask myself what does it take to open a sports shop in the UK & Ireland in 2015, what mistakes should one avoid and what best practice can be employed.

At first site there are a number of core areas to consider

Will you be online, bricks and mortar or both?

Understand that if you are launching a transactional website that this needs to be treated the same as if you were opening a physical store.

Time and time again I see retailers investing in websites only to be disappointed with the results when it is complete. The analogy is simple – you can build the best online store in the world with the best product range and prices but if you don’t know how to run it or don’t drive traffic to it it is the equivalent of opening a sports shop if the middle of a field. No one will visit, No one will buy and you will have no business.

Likewise if you are opening a store consider the area. Where is it. What are the local sporting amenities like?

Will you specialise? If so which sport(s)

Its clear the in the past few years the sports retailers that have specialised seem to be generating strong revenues.

Sports such as running, triathlon and cycling have all seen steady growth and sports participation trends seem to indicate a shift from traditional team sports to more individual sports.

Prospective sports retailers could do well to take note of these trends and establish where the future lies, whether there is still some growth opportunities or whether there is a new trend just around the corner.

Don’t underestimate the power of the multiple.

If you have a sports multiple on your doorstep look for a point of difference – alternative brands and different product ranges are a starting point. You will always find it difficult to compete on price and therefore don’t be tempted to go head to head – you will never win.

Instead focus on service and breadth of range and look to build a loyal customer base based on these stronger business development principals.

Consider a buying group?

As the industry consolidates so too do the buying groups. With STAG and Intersport now the only remaining UK & Ireland buying groups any new sports retailer has a clear choice.

Both offer support to in a variety of areas from preferential credit card rates through to merchandising and more.

Yes they have selective criteria for new members and both will consider the financial robustness of your business – admittedly if you are a start up this is something that is difficult to gauge if – however both buying groups will also happily engage in dialogue and may well provide invaluable advice.

Do you have links into local community?

If you are considering opening a high street store then consider closely where your audience are.

If you are providing a specialist offer then make sure that you have, or can create, close links with that specialist community i.e. if you are a racket specialist engage the local tennis, squash and badminton clubs or as a running store link into local running clubs.

These consumers will be the back bone of your local support.

Service

Consider your specialist sports store as the artisan butcher or baker. If you can provide great product ranges and superb service then price becomes less of an issue.

Go that extra mile.

What else can you bring in to encourage the consumer?

Perhaps something to test the product such as a treadmill or gait analysis machine, or an added value investment such as a stringing and printing machine etc.

The more you can offer and the stronger the point of difference the more successful you will be.

How will you merchandise

Todays successful Hight Street stores focus on directing the consumer to core store areas and into core products.

Clever use of shop fittings, signage and point of sale is the key to this – look at some of your own favourite stores and try and apply the same rules.

Make sure you keep things clean. Less is more. Give the consumer clear sign posts as to what you are what you sell and what areas of the shop cater for

How will you connect? Social Media? Website -eCommerce or not

Multiple touch points are key. You customer will expect to find you online so you need to consider a website (transactional or not), your social media presence, local sponsorship/activity, perhaps even local press or radio.

The more relevant touch points you have the more successful you will be.

Use as many resources as you can to research the market.

Read the trade magazines, go to the trade shows, don’t be afraid to pick up the phone – you’d be amazed how much advise you can glean from such activity.

Don’t give up.

Do I believe that opening a new sports store in 2015 is viable? – theres no doubt that there still opportunities out there both and and off line, however the days of the slightly disorganised, old fashion, small and dark sports shop is over.

The modern day consumer expects an environment where they can interact and connect with the retailer and his product range.

He or she does not want to be wading through rows and rows of apparel on clothing rails and to unsure which area of the shop they can find what they are looking for.

Less is more is undoubtedly the current trend and if any new entrants into our industry (or any existing ones for that matter) can embrace this then there may well be a sounds future for them in the sports trade.

One giant sports trade database.

JustEat

As I sit here enjoying my summer holiday I allow my mind the chance to wander a little.

I’ve just read the latest results from JustEat – The company, which listed on the London market in April of last year, said that sales had increased 62pc to £157m as the company processed takeaway orders worth more than £1bn for its 8.1m customers last year.

So whats’ that got to do with the sports trade I hear you ask.

Well, the core issue that JustEat addressed within the fast food market, and the reason why it has grown so rapidly, was the simple fact that whilst most local independent takeaway businesses knew that they should be online to attract a greater share of the market, most did not know how to manage this process or did not have the resources or expertise to implement such a strategy.

Which got me thinking. How many of our sports retailers face exactly the same issue?

I lost count of the number of conversations that I was having with sports retailers who could see that the sporting goods industry around them was changing faster than ever and yet they felt, for various reasons, unable to adjust and adapt to these changes to such an extent that I launched our own Solutions for Sport New Media division to address these demands and now continue to see an ever increasing number of clients come knocking at the door looking for simple eCommerce solutions.

Whilst each new business is different they all share a common requirement – supplier data. They need, as a minimum, images and product descriptions to ensure that their sites are up to date with the latest products.

Of course as we create more and more sites then this data becomes common to an increasing number of clients and as such we are slowly creating our very own in house database of the latest product information from multiple suppliers using this as the basis for site updates and effectively building our very own central database which holds supplier product information.

One giant database

If we think on a bigger scale lets imagine a database that could hold article numbers/product codes, product names, bar codes, images, descriptions, and perhaps even stock availability from the majority of core sporting goods suppliers.

One vast system that represented sports industry data on such a scale that subscribing members could access this data to use for their own purposes whether it be to populate their stock system, or even their own website.

For the forward thinking eCommerce retailers much of this type of information is already being requested and is already being supplied by many within our industry.

Intersport

Lets take Intersport, for example, who are requesting supplier data to enable them to drive forward their central stock information strategy.

The ultimate objective is for all Intersport members to have an EPOS system enabling Head Office to better analyse, amongst other things, sell through and top sellers, however this system can only be effective if ALL supplier new product information is uploaded to the EPOS system.

And, of course, this is exactly what suppliers are, logically, being requested to assist with.

OK, it does not include product images or descriptions, however if one takes this principal forward and it did include such information, then in theory, each individual Intersport member could tailor an eCommerce offer specific to their store and to the lines that they stock.

One could imagine a website where the marketing of the site would be done centrally (as is the JustEat model) and the actual set up of a site for each individual member would be as simple as checking a few boxes.

In reality this is not the route that this particular business has chosen, instead deciding that a central site would be more effective, however what’s to stop another collective, STAG for example, taking this route and providing an exciting member benefit. Encouraging suppliers to submit this data and members to support the lines that are listed would be mutually beneficial for all parties.

Online Store

Lets imagine a scenario where a retailer could set up his own online store by simply registering a domain name, adding his logo/colours etc and then choosing from an already preloaded database that has the bulk of all the latest products from his core suppliers.

No time spent uploading new lines – simply choose which price to sell at, select the lines that he has chosen to purchase, and hence have in stock, and amend any other element the retailer sees fit.

As easy as listing an item on amazon marketplace where, by simply inputting a bar code, all the required information is already to hand.

OK- maybe the infrastructure would need to be a little more sophisticated i.e. enable a huge variety of shop fronts, fonts, styles etc to allow the retailer to maintain a point of difference and reinforce their identity, but if the data was gathered then this future could be conceivable.

Data

The biggest hurdle then is data.

Or is it.

As our eCommerce retailers become more demanding will it become every day practice for suppliers to simply provide a .csv file to our retail partners containing everything they need?

If so then a simple upload of these to the central database would provide everything required.

So there you have it.

It all seems so simple when you allow your mind to wander and to think what the future may hold -when I get back from holiday I might just start building that database!

Private label – an opportunity open even to the smallest

In recent years the own brand, or private label, phenomenon has been making big headlines.
In grocery Aldi and Lidl continue to make huge strides with their combination of a small targeted number of branded products sitting alongside their own private label offerings.

In our own sporting goods industry many of our successful retailers follow a similar model.

Over time Sports Direct, for example, has grown its own label strategy by purchasing distressed brands and then selling them at a discount within the stores thus making a manufacturer to retail margin (as opposed to a manufacturer to wholesale margin).

Decathlon (still the worlds biggest retailer of sporting goods) uses exactly the same strategy but this time has simply pushed its own brands so much over time that they have in their own right become brands.

The trend can be seen right through our trade with the likes of JD Sport, MandM, the Intersport group, DW Sports and others all finding the right mix between the international brands and their own brands to boost margins and to provide a point of difference to the end consumer.

Online retail specialists, such as Wiggle and StartFitness are also getting in on the act

Consumers demand brands for the quality assurance and emotional satisfaction, however it is becoming ever more apparent in the sporting goods market that these brands do not have to be manufacturer brands.

The Decathlon Approach
For twenty years Decathlon followed a single brand policy with great success.

Today, the Decathlon Group has moved on from this approach and created specialised brands each one of them positioned on a precise sporting branch of industry: b’Twin, for example, specialises in mountain bikes and road bikes; Wedze in boardsport on snow, and Kalenji in walking, running and cross-country running.

Together, these “passion-brands” make the Decathlon group one of the first ten world’s manufacturers of the sector behind Quiksilver, Nike, Adidas, Timberland, Columbia, Salomon, The North Face and Patagonia

Interestingly this strategy has also allowed Decathlon to not only compete at the “mass market” end of the market but, by siting these “passion brands” in the areas where the product development teams can embrace the sport (e.g. in the mountain or by the sea) they have been able to create technically excellent products at higher price points with higher margins that can credibly compete against the international sporting goods manufacturers.

The Sports Direct Approach
If we compare the SDI approach with Decathlon the “passion-brand” approach has been developed not by stating from scratch and building up the brand through in house teams but, predominately, by acquisition.

This results in the lines between “international brands” and in-house/private label brands becoming blurred – arguably a good thing as the consumer is often presented with a “branded” product at an exceptional price unaware that the brand is, in fact, owned by SDI and to all intents and purpose is thus a private label.

The challenge and opportunity facing SDI is to develop the higher margin and higher price point end of the business by producing more technically acceptable product. This is easier to achieve if the acquired brands (e.g. Dunlop and Slazenger) have a heritage that allows price points to be pushed, however Decathlon appears to have a distinct R&D advantage over its rival in this area at present.

The Independent Retail opportunity
With this approach of private label business sitting alongside core branded lines set to continue in the near future the question is whether the smaller sports retailers are able to take advantage of this trend.

Clearly there are several areas to explore when considering an own label approach and these factors are often the main barriers to the smaller independent retailer looking at the topic more seriously:

Expertise
Problem: You have no experience at all in dealing with factories, product design, importing etc.
Solution: Use a reputable agent or company that has expertise in this area, a proven track record and can site examples of the work that they have done and provide testimonials from past and current clients.

Minimum Order Quantities (MOQ’s)
Problem: As with any product line MOQ’s will apply based on a variety of factors such as material used, size of factory, type of item etc etc. Often these MOQ’s can be very high compared to the sale opportunity and thus the project cannot proceed.
Solution: Club together with fellow minded retailers and spread the MOQ amongst the members. This results in all the advantages of improved margin, points of difference etc but without the excessive cash flow risk.

Warehouse Space
Problem: small retailers do not often have the storage space to store large quantities of products and are used to operating a “little and often” business model.
Solution: rent some small space for a limited period time using cost effective businesses such as Big Yellow Storage.

Lead Times
Problem: lead times, particularly from the Far East can be as much as 4-6 months depending on factors such as time of year, type of product being manufactured etc.
Solution: Often this issue can simply be solved by improved planning. Once you get into the mindset of long lead times the business can be planned accordingly.

As my own business has begun to address these issues on behalf of clients we have seen for ourselves not only the ease with which many of the issues can be overcome but, more importantly, the additional revenue and margin gains that these businesses have experienced through developing their own brand strategy.

Some clients have progressed from taking generic branded products (such as a basic t-shirt or hoody) and adding some branding and changing the back neck label to trial the idea, whilst others have taken the leap having the confidence to commit to, for example, 1000 sock tri-packs knowing that, based on past sales history, that the stock can be sold.

Whatever your approach it is clear that, when done effectively, the own brand strategy can reap rewards.