The rise of extreme events

A record total of 253,930 people entered the ballot for the 2017 Virgin Money London Marathon. With 50,000 runners accepted and, with a proportion of entrants dropping out due to illness, injury or other reasons before Race Day up to 45,000 runners finally completed the race.

There is no doubt that the popularity of this event continues to grow, and, in fact, since the event first started 36 years ago it is true to say that the profile of running as a sport has seen a huge evolution and has grown to be a mainstream form of exercise.

However, in recent years, it is not running in its purest form that has been attracting more and more participants – the sport of running and its industry alike have undergone a metamorphosis of sorts, where for many runners, the main goal of competing in events is finishing a race–and having fun doing it–rather than breaking records.This shift in the sport is due in large part to the growth of popularity of non-traditional races, such as the Tough Mudder, The Colour Run and Rat Race.

What’s driving the growth?

But what is driving the growth of participation in non-traditional running events?

On the one hand, the sport of running as a whole has experienced unprecedented growth. Sports Marketing Surveys Inc (SMS) estimates the UK’s running population has reached an impressive 10.5million runners with one in five adults running four or more times a year, while 25% of under-18s also qualify as active runners under these criteria.

Yet, leaders in the running industry are quick to note that it is not just the growing participation in the sport that is driving interest in non-traditional events. Many of these leaders believe that society’s shift toward a more localised lifestyle is at the root of the growth of non-traditional running events.

In the US, for example, Mikal Peveto of adidas America comments – “There is a seat change going on in the world, where we are embracing our smallness and local communities. Whether it’s fresh foods and farming or stores becoming a more vital part of the communities they’re in, we are seeing a natural reconfiguration of our values in terms of localness. The same applies to running. Today, the fastest growing events in the sport aren’t established marathons, but things like obstacle course races and the Tough Mudder, which are all very community based,”

Many market commentators also believe that there are economic reasons behind the growth of running and the associated Extreme Events.

Running is accessible. Equipment requirements are low. There is no coaching required, rules to learn, clubs to join. Simply put on your shoes and off you go!.

Certainly growth in running has accelerated since 2008 – perhaps directly influenced by the challenging economic period that has presided since that time.

More Women

Along with economics, another interesting aspect is the unique role that women’s growing interest in running has played in shaping the sport.

Many of the women signing up for ultra marathons and marathons today will take for granted their right to compete. But only 40 years ago, it was not an option.

As recently as the Eighties, it was thought to be too dangerous for women to run long distances. It wasn’t until the late Seventies that big city marathons began to allow women to compete. And women were not allowed to take part in the marathon at the Olympics until 1984.

Since then, women’s participation in marathons, ultra marathons, and adventure races has flourished.

There are likely a number of key reasons behind this evolution but certainly it does seem that a lot of women are using endurance races and events as a target to help motivate them to lose weight, or improve their fitness.

Social Media is undoubtedly a driver with many women using posts as a self motivational tool -much in the same way that those attending weight loss groups traditionally used their peer group within the circle to “compete against” they are now able to reach out to their wider peer group to help encourage them to achieve their goals.

It is also true that this “social” side has been the driver towards increased participation in non timed, but fun, events.

Impact and opportunities for the industry

With the growing participation of women in the sport of running and a shift in the types of events interesting runners our own industry is seeing some changes and some opportunities.

Extreme events have driven both the growth in specialist products (think innov8 and the cross over products from trail running) as well as more “informal” running apparel (think leggings, performance t’s etc).

In fact the latter category (in particular leggings) has seen the boundaries between street fashion and sport once again become blurred.

Brands such as Sweaty Betty and Lululemon have driven demand and several online retailers have launched sportswear verticals, such as Boohoo Fit, Missguided Active and Net-a-Sporter.

Likewise, as retailers recognise the “local/community” element to many of these events, the proactive dealers have created bespoke printed apparel options to further enhance both the fun and (often) team element of the race.

The future.

Given the fast and sizeable growth of participation in the sport of running recently and the non-traditional races facilitating that growth, where is the sport of running headed?

As we have already established, running isn’t an elitist sport in terms of costs. On top of that, research shows that most participants are of a higher educated, higher income bracket and professionally employed base. Therefore, they have the means to travel and pay entry fees and other associated costs with running.

The interesting shift is going to be watching and paying attention to the next generation.

How will millennials and their approach and attitudes towards life–whether it’s how they’re employed, where they live and how they spend and donate–impact the sport? Will the popularity of non-traditional events continue to grow with the millennials?

My own conclusion is that, as todays consumer continues to search for experience based events these sorts of activities will indeed grow. Perhaps we will end up with a sliding scale of events from the very extreme (think multi-day/multi discipline) through to the more traditional 5/10k as the consumer continues to demand more choice.

It does seem that participation numbers look set to continue to grow and thus, as an industry, the opportunities will continue to become available.

I’m off to get my old running shoes on and get dirty……

The Future of Sports Retail

I’ve written regularly in this column about the rapid change of pace currently being experienced within our trade.

The influencing factors are varied, but a new morality within which our lives are being deregulated, with more flexibility and different and more varied working hours, is certainly one element driving this change.

Consumers have multiple tools to connect with brands and products and hyper-connectivity is giving a greater power to the shopper and influencing the way in which business is being transacted.

We are becoming a society of value hunters -looking for the best bargain and relishing the experience of sharing our value experiences within our social circle to create a status within our peer groups and, of course, we are embracing online shopping in ever increasing numbers across all elements of consumer spend.

Online spend set to double

A report released by O2 in 2014 concluded that the proportion of online spend will double by 2020 and account for over 20% of all retail sales – up from just under 11% in 2012, whilst physical stores will see their share of spending decline by 10.6 percentage points over the same period.

However, whilst the increase in online spending comes at the expense of sales in physical stores, this doesn’t signal the much-lauded death of the high street. Instead, the report shows the extent to which the high street will impact overall retail sales and why it cannot be ignored.

As people shift from bricks to clicks, the relationship between online and high-street retailers is evolving as retailers create a world where experiences flow naturally between home and store, street and aisle, mobile and market.

Technology is breathing new life into the high street. With more and more people shopping on their smart phones and tablets, stores are no longer just about buying.

As online sales increase, the role of the high street store will evolve, provoking counter-innovation from brands and an increase in the “show rooming” trend where stores become experience rather than sales led.

The report shows that a quarter of all shoppers are hitting the high street, no longer to buy, but to socialise with friends and family. Half (51%) of us go to shops to be entertained, a third (33%) to eat out and three-quarters to be inspired.

These results show there is a clear opportunity for retailers to continue to introduce social spaces and turn shopping into a source of entertainment – the latest form of leisure. As a result, stores will see an increasing focus on engagement, providing the shopper with tactile and sensory experiences which cannot be replicated online.

How can the sporting goods industry respond.

If we look more closely at these conclusions and ask what impact this is likely to have on the sporting goods industry, one obvious link is the relationship between sport as a leisure activity and shopping.

In much the same way that cinemas and food outlets have grown the shopping experience, whereby consumers populate destination shopping centres for the the whole day and embrace multiple activities can the sport, and sporting goods retailers, enhance the proposition?

On a recent visit to Dubai I found myself embracing this very scenario where, in one of the worlds largest shopping malls I skied in the morning, shopped in the afternoon and dined in the evening.

The sports retailers were clustered around the focal point of the indoor ski slope and in another part of the mall the ice rink.

As the definition of “shopping” becomes broader can the relationship between sport and shopping evolve and the sports brands and retailer be a part of this change?

Technology

Savvy sports retailers can certainly strengthen customer relationships, and increase interaction, by creating spaces and experiences which will inspire consumers to share their shopping experiences either by commenting, photographing or broadcasting their in-store interactions via their social networks and sport offers the perfect environment for this activity.

Whether it be testing a demo racket or golf club, shooting a football at a virtual goal whilst trying new boots or trying on the latest outfit whilst looking in an interactive mirror all these experiences will enhance your experience.

There are already some examples emerging in our industry with Oxford Streets Nike store or Pro Direct’s LDN19 and undoubtedly sports retailers who seamlessly connect the in-store and online experience will see the biggest gains with the savviest taking the opportunity to deliver timely, tailored offers and discounts direct to the palm of our hands.

The O2 report concludes that this seamless integration between online and offline shopping will continue to put the high street at the heart of customers’ online experiences; 85% of online shoppers return products in store and 75% go to stores to collect products bought online. The popularity of click and collect is expected to increase further to 2020, growing by 260% to 7% of all retail sales by 2020.

Feilim Mackle, Director of Sales and Service at O2, comments: “Technology is breathing new life into the high street. With more and more people shopping on their smart phones and tablets, stores are no longer just about buying. They are becoming go-to destinations for social, inspiring and rewarding experiences that ultimately drive sales online.

The High Street is here to stay.

Retailers have to recognise that the high street store is here to stay but its role has fundamentally changed. As the distinction between digital and physical becomes increasingly outdated, the brands that truly embrace technology to create a seamless experience for all their customers, wherever they choose to shop, will ultimately win the greatest share of both sales and customer loyalty.

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!

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!

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.

Trade Show hangover

This time last year I wrote an article discussing the future of sports trade shows, how they are may evolve over time and what place they may have in the sporting good industry of, say, 2020.

Twelve months on and, following the recent STAG and Intersport Shows, some of the answers are beginning to emerge and some questions still remain.

The conclusions are still a little raw but, on reflection, my own view is that things need to change, and already are changing.

Something old something new

I write this article sitting on a train meandering its way through Europe from Stuttgart to Ljubljana. Its a landscape that will change over the next eight or so hours, taking me from a modern efficient Germany with an economy that is still driving the Eurozone, to a more traditional, some would say old fashion, world that is Slovenia.

In some respects these same difference are reflected in our own sports trade – the modern retailer embracing eCommerce, social media and appealing to “today’s consumer” versus the old, perhaps even tired, sports shop struggling to find their way in an ever changing landscape.

Nowhere are these differences more evident than at the trade shows.

The show itself

There are those retailers that plan their trade show activity with military precision. Trade manuals and supplier offers are embraced and a “plan of attack” formulated to ensure they gain the very maximum from whats on offer.

Conversely there are those that, sadly, appear to embrace a weekend in the Cotswolds rather than an opportunity to develop their businesses with new products and new ideas – despite the intervention of the buying groups to ensure that this is not the key driver behind their appearance at the event.

There are those that hunger for knowledge attending, as nearly half of the STAG members did for example, seminars to develop their knowledge of a particular subject.

There are those that find it hard to change and take on board this new knowledge – as many Intersport members found following their three hour show introduction.

Time for change.

But what is clear is that we all need to change.

Suppliers and retailers alike.

The way we work together needs to be reassessed.

Trade Shows are a big investment for suppliers in financial and emotional terms and its no longer acceptable to be told “I have run out of time to place an order with you” or “that all looks great can the rep come and see me”.

There are very few independent business owners that like to be told what they should and should not buy, however the whole principal of a buying group should be, in my eyes, to embrace this concept for the “greater good”.

Sure, we all know that it is dangerous to have too many eggs in one basket – to be heavily reliant on one major supplier – however if that supplier is driving the global sporting goods industry, and one is able to trade profitably with the lines on offer, then I can see the positives in the argument.

Pre-selection

In the (nearly) twenty five years I have had in this trade one of the major shifts has been the way the retailers buy.

Remember the days when they wanted to swing the racket, try on the glove, or pick up the bat?

Now, in my experience, many are happy simply to buy “off plan”. A CAD or an image will suffice.

Are there reps out there still taking 6 sample bags into each call?

Take this to its logical conclusion and the buyers are, effectively, self selecting their lines, driven as much by the marketing collateral surrounding the product as to whether or not the product is any good.

As a buying group member should I therefore rely on the experts within the group to pre select for me? Take many of the buying decisions away from me? Select my core lines on my behalf leaving me more time to find the elements that will give me a point of difference?

I think thats exactly what we will see.

Certainly if we look to Intersport in many European countries suppliers are not present at the show itself.

The core “pre selected lines” are presented in a core Intersport area (much as we seen evolving over the past few years in the UK) whilst the suppliers simply set up their show stand but are not present during the show itself.

Talking to many colleagues across the continent it appears the general consensus is that this works.

What is clear is that it prevents the negativity of suppliers moaning that nobody has been on the stand and focusses them, firstly, on working more closely with the group to gain a “recommended buy/mandatory buy/core selection” (or whatever the criteria may be) and, secondly, to focus on working with their key partners within the buying group to further enhance their offer.

But what about the STAG environment? Can this work in the same way?

The answer is probably not, not least because the nature of the members is different and there is not the ability to tie into international deals/SMU’s etc in the way that Intersport members can.

So what chance there?

Different venue? Different time of year? More guidance? No show at all?

The questions, I know, are constantly being asked internally – but thats the easy bit!

To find the solution is much harder.

Times are a changing

What is evident is that things are changing and will continue to change.

Market commentators often quote “the cycle of trade shows” and, in conclusion, its safe to say that we are in a part of the cycle where, certainly based on the trade shows of the past, shows are on the decline.

More accurately they are probably evolving.

And as the trade continues to evolve so will the format.

So. Until such time as I suddenly have 2 new weeks to enjoy back in the office every December Ill see you next year.

Same time.

Same place.

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….!

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!

The potential pitfalls in football sponsorship

As I settle down to pen this article there is one topic dominating the news in the sporting world – the FIFA debacle.

At all levels the game of football has been moved firmly into the spotlight and, as part of this focus, some parties are now looking towards FIFA sponsors for comment and pressure.

This got me thinking about the potential pitfalls in sport sponsorship and what, if anything, can be done by sponsors when events such as those happening in Zurich hit the headlines.

A little research soon brought up some interesting conflicts that have arisen in the sporting world over the last fews years.

But first some statistics;
In 2011, the worldwide total revenue generated through sport sponsorship was $35.13 billion (according to PriceWaterhouseCoopers) and was predicted to steadily increase to over $45 billion by today.

The principal of sports sponsorship is to transfer the goodwill that supporters feel for the sport to the benefit of a brands equity and therefore any dilution of this message is not welcome from a sponsors perspective.

Not quite perfection.

Lets take, for example the winning goal in the 2010 FIFA World Cup?
Germany’s Mario Gatze 113 minute winner was a dramatic conclusion to the event but bitter sweet for the sponsors – wearing adidas kit but Nike boots, neither brand was able to fully capitalise on this captivating moment and therefore exact images of the moment were not subsequently used by either brand.

Of course it would have been a very different story if Gatze had poked in the winner wearing Predators or if Germany had been wearing Nike kit.

Sticking with football, it comes as no surprise that most sponsorship conflicts tend to occur between player agreement and team agreements.

Premier League
The Premier League model player contract (Form 26) contains provisions which obliges players to take part in official club events and promotional activities and attempts to anticipate how that should interact with the player’s own private endorsements.

One would anticipate that this ensures that the position is clear and that the player, whilst on club business, should wear the apparel relating to the club apparel sponsor, however in reality something as innocuous as a team photo can lead to direct conflict if a player has a separate apparel contract under their own commercial terms.
Neither party is in breach of contract, however there is no doubt that brand dilution and consumer confusion can occur in such circumstances.

Coca-Cola v Pepsi
Setting aside player versus club issues a 2013 Manchester United pre season friendly in Australia highlighted the importance of commercial sponsorships in football.
It appears, according to the Australian media, that Manchester United were willing to disappoint over 80,000 fans in Sydney in row over fizzy drinks.
Just 20 minutes before kick-off at the ANZ Stadium, United were refusing to take the pitch as long as the stadium’s giant screens were flashing up ads for Coca-Cola.
This was unacceptable to Manchester United’s commercial department who were on the brink of signing a multi-million pound sponsorship deal with Pepsi in the Asian-Pacific region.
The deal does not even include Australia, but United were not going to take any chances about offending Pepsi.
“Man U’s commercial department threatened that the team would not run out if the Cola-Cola sign stayed on the big screen,” an ANZ Stadium spokesman confirmed.
Coca-Cola are one of the main backers of the stadium which complicated the issue.

The Football Federation of Australia were even called in to help mediate proceedings and a compromise was finally reached where all Coke ads were replaced by ads for Mount Franklin water – another Coca-Cola Amatil product, but not a direct rival to Pepsi.

The Tiger Woods Scandal
In recent times the Tiger Woods scandal further highlighted the perils of brand association with disgraced athletes.

The Bedford Group recently reported on a US study following the breaking of the Woods story and the direct commercial impact that it had on two of the key sponsors that chose to stick by their man – EA Sports and Nike.
The study, conducted by Bruneau, C. & Crawford, A.(2010) concluded that, at initial release of the scandal, these two companies suffered the greatest cumulative stock loss of 5.55%.

The study shows that these two companies experienced the biggest initial negative impact from the scandal than the companies that chose to end their sponsorship deals with Woods.

In spite of this though, the study also shows that Nike and EA Sports appear to have recovered from those initial losses and that stock price reflects the perception of future profits and growth.
The case demonstrates that an athlete or team facing negative publicity can be forgiven by U.S. consumers in a fairly short time and overall, that the U.S. consumer public is relatively forgiving of companies that sponsor athletes or teams that incur the negative publicity.

Conclusion

Its clear then, that as sport and leisure becomes increasingly important, that sport sponsorship looks set to grow even further.

Being involved directly in the sport, many of us can recall the benefits of having the right athlete at the right time – think, for example, Freddie and KP for Woodworm or Nadal & Roddick for Babolat – sport sponsorships can clearly produce innumerable benefits but companies have to recognise that there are inherent potential risks.

Who knows what the FIFA fallout will be and it the likes of VISA, McDonalds, adidas and others will be forced to rethink their football sponsorship strategy.

What is clear is that companies should be sure to have a risk management strategy before entering a sport sponsorship agreement and be fully aware of the pitfalls that may arise.