Industry :: p47
Southern Africa’s business-to-business magazine for the sport, outdoor and leisure industries • Vol 32 No 4 • August/September 2011
Outdoor: the latest product launches Sandals: new styles in lifestyle fashion and performance Retailing: designing a store for security 2010 August/September :: Sports Trader
p48 :: Industry
Since Sepp Blatter in 2006 showed the card with South Africa’s name on as the host of the 2010 FIFA World Cup, local and international attention honed in on SA soccer. Soccer development and legacy projects became the buzz-words and during June-July the country nearly came to a standstill as people parked themselves in front of TV’s to watch games, or made their way to stadiums. Experts and novices watched, talked and enjoyed soccer. What will the legacy of this World Cup interest be for retailers selling soccer products — especially boots? BEVAN FRANK asked some leading soccer retailers
FIFA World Cup:
A legacy for boot sales?
fter years of preparation and exciting build-up, the FIFA 2010 Soccer World Cup finally graced South Africa’s shores. But while the tourism sector has made tremendous gains thanks to the World Cup, most retailers did not. But what about the retailers directly involved in the soccer market, by for example selling soccer boots? Did all the attention and hype around soccer at least have a positive impact on the actual sale of boots? While the bright spotlight on soccer the past four years has grown the soccer market, and hence boot and apparel sales, the World Cup itself had no major impact on the number of soccer boots sold, Imtiaz Karodia of Solly M Sports in Durban summarises the experience of most soccer retailers Sports Trader contacted. Sales figures from the stores tracked by GfK Marketing Services*, however show that retailers could well reap future benefits. While soccer boot sales during the first six months had been disappointing (between 1% and 9% down from the same period the year before), postWorld Cup sales are picking up. This year in
Sports Trader :: 2010 August/September
“Consumers will purchase their favourite brand because they are brand loyal, But if the price is too high, some customers might not perceive it as getting value for money.”
July (11% growth) and in August (26% growth) significantly more pairs of soccer boots were sold than in July and August 2009. Despite the average selling price of the top boot brands — adidas, Nike and to a lesser extent Puma — dropping dramatically during this year (see p28) the Rand value of soccer boot sales were 5% (July 2010) and 25% (August) higher than in the corresponding months in 2009. If this trend continues, the World Cup would indeed have left a good legacy for soccer reTo p48 tailers!
Stars like Didier Drogba and Cristiano Ronaldo sell boots, despite not shining at the World Cup. Top: The 2010 FIFA World Cup created a demand for colourful boots.
Industry :: p49
World Cup boot legacy? cont from p49 Coloured boots The marketing campaigns by some boot brands during this period contributed to an increase in sales for those specific brands, says Mervin Naidoo of Poobie Naidoo’s Sports, who cites Nike as an example with regard to the marketing campaign behind their coloured boots. There is definitely a bigger demand for the bright coloured boots as seen on many of the players during the World Cup period, agrees Lambros Koutsoudis of Footballer & Sport in Port Elizabeth. “The biggest interest was in the orange Nike boots that the players wore, but only the knockdown version was available in our stores, so no major sales were generated,” says Dirk Klopper of Kloppers in Bloemfontein.
Impact of World Cup Heroes Every World Cup has its own stars of the tournament, and the one hosted in SA was no exception. New stars who rose to the fore include the likes of Germany’s Thomas Muller (adidas), who was judged to be the Golden Boot Player/Best Young Player, Uruguay’s Diego Forlan (adidas), the Golden Ball winner, Spain’s David Villa (adidas), who received the Golden Boot and Golden Ball runner-up and the Netherlands’ Wesley Sneijder (Nike) who also received the Golden Boot and Golden Ball runner-up. The question arises as to whether local soccer boot buyers now want to purchase the boots of these stars? “Generally soccer boot buyers like to buy what the top players are wearing,” says a spokesperson from the Rashid Cassim Megastore, who also found that the colours of players’ boots affected sales. “There definitely has been an increased awareness and also some demand for boot replicas worn by the superstars,” agrees Mike Augoustides of Mike’s Sports in Cape Town, adding that it is still difficult to judge as their main boot selling period is usually from February to June. Local soccer boot buyers are now more aware of the international players who were the World Cup stars, maintains Koutsoudis. Naidoo agrees. “The World Cup has made a huge impact on the youth and a lot of youngsters now speak among themselves about these stars, and want boots worn by their favourite footballers.” But, the boot buying patterns among real soccer lovers were not really influenced by the World Cup stars, maintains Keith McLaren of Planet Sport in Kimberley. These customers still want the boots of the pre- and post-World Cup stars as well. Various players who did not perform well in the World Cup remain popular as a result of their much-watched soccer commitments in
the Champions League, Premiere League, etc. These include the likes of FIFA’s 2009 Player of the Year Lionel Messi (adidas), Real Madrid’s Kaka (adidas) and Cristiano Ronaldo (Nike), Manchester United’s Wayne Rooney (Nike), Liverpool’s Steven Gerrard (adidas), Inter’s Samuel Eto’o (Puma) and South Africa’s very own Steven Pienaar (adidas). “The boots of customers’ favourite players like Ronaldo and Messi are still high in demand,” says Karodia. “These players still have their fans and they cannot be labelled bad players all of a sudden,” adds Koutsoudis. “There will always be a demand for the boots that they use.” Augoustides agrees. “Even the guys who did not perform in the World Cup still have die hard fanatical fans!” If one is world-class, one is world-class! “The youth come into the store wanting boots that their favourite stars are wearing because they aspire to be like them and by wearing their favourite football stars’ boots it brings them one step closer to attaining their dreams,” Naidoo explains.
Affordability But, can the average SA soccer player afford these boots worn by the stars? Apart from the original top end boots as worn by the players, there are also cheaper replicas of these boots available. “These takedown versions of the expensive boots tend to sell well,” Koutsoudis found. Naidoo agrees. “So even though the boots that the football stars wear are expensive, there are still cheaper versions of the boots available at a cheaper price so that customers that cannot afford the most expensive boot
can still wear a replica of their footballs stars boots.” Brand loyalty plays a role in the customer’s decision as to which soccer boots to buy — up to a point. “Consumers will purchase their favourite brand because they are brand loyal,” says Naidoo. “But if the price is too high, some customers might not perceive it as getting value for money.” “If the price is too excessive in one brand, then customers tend to look at other brands that might offer a better price,” says Koutsoudis. “Most of the top brands have sponsored stars and there is competition to remain competitive, as well as to try and outdo the opposition.” Many customers are also loyal to the brands of their favourite teams, for example an Orlando Pirates supporter will generally buy an adidas boot, believes Karodia. Although in volume, their own entry-level Fury boot still outsells the top brands, he adds.
Future sales The big question is now how long the bigger interest in soccer will last — and most importantly, if it will continue to generate increased sales. “The World Cup was an awesome event and we will see a big growth in players and supporters, especially in the schoolboy sector of soccer,” believes Augoustides. “I am sure that future demand for new boots will be enhanced due to the consumer having been made more aware because of the World Cup,” adds Koutsoudis. * GfK Marketing Services tracks SA retail sales of sportshoes at no cost to retailers. See www.gfk.co.za.
2010 August/September :: Sports Trader
Sport p50 :: Industry
Do iconic tennis stars
sell tennis rackets?
o sponsor one of the world’s top tennis players can cost millions of dollars. The expectation is that the player will then help to recoup this investment by helping to sell rackets. Is this a realistic expectation? Do high profile racket sponsorships sell rackets and create more recognition for the brand? The brands, the players and their agents will say yes, without a doubt. Sports Trader decided to test this theory. We worked from the premise that if no one knows that a specific brand is sponsoring a player, the sponsorship might as well not even exist. Recognition of the racket that the player uses must therefore be high. We also believe that consumers need to like a particular tennis star if they will be influenced to buy a specific brand. Popularity of the player must therefore be high. We then compared the recognition and popularity of the players with the brands the respondents play with, to test if Recognition + Popularity = Sales. Sometimes factors like the price or availability in retail stores may prevent consumers from buying a tennis racket brand they want. But, if they at least dream of owning a particular racket, the sponsorship could generate future sales. We also tested which players
Sports Trader :: 2010 August/September
built brands through aspiration. High and primary school learners are supposed to be the most brand conscious consumers, and the most avid followers of sport stars. We therefore sent a questionnaire to first team tennis players at high and primary schools across the country. Despite the teachers’ strike that disrupted so many schools, we received 228 responses from 42 schools and two tennis clubs.
Less than two-thirds, however, know that the flamboyant reigning ATP champion Rafael Nadal plays with a Babolat racket. We asked them to name the racket brand with which the top 5 ATP and WTA players play with, as we argued that dedicated tennis players would know the world’s best players. To test the impact of local players, we also asked them to name the racket brands of doubles champions Wesley Moodie (South Africa) and Cara Black (Zimbabwe). We asked them to name their favourite player, and what racket he/she plays with. They were also asked which racket they cur-
rently play with — and the racket they would ultimately like to play with, if money was no option. The top 5 ATP players at the time of the survey were Rafael Nadal, Roger Federer, Novak Djokovic, Andy Murray and Robin Soderling. The top 5 WTA players were Serena Williams, Jelena Jankovic, Venus Williams, Caroline Wozniacki and Samantha Stosur. Since then Samantha Stosur moved down to sixth place and Kim Clijsters moved up to third.
Recognition Roger Federer and the Williams sisters had the highest recognition, with a high percentage of respondents being aware of the tennis brand they play with (all Wilson). Less than two-thirds, however, know that the flamboyant reigning ATP champion Rafael Nadal plays with a Babolat racket. Even though one might think that young players would watch the players with local ties — especially as they often feature in doubles finals of Grand Slam tournaments — Wesley Moodie (Head) and Cara Black (Babolat) generated the least recognition for their sponsors, with 12% and 7.5% of the respondents knowing which brands they play with. Some players clearly made a study of the players and their rackets — naming the exact models they play with.
Sport :: :: p51 p51 Industry
Maybe — maybe not, was the verdict of the respondents to a Sports Trader survey of first tennis team players at school*. It is possible that aspirations are inspired by the world’s top players but this does not always translate into recognition or even sales. NELLE DU TOIT reports on the interesting results of our survey
Know what brand play: Roger Federer 83% Venus Williams 70% Serena Williams 68% Rafael Nadal 57% Novak Djokovic 40% Andy Murray 38% Robin Soderling 35% Jelena Jankovic 32% Caroline Wozniak 22% Samantha Stosur 20% Wesley Moodie 12% Cara Black 7.50%
(Wilson) (Wilson) (Wilson) (Babolat) (Head) (Head) (Head) (Prince) (Babolat) (Babolat) (Head) Babolat
Popularity Roger Federer (43%) and Rafael Nadal (35%) are clearly the favourite tennis stars as they were the only players who were named as the favourite by more than 10% of the respondents. The young players named 36 different players as their favourites — but apart from Serena Williams (named by 7%), none of the others have a significant following amongst our respondents. Favourite player Roger Federer 43% (Wilson) Rafael Nadal 35% (Babolat) Serena Williams 7% (Wilson) Maria Sharapova 2% (Prince) Novak Djokovic 2% (Head) Andy Murray 2% (Head)
Venus Williams 2% (Wilson) Justine Henin 1% (Wilson) Andy Roddick 1% (Babolat) Robin Soderling 1% (Head) Of the respondents who named Nadal as their favourite player, only 65% of them knew that he played with Babolat — whereas 84% of players who are Federer fans knew he played with Wilson. Slightly more than half (54%) of the players who like the third most popular player, WTA #1 Serena Williams most, knew she played with Wilson. Federer is therefore not only the most popular player amongst these youngsters, they are also very aware of the tennis racket he plays with — whether he is their favourite player or not. One could therefore expect that Federer would sell rackets. His rival, Nadal, on the other hand, generates much less racket brand recognition for his sponsor, Babolat — even amongst those who say he is their favourite player. The Williams sisters deliver high brand recognition (about 70%), but not necessarily among their fans — nearly 50% of the players who say Serena is their favourite player don’t know what racket brand she plays with.
Recognition + Popularity = Sales? So, based on the above information: do tennis stars sell rackets?
The largest number of these top school players play with Wilson rackets (26%). This is Federer’s racket. He scores the highest on recognition and popularity, and one can therefore assume that he sells rackets. “In 2004 when Roger Federer started to win everything, we saw an increase of 700% in 6.1 Pro racket sales,” says Brad Summers of Wilson. “I think (the success of a sponsorship) depends on the consistency of sponsoring top players — as Wilson have done over the years,” says Summers. A longer history of player sponsorship ingrains the awareness into a young player’s mind. Prince is the racket brand owned by the second highest number of players (20%). Jelena Jankovic and Maria Sharapova are the two high profile players linked to the brand, but Jankovic only generates 32% brand recognition, and Sharapova is the favourite player of only 2% respondents. But, although Sharapova, currently ranked #16, was not included in the list of top #5 WTA players, respondents noted that her name was missing and asked why she was not included in the list. “Maria Sharapova, the popular former winner of Wimbledon, the Australian Open and the US Open, has for long been the face of Prince rackets, who helped drive sales,” says Roberto Vaglietti of Prince. Yet, it is not pos-
2010 August/September :: Sports Trader
Sport p52 :: Industry Prince rackets were very much in evidence at this year’s Wimbledon tournament. Vera Zvonareva, who plays with the Prince EXO 3 Black 100 racket, reached her first Grand Slam final this year, after which she jumped to #9 in the world. She also reached the finals of the Ladies Doubles event. John Isner made headlines all over the world when he battled Nicolas Mahut in the longest tennis match in history. He won the 3-day match 70-68 in the fifth set and is now ranked #18 in the world. Prince team players Mike and Bob Bryan are on the verge of becoming the team with the all-time most doubles wins. Looking to capture their 62nd ATP title, they reached the Wimbledon quarter finals this year.
sible to say with conviction that these players sell Prince rackets. Head is owned by the third highest number of respondents (15%). Recognition for the three Head players among the top #5 ATP players is not very high — Novak Djokovic 40%; Andy Murray 38%; and Robin Soderling 35% — and their popularity ratings are fairly low — 2% and 1%. This is followed by the 13% respondents who play with Dunlop rackets. Some of the world’s top players, like Nikolay Davydenko, Nicolas Almagro and Fernando Verdascvo, are sponsored by Dunlop. But none of respondents named them as a favourite. Although sponsorship of top players cannot account for Dunlop’s sales other initiatives, like the Dunlop D squad that promotes and develops young tennis players, could account for a more sustainable brand in the eye of consumers. Tecnifibre is the brand that the fifth most respondents bought (8.5%). Again, top player recognition and popularity cannot account for sales of this brand. Babolat and Pro Kennex are owned by the sixth highest number of respondents — namely 6% of them. With high profile players like #1 Rafael Nadal, Andy Roddick, Caroline Wozniaki and Amanda Stosur promoting the brand, one would not expect Babolat sales to first team tennis players to be on par with Pro Kennex — a brand sold mainly through a discount chain. The recognition and popularity of these top players therefore do not translate into a comparable percentage of Babolat racket sales in SA.
Aspirations But, what do the young players aspire to play with if money was no object? Most of the players (41%) said they would like to play with a Wilson racket. A high 65% of the players currently playing with Wilson also say this is their aspirational racket brand. This is followed by 24% who want to play with Babolat. The low number of players owning Babolat (6%) vs the much higher number aspiring to play with the brand, shows a sales potential that is clearly not being tapped into in the SA market. Only 14% of the players who aspire to own the brand actually play with it. Head is the brand that 11% of the players aspire to play with — and 48% of those that aspire to play with the brand, already do. Prince, the ultimate brand for 10% of the players, commands strong loyalty as 52% of the aspirants already play with the brand.
Sports Trader :: 2010 August/September
The respondents who aspire to play with Dunlop, Maxed, Pro Kennex and Rox Pro and all currently play with these rackets. The fact that a Western Cape respondent said that if he could have his pick over any racket in the world, he would remain playing with his Rox Pro racket, indicates that Rox Pro’s promotion of junior tennis in the Western Cape and the Boland has been successful.
A good marketing strategy that undoubtedly links a brand with a player is the only way a player will sell rackets for that brand. Why players choose a brand From the above one thing is clear: there is no clear-cut answer. Different players have different reasons for aspiring to own a racket, or buying one. It was obvious from the high number of learners in some schools playing with the same brand of racket — especially in primary schools — that coaches or other members of their squad had an influence on the racket brand they bought. According to Oliver Ciganek of Tecnifibre a coach is extremely influential when school-level players choose a racket. Others admit to player influence. One player noted that even though she does not play with a Yonex racket, her favourite tennis player, Maria Kirilenko, plays with Yonex and therefor Yonex would be her ultimate racket brand of choice if no logistics stood in her way. Others believe that a specific racket could provide a player with the upper-hand, whether they are a fan or not. Some aspire to own Federer’s racket even though Federer was not
named as their favourite player. Having won 16 Grand Slam titles, 4 ATP World Tour Finals titles in 5 years, reached 27 ATP World Tour 1000 finals and was the first man to be ranked world no.1 for 4 consecutive years (20042008), it is easy to see why young tennis players could believe that he has some sort of an advantage playing with his racket. Yet, despite the fact that Rafael Nadal is currently sweeping all opposition out of his way in a quest to remain at the top — and is a media favourite to boot — his sponsorship is not selling rackets in SA. Could this be attributed to the fact that Babolat is available in so few SA retail stores? Playing ability is not so much of a factor when it comes to recognition of player’s racket brand, nor is local affiliation (although his maternal tie could be a factor in Roger Federer’s popularity). When we asked respondents to name the racket used by Wesley Moodie, SA’s top ranked doubles player, more respondents thought he played with Wilson or Prince than the Head racket he actually plays with. The same happened with Cara Black, a top ranked female Zimbabwean doubles player. More respondents guessed that she plays with Wilson or Prince than the Babolat racket she actually plays with. This was a month after these players faced each other in the mixed doubles final at Wimbledon. The lack of sponsorship awareness is not just a pattern reserved for doubles players, two of the world’s top singles players had sponsorships that were not recognised by many players either. Only 22% respondents knew that WTA #2 Caroline Wozniacki plays with Babolat, and 20% know that WTA #6 Amanda Stosur play with Babolat. A good marketing strategy that undoubtedly links a brand with a player is the only way a player will sell rackets for that brand. Availability of the brand in retail stores has time and again proved to be an important part in accumulating sales as many purchasing decisions are made in store (where a number of optional rackets are on display). What the survey did reveal, however, is that young school-going first team tennis players had different motivations for wanting to own a specific racket — some were swayed by their coaches, others by the brands’ involvement in developing local players, some remained loyal to the brand they currently play with and many were swayed by sponsorships of top international stars.
*First team players from 42 high and primary schools and 2 tennis clubs from all over the country responded — overall 228 learners. A considerable number, considering that the survey was conducted right in the middle of the teacher’s strike and the tennis season for school children had not yet began. As an incentive to encourage learners to complete the questionnaire, several tennis brands offered rackets as prizes in a lucky draw: • Head Microgel Extreme Team racket. Head rackets are used by 3 of the top 5 players in the world. • Prince EXO 3 Black as used on tour by Maria Sharapova. • Rox Pro XF 5.2 100% power graphite racket. As with all Rox-Pro rackets all these great features are included at an affordable price making Rox Pro a must have. • Wilson BLX Pro Tour racket as used on tour by Juan Martin Del Potro.
p53 :: Sport
Industry :: p53
What the sponsors say Does it pay to sponsor top tennis stars to become ambassadors for your brand? FANIE HEYNS asked some local tennis brand managers
Maria Sharapova is driving sales of Prince’s new EXO 3 Black
Dunlop The sponsored team of Dunlop is growing locally and internationally through the D Squad programme, says Mark Ridl, head of marketing and branding of local distributor Super-Brands. Dunlop’s new Aerogel 4D range has been developed in collaboration with its current elite D Squad and the results are paying off, he adds. Current D Squad players include Nikolay Davydenko, Fernando Verdasco, Jurgen Melzer, Nicolas Almagro and Tommy Robredo. Jurgen Melzer and Tomas Berdych are using the Aerogel 4D 300, while Nicolas Almagro and Jamie Murray use the Aerogel 4D 500 Tour and Dominika Cibulkova the Aerogel 4D Super-lite.
Head Online commercials on You Tube (www. youtube.com/user/headtennis), featuring tennis stars like Novak Djokovic, ranked second in the world, and Andy Murray, ranked #4, have been very effective marketing tools, says Mia Goslett of Omni Sport, SA distributor of Head. “When Djokovic started playing with the YouTek Speed, which was very visible on TV, Head SA was inundated with sponsorship requests from players who follow him. South Africa’s top-players are using these new rackets and this filters down to the lower ranked players who aspire to follow the number one, two or three in the country. They, in turn, are the players buying the rackets,” says Goslett. She believes it is important to have brand
Many of the juniors will tell us about racket changes amongst the pros even before the international brand does visibility on the tour. There has been a great upswing in top-end racket sales over the past year in SA and internationally and she attributes it to Head’s presence on the ATP Tour. Currently three out of the top-five men in the world are playing with Head rackets. Djokovic plays with the YouTek Speed, Murray with the YouTek Radical, Robin Soderling (#5 in the world) uses the YouTek Radical, as does #13, Marin Cilic. In addition, Mikhail Youzny (#14) and Ivan Ljubicic (#16) use the YouTek Extreme. Closer to home, SA’s #1 ranked player, Kevin Anderson, also plays with Head.
Prince Apart form Maria Sharapova who has undoubtedly helped drive Prince sales, other current tennis stars that create interest in the brand are the Spanish clay-court specialist David Ferrer as well as Juan-Carlos Ferrero, former winner of the French Open. The Bryan twins, Bob and Mike, who have won 66 titles on the ATP-tour, also endorse Prince-rackets.
Dunlop tennis ambassador Nicolas Almagro secured the seventh title of his career, and second title in two weeks, by winning the Allianz Suisse Open on the 1st of August. Almagro played 17 aces in two sets when he beat the seventh seeded Richard Gasquet 7-5, 6-1 while playing with his Dunlop Aerogel 4D 500 Tour tennis racket.
Sports Trader :: 2010 August/September
Because Rox Pro has a smaller marketing budget and does not concentrate on signing expensive tennis stars, they are able to ensure affordable rackets of excellence, says Patrick Franck, marketing manager of local distributor WET Sports Importers. They have allied themselves with junior tennis in the Boland and Western Cape where development of the tennis stars of tomorrow is strong. This is in line with international marketing strategies aimed at promoting junior tennis.
Rox Pro International, for example, sponsors a tennis academy in America.
Wilson “We have records of every racket we have sold over the last 10 years and I can tell you that top players drive sales enormously, says Brad Summers of local Wilson distributor The Golf Racket. “When Roger Federer started to win everything, we saw an increase of 700% in 6.1 Pro racket sales,” says Brad Summers of Wilson. The same can be said when Jo-Wilfried Tsonga started using our Blade racket, the immediate months saw an increase of over 320% in sales. I have countless more examples to back this up. “Many of the juniors will tell us about racket changes amongst the pros even before Wilson does — that is how in tune they are with top pros,” says Summers. “I would estimate that at least 70% of our sales in top end player rackets are driven by juniors — tournament players and school kids. They not only know which rackets they use, but also what strings, bags etc they are using.” Over the years Wilson’s sales have benefitted from the presence of three superstars and salesmen who have endorsed their products. These superstars are Pete Sampras, winner of fourteen Grand Slam-titles, Serena Williams, winner of thirteen major-titles in singles, and Federer, record holder in men’s tennis with sixteen singles titles. He is considered by some critics as arguably the greatest ever male tennis-player. Federer signed a lifetime deal with Wilson, but the trust in Wilson evolved over a long time, thanks to messrs Jack Kramer, Jimmy Connors, John McEnroe, Stefan Edberg, Sampras and now Federer, says Brett Summers. The Williams-sisters followed in the footsteps of Billie Jean, Chris Evert and Steffi Graf. “One player won’t assure everything; you need a large tour presence,” he believes. “The fact that the product is endorsed by so many top players contributes massively to sales.”
2010 August/September :: Sports Trader
p60 :: Industry
A lifeline for independents?
Worldwide independent sport and outdoor retailers have clubbed together to form buying groups that give them muscle when negotiating with suppliers and provide a forum to discuss mutual concerns. How do buying groups work and what are the benefits? TRUDI DU TOIT explains. Photo’s NICOL DU TOIT
ndependent retailing is not for sissies. Apart from customers zipping their purses as the economic downturn divert their spending away from leisure towards essentials; the playing fields within the industry are becoming more uneven. While chains that can negotiate excellent discounts from brands like Nike and adidas are spreading to all corners of the country, these brands are closing the accounts of independent retailers with orders below a certain minimum (R100 000 has been mentioned), forcing the independents to buy through wholesalers. The agent calling on a retailer to present new ranges, talk about trends and swop news, is fast becoming a protected species. Instead of touching, feeling and hand-testing new product, smaller traders have to choose stock from internet websites. With all these challenges, independent retailing is indeed a career choice for the brave… and the fact that the number of SA independent traders keep on growing (see charts p64), bears testimony to an indomitable spirit in the industry. But, there has been some talk about independents getting together and forming a united front to improve their buying strength. An anonymous email, punting the possibility of forming a buying group for independent retailers, was sent to several traders just about the time when Sports Trader began working on an
Sports Trader :: 2010 August/September
article exploring the pros and cons of buying groups.
What is a buying group A buying group consists of large numbers of like-minded retail store owners who join an organisation that represents them as one account when dealing with brands and manufacturers. The members retain their independence, but enjoy many of the same benefits as the larger chains when sourcing. The group’s administrative staff pays the suppliers and then seek reimbursement from the members. The brands get the benefit of operating one big account, instead of 50 or 100 smaller ones, and also have the assurance that they will be paid without too much hassle. “Operating one account is a major benefit for suppliers who credit insure,” explains Jonny Aarons of the ISER (Independent Specialist Electronic Retailers) Expert buying group, based in Johannesburg (see p62). The buying group members benefit because their combined buying power gives them access to brands and products at competitive prices that they might not have been able to stock as individuals. Some buying groups negotiate exclusive ranges and rebates for their members, and some of them have trade shows where buying group members get together to view new brand launches. The individual traders also get one united voice to negotiate with brands — which can
Kloppers is part of the ISER Expert buying group.
act as a lobbying group. According to Aarons one of the biggest benefits of a belonging to a buying group is the opportunity to share information. In the electronics industry they created several forums for members to get together to share information on topics like fraud prevention, how to deal with commissions, expenses, point of sale, etc. “You can learn lot by getting together to learn and share experiences, it creates camaraderie.” Apart from the enhanced buying power, there is the added brand power generated by joint advertising and marketing campaigns, adds Grant Ponting, joint owner of Trappers Franchising (see opposite). Although the funding models might differ — some would work on membership fees, others on a share of the rebates, others would be non-profit organisations where the members pay staff fixed salaries — all buying groups are administered by a core group of staff members that liaise between the members and brands, do credit checks, invoice members and process payments, etc. They usually report to a board elected by buying group members. Some buying groups would buy core ranges on behalf of members, while other groups will leave individual orders to members. Buying groups also provide the opportunity to its members to import their own branded goods together, where on their own, the member would not have enough volume to interest
Industry :: p61 Mark Ponting (centre), here with Aisha Joseph and Vaughan Frankiwitz of Trappers Fourways, offers independents greater buying power through the franchise.
the overseas supplier, says Aarons.
Differ from franchises
While franchisees would require their members to adopt their name, signage and have a similar look when presenting merchandise, buying group members are usually allowed much more individual freedom. Some buying
Independent retailers usually value their independence and it might not always be easy to get everybody to “speak with one voice”. A group with 120 members might have 120 ideas about how the organisation should be run. Members also need to be credit-vetted carefully to ensure that other members do not carry the can for an errant member who fails to pay his accounts. “Before allowing anyone to join, you have to look at their financial standing,” says Aarons. “A buying group has to be careful before opening an account for a member — even if they don’t pay us, we still have to pay the supplier.” Buying group members will also want to ensure that members don’t poach customers from each other when all gain access to wider product ranges, which might formerly only have been available to specialist stores. Brands might also be wary of supplying a diverse buying group with product models aimed at stores with a specific customer profile. “It is not so easy to form a buying group, as there is a lot of trust required between the independent retailers and their suppliers,” cautions Aarons. “It is a long process, during which people need to learn to trust each other.” Another difficulty in setting up a buying group is the funding required, Aarons adds.
Apart from the enhanced buying power, there is the added brand power generated by joint advertising and marketing campaigns groups might require their members to adopt the group name and have uniform, easily recognisable, signage, that identify them as part of the group, others allow individual members much more freedom, with just a logo identifying them as group members. “Franchising is a business relationship where the franchisor licenses the franchisees and gives them the right to market the franchisor’s products and services, use its intellectual property and use proven methods of doing business, for a fixed period of time,” explains Grant Ponting of Trappers, a franchise group that has been operating in the SA outdoor industry for the past twenty years. While you know exactly what will be on the menu when you walk into a franchise like the Spur, the members of a sport buying group will
be diverse. One may, for example, specialise in sport footwear and clothing, another in soccer, while yet another could be a general sport or outdoor retailer. Buying group stores are not required to offer the same merchandise and have a lot of freedom when sourcing products, for example from suppliers that did not sign agreements with the group. Franchise holders and successful independent members of a buying group will, however, share similar characteristics. Ponting characterizes a franchisee as “an independent, entrepreneurial-minded individual who wishes to own and run his or her own business.” But, while a franchisee must be prepared to uphold the values of the brand and only need to put up 80% of development costs of a store, a member of a buying group will take sole responsibility for funding his store, which will remain his own “brand”.
Trappers Trappers Franchising is owned by Mark and Grant Ponting who, along with a small management team based at their head office in Johannesburg, run the franchise system. The first Trappers store was opened in the early 1980’s in Pietermaritzburg, and after it grew into several stores, the Pontings bought the group in 2002. Their current group of 25 franchise stores has grown conservatively “ensuring that each potential franchise
2010 August/September :: Sports Trader
p62 :: Industry
Buying groups from p61
owner is well equipped to take on the demands of owning and running an outlet in the outdoor industry. “Trappers acts as a buying group for its franchise members, but does not yet provide any services to non-franchised stores in our industry,” says Ponting. “We provide a buying group/franchise system whereby independent retailers can benefit from bulk discount and buying structures, along with the other services already mentioned.” They are also looking at opportunities on expanding the buying group power primarily through a wider franchise network but also with partners who already have existing buying group presence in the market. “Trappers’ ability to leverage buying power has resulted in competitive prices and superior service from suppliers. The advantages of bulk purchasing ensure the availability and delivery of product to our franchisees, whilst enhancing the cost-effectiveness of the product. Because our franchisees utilize the central buying department at our head office, each franchisee benefits from group discount structures, negotiated with various suppliers.” In addition, Trappers stores also benefit from private label products designed in-house and distributed via a partner company, John
What do you think? Let us know: • Would you be interested in joining a sport or outdoor buying group in SA? Yes/No • Would you attend a conference where this, and other issues of importance to independent traders, will be discussed? Yes/No Email Trudi du Toit at trudi@sportstrader. co.za or Fax: 021 461 2549 and let us know what you think. Black’s Outland Distributors. “These products are sourced locally and internationally and provide Trappers franchisees with exclusive merchandise at competitive or superior price points to manufacturer brands and own brands of competitors,” says Ponting. Their franchisees all contribute towards a national marketing fund that is used for national advertising campaigns, in-store promotions, maximizing public relations, sponsorships and other ways of drawing feet to the stores. The owners and management team also assist the franchisees in various other ways — from preparing business plans, starting, planning and operating their stores, to product and staff training. Contact Mark or Grant Ponting of Trappers Franchising on Tel: 011 462-2919, Fax: 011
462-2835, Email: firstname.lastname@example.org or visit www.trappers.co.za.
Iser Expert stores The Expert buying group for Independent Specialist Electronics Retailers (ISER) was formed about ten years ago when 5-6 of the biggest electronics independents in SA pooled their resources. They now represent about 250 stores countrywide. They would be interested in helping the sport independent stores to get a buying group together, says Aarons. “We have all the experience and systems to run a buying group in place and would be interested in branching out into the sports industry.” They are already involved in sport through sponsorship of the Diamond Eagles and the Vodacom Free State Cheetahs and some of their dealers, like Kloppers, already carry sporting goods. The group has access to a broad range of product groups from different brands and suppliers, from which their members would then order what they need. Some of the members would, for example, only buy white appliances, some only photographic, others only furniture. “This is a model that would be easy to roll out in sport,” says Aarons. Members, who co-brand their stores Expert, benefit from national print and TV adverts, exposure through a website and brand recognition when consumers recognize the Expert store co-branding. Although only To p64
Private Label Equipment
essential outdoor gear
p64 :: Industry
Buying groups from p62
selected stores, which meet certain criteria, use the Expert store co-branding, while the others that don’t co-brand only make use of the sourcing benefits. Iser doesn’t charge a membership fee, the salaries of the staff and managers are funded through a percentage of the rebates obtained from suppliers. Contact ISER Expert on Tel: 086 039 7378 or Fax: 011 853 2804 or Email: email@example.com or visit www.expertstores.co.za.
International buying groups Worldwide, there are several buying groups for the sport, outdoor and lifestyle industries. The largest international groups are SPORT 2000 International (3 800 stores in 25 countries) and Intersport International (representing 5 200 retailers in 38 countries), which operate across country borders in Europe. Some Asian countries have started to join Intersport. Only existing buying groups can join these international groups. These groups are so strong that their turnover outperforms even the biggest retail chains per country or region. For example, SPORT 2000 International’s annual turnover is more than €5.1bn. Most countries nowadays have sport buying groups — in the UK the STAG buying group for sport and the Freedom Group for outdoor traders are part of one larger organisation, while in Australia there is the Independent Sports/ Team Sports Buying Group and Euretco in the Netherlands — to name a few. SPORT 2000 International has the objective of creating a truly global franchise system with groups from many countries working together to try and get a wide assortment of stores to trade, sell, etc. more homogeneously, explains MD Wolfgang Schnellbügel, who was recently elected Chairman of the CISO committee (the committee communicating with the international sport federations — IOC, FIFA, etc. — of the World Federation of Sporting Goods Industry (WFSGI). They are not actively recruiting members from other countries, but would consider any requests from buying groups that meet their requirements (e.g. with no less than €50-100m turnover) — except he foresees adjustments to be made concerning seasonal sourcing should countries from the Southern hemisphere want to join. But, if an established buying group that meet their criteria from SA, for example, want to join SPORT 2000, they will provide assistance. One of the main strengths of SPORT 2000 is that brands develop exclusive international ranges for them at very good price points due to the high SKU numbers. “Every store can order what they want — they know their own markets and customers best — but the international range offers them higher margins,” says Schnellbügel. “This financial incentive ensures
Sports Trader :: 2010 August/September
5 Chains 5-20 stores
4 Chains 5-20 stores 1 Franchise 100+ stores
1 Chain 100+ stores
1 Chain 50-100 stores 2 Chains + franchise 20-50 stores
670 Owners 1-5 stores
10 Chains 5-20 stores
223 Owners 1-5 stores
2 Chains 5-20 stores
2 Chains of 50-100 stores 6 Chains of 20-50 stores 2 Chains of 200+ stores
1 Chain 50-100 stores 3 Chains 20-50 stores
4 Chains of 100+ stores 622 Owners of 1-5 stores
338 Owners 1-5 stores
The charts above give a breakdown of the number of stores and chains in the Southern African sport, outdoor, lifestyle/leisure retail industry. The numbers of stores were obtained via questionnaires sent to buyers/owners, financial reports and the numbers of stores on chain websites. The numbers of owners of 1-5 stores are correct, but the numbers of stores they represent is an estimate based on feedback we received from owners.
that the collections in all our stores across countries are more homogenous.” They do, however, believe that retailing decision should be made with local market needs in mind and therefore leave it up to the individual members to select products. Although they do believe that the strongest products are available in their international range. A committee of experienced buyers is elected to select this core international range — this product selection process starts about a year before delivery to the stores, as they are involved right from the development of the range to the screening of the product assortment. SPORT 2000 is a non-profit organisation that maximises all benefits (like rebates from suppliers) for licensees. Their administrative costs are covered by a small membership fee and commissions from brands who do the international ranges for the group. Although they work with buying groups from 25 countries, they employ less than two dozen people. SPORT 2000 member stores must carry their branding and visibly portray the corporate identity with signage, logos, and colours in the exterior and interior — in some instances a store will be allowed to retain its own name, but the signage must be in the corporate font and colours. The STAG and Freedom groups in the UK: About 600 independent sport retailers are members of the STAG group, while about 450 outdoor retailers have joined their outdoor “arm”, the Freedom buying group. “Each member runs their business in exactly the same way as they have always done,” explains Sara Coyle, marketing manager of the STAG Buying Group. “They have total control. They buy and sell in exactly the same way, by placing orders with sales reps and agents. The goods are delivered to the members and the invoices are processed via STAG.” While STAG handles all invoicing, each sup-
plier will operate on their own terms when it comes to minimum orders and deliveries per store. “Some brands have minimum delivery terms, but they deal directly with individual members.” Buying group members receive the same rebate from brands, irrespective of how much an individual member ordered. Members are also free to buy goods from brands that the group does not have supplier agreements with. They have an annual show where all major suppliers exhibit. “We usually have a waiting list of brands wanting to attend,” says Coyle. STAG does do not have an own label product range — and never will do. “We believe that in producing an own label offering we would be in direct competition with our suppliers,” says Coyle. The Independent Sports/Team Sports Buying Group in Australia is a network of 64 predominantly sports specialty stores owned by 41 independent retailers across Australia. The buying group is owned and operated by its members, while the trading and product requirements are managed by a business manager. The daily activities — like the prompt payment of suppliers — are attended to by an administrator/group coordinator. The administrative team all have extensive experience in retailing. Various sub-committees coordinate product development and selection, as well as marketing and promotions. Board members are elected annually, from which an Executive Committee — consisting of a chairperson, a secretary and a treasurer — is appointed to manage the group’s business affairs. Read more at: www.intersport.com; www.sport2000international.com; www.stagbuyinggroup.com; and www.independentsports.com.au
Industry :: p65
How to fit a backpack
inding the right fit of backpack for your customer is as important as finding a hiking boot that fits comfortably. If you sell your customer a backpack that does not fit correctly, they will not easily forget you, or their next hike, as it might turn out to be a ride from hell. Once you’ve asked the obvious questions like what the pack will be used for, the length of the trip or hike, and how much weight he expects to carry in the pack, you’ll know what type of backpack to recommend (e.g. daypack, travel pack, hiking pack, etc.) you have to find the pack within that category that will fit most comfortably on your customer’s back. The size of a backpack is often affected by the maximum weight that a person intends carrying. Most agree that one should not exceed 20-25% of the person’s total body weight. When planning long walks, women should limit themselves to a 70L bag, while the maximum size for men should be 80L.
A cut-out-and-keep feature providing step-by-step information on fitting a backpack. Words: FANIE HEYNS. Compiled with information supplied by Matt Tibenham of Drifters Extreme Sport, Chris Mostert of Leotana Buitelewe, Richard Turkington of Trappers, Evan Torrance of Cape Union Mart and Simon Larsen of Ram Mountaineering.
Check the shoulder straps
Measure the torso You’ll need a tape measure on hand to sell backpacks. Just because your customer is a human lighthouse of 2m, does not necessarily mean that he automatically needs a tall pack — he might have a short torso, and long legs. There is often no correlation between height and the length of a person’s back, and hence the size of the pack your customer will need. Therefore, you need to measure to fit the right size pack to the right back length. • Find the 7th vertebrae, the largest bump on the back of your customer’s neck. Ask him to place his hands in his waist. The point on his lower back that is horizontal with his thumbs (the top of the hipbones) is the iliac crest. • The quickest way is to hold the backpack up to your customer’s back with the hip belt level with the hipbone or iliac crest. The top of the correct size backpack should not proceed more than 5cm past his shoulder height, or lower than 10cm below shoulder height. • A more accurate way is to measure the back length between the seventh vertebrae and the iliac crest. Then find the pack that will be suitable for your customer’s torso length, according to the manufacturer’s sizing charts. • Backpack sizes vary from one manufacturer to the other, but a general guide is that a customer with a back length of 40-47cm will qualify for a small pack, if the length of his back is between 46-52cm, a medium
customer’s hipbone is centered under the belt and the lumbar pad centered over the iliac crest and pressing firmly into his lower back. • When the hip belt is properly positioned and tightened, the ends of the pads should extend at least 3 inches past the hip crest. This is to ensure even weight distribution around the entire pelvic structure. It is not unusual to have a hip belt fit so that there is very little extra webbing between each pad and the buckle. This is okay as long as the hip belt is properly positioned and tensioned. • If your customer is planning to use his pack in the winter, make allowance for bulky clothing that will be worn under the hip belt.
should be a perfect fit, and if the measurements read between 51-57cm, recommend a large backpack. If the manufacturer classified the packs as short, tall or regular, a back length of 38-46cm will be short, 46-51cm regular and 48-56cm tall. • If you find that your customer’s torso is on the border between two sizes, go with the larger size. For example, if his torso is 46cm long, recommend the medium because you’ll have more room to make adjustments. Most good packs allow for that. • It might be a good idea to keep some stuffing on hand to place in the pack when fitting and adjusting the straps and belts for your customer. Also encourage him to walk around the store — ideally go up and down ramps and stairs — to test if the pack feels comfortable.
Fit the hip belt • Ensure that the hip belt is in the correct position: on top of the waist, where it will carry the bulk of the pack’s weight. Make sure your
• The padded sections of the shoulder straps should comfortably wrap around the crest of your customer’s shoulders and attach to the frame about 2cm below that point. No gaps should appear. • Make sure that the shoulder harness doesn’t get in the way when he swings his arms or have buckles that pinch the skin. The yoke (the place where the shoulder harness comes out of the pack) should be about 5cm below his 7th vertebrae. • The buckle on the shoulder strap should be far enough below your customer’s armpit that it won’t chafe. The straps should be far enough apart that they don’t squeeze his neck, but close enough together that they don’t slip off of his shoulders during hiking. The width is sometimes adjustable. • You need to pay special attention to the fit of shoulder straps for women. On some unisex packs, the distance between the shoulder straps may be too wide, or the straps themselves are so wide that they gouge an armpit or breast. If you find a good fit is elusive, recommend a pack designed specifically for women. • The load-lifter/top tension straps should attach to the shoulder straps at a point just above his collarbone and just below the top of his shoulders. From there, they should rise up to join with the frame at an angle of between 40 and 50 degrees. If the angle is higher than that, the pack frame is too long. Any lower and his shoulders will carry too much of the load.
Also see www.backpacking.net, www.trailspace.com, www.adventuresportsonline. com, www.trailstobuild.com, www.blackdiamondequipment.com. 2010 August/September :: Sports Trader
p66 :: Industry
Sports Trader :: 2010 August/September
The business to business trade publication for the sports, outdoor and leisure industries.