Long-term growth plans are essential for any sports retailer, but in an industry that’s undergoing a rapid transformation driven by digital technology and constantly shifting consumer demands and trends, forecasting the future has never been more difficult.
Although there have been signs over the past few years that the UK economy continues to recover, the retail industry is struggling to keep pace. In March the Bank of England forecast GDP growth of 2.2 per cent this year, yet at the same time the Office for National Statistics reported retail sales volumes had decreased by 1.3 per cent.
It’s difficult to pinpoint exactly why retail sales are declining, but what is clear is that it’s never been a more challenging marketplace. Many sports retailers, in particular, seem locked into a survival of the fittest, where only those that innovate will flourish.
One area that does appear to be affecting retail sales is the consumer shift towards spending more money on leisure activities and travel and less on shopping. There is even evidence from the uber-wealthy that they are spending a greater percentage of their disposable income on experiences rather than material things.
It’s a trend that’s already been seen by some retailers, with high street retailing trying to combine a leisure experience with shopping and making the shopping experience more interactive, rewarding and efficient.
Use of technology
The Apple store concept was an early adopter of such a strategy, with the company happy to see shoppers hanging out in-store, but there is evidence of continued development of this strategy within our own trade.
Pro:Direct’s LDN19 concept uses touch screen technology that allows consumers to immerse themselves deeper into a product or brand experience, establishing the store as a go-to destination for the football product aficionado.
Likewise, adidas’ use of what it calls endless aisle technology, which allows shoppers to see more trainer options than are actually available in-store on that day, allows it to tackle the age old bricks-and-mortar challenge of stock space.
Kerry Lemos, chief executive of specialist software company Retail Pro International, explains: “A couple of years ago adidas realised that while it was impossible for any of its retailers to carry a full selection of adidas shoes, it was losing sales simply because shoppers were unaware of all the offerings available.
“With endless aisle technology in stores, shoppers can try on shoes that are physically present and then use the technology to see all the other varieties available to them.”
According to adidas, this technology has led to a 40 per cent increase in its footwear sales. It is these kinds of interactions that are enriching the in-store experience for customers. As younger consumers gain more buying power, these elements will become increasingly important, allowing them to use digital and physical tools to enhance their experience.
But it’s not just about technology. Creating a comfortable retail environment also adds to the consumer experience. Never is this more evident than in the retail experience at cycle brand Rapha.
Combining in-store interactivity with video imagery and a destination cafe allows cyclists to combine their leisure activity with a shopping experience, allowing them to spend as much time immersed in the product and brand environment, thus further cementing their connection with Rapha.
The concept of breakfasts, snacks and beers in a road cycling shop café that shows live cycle events on big screens is incredibly appealing to the keen cyclist.
I’ve written many times in this column about the need to change and evolve, the need to understand and embrace the internet, ecommerce, digital marketing, in-store investment and multiple fulfilment options, but all these come at a cost.
Many sports retailers are faced with the dilemma of not being able to afford to invest, but by not investing they become more and more detached from the expectations of the end user and the business suffers further.
Some fear too that online competition is making it increasingly difficult to compete and continue to search for new ways to attract consumers. However, there are some examples, outside of our own industry, where high street retailers have begun to fight back.
Waterstones has endured the ecommerce onslaught, with the giant that is Amazon as its nemesis.
James Daunt, managing director of Waterstones, says he’s combated Amazon by making his company’s shops more fun and the shopping experience social.
Daunt adds: “High street retailing is a recreational rather than a practical exercise now to a significant degree.” As a demonstration of this, the Waterstones store in Tottenham Court Road, London features a bar and pop-up cinema in the basement.
Interactivity on a budget
If I think back to the early JJB out-of-town sheds, many featured in-store basketball courts. Perhaps they were ahead of their time? But can retailers embrace this concept on a shoestring budget?
What about in-store screenings of key sporting events, a pop-up cafe on a weekend or in-store yoga/fitness classes?
Helen Dickinson chief executive of the British Retail Consortium, says consumers are looking for experience, excitement and theatre and often the physical environment - as opposed to online - is a better place to do that.
It strikes me that, as a trade, we are at a distinct advantage here, as we have access to that very excitement from the sporting events surrounding us. If a person is in that environment, there’s no doubt they are more inclined to connect with the product and purchase accordingly.
What is clear is if sports retailers do not invest, reinvent and remain current, many will fail. It really does appear to be a case of evolve or die.