Long term growth plans are essential for any sports retailer, but in an industry that is undergoing 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 steadily recover the retail industry is struggling to keep pace.
In March the Bank of England forecast GDP growth of 2.2% this year and yet at the same time The Office for National Statistics reported retail sales volumes had decreased by 1.3%.
Its difficult to pin point exactly why retail sales are declining but what is clear is that it has never been a more challenging marketplace. Many sports retailers in particular seem truly 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.
Its a trend that has already been seen by some retailers with High Street retailing trying to combine a leisure experience with shopping and to make the shopping experience more interactive, rewarding and efficient.
Without doubt the Apple store concept was an early adopter of such a strategy with the company more than happy to see shoppers hanging out in store but there is evidence of continued development of this strategy within our own trade.
The LDN19 concept by PRO:DIRECT embraces touch screen technology allowing consumers to immerse themselves deeper into a product or brand experience and establishing the store as a “go to” destination for the soccer 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 them to tackle the age-old bricks-and-mortar challenge of stock space.
“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”, says Kerry Lamos, chief executive of Retail Pro International. “With endless aisle technology in stores shoppers can try on shoes that are physically present in stores and then use the technology to see all of the other varieties available to them.
According to adidas, the installation of the endless aisle has led to a 40% increase in its footwear sales.
It is these kinds of interactions that are enriching the in-store experience for people.
As younger consumers gain more buying power these elements will be increasingly important allowing them to use digital and physical tools to enhance the experience.
But its not just about technology.
Creating a comfortable retail environment also adds to the consumer connection and experience.
Never is this more evident than in the retail experience at Rapha – the leading cycle brand.
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 cafe showing live cycle events on big screens is incredibly appealing to the keen cyclist.
Retailers must evolve
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.
Many 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 been at the forefront of the eCommerce onslaught with the giant that is Amazon as its nemesis.
James Daunt, managing director of Waterstones, says he has combatted Amazon by making his company’s shops more fun and the shopping experience social.
“High street retailing is a recreational rather than a practical exercise now to a significant degree” says Mr Daunt. As a demonstration of this the new 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, even on a shoestring can retailers embrace this concept?
What about in store screenings of key sporting events? A pop-up cafe on a weekend. In store yoga/fitness classes.
“What consumers are looking for are experience, excitement and theatre, and often the physical environment [as opposed to online] is a better place to do that” says Helen Dikinson of the British Retail Consortium.
It strikes me that, as a trade, we are at a distinct advantage here in that we are surrounded by that very excitement from the sporting events surrounding us.
If one is in that environment – the Rapha store, LDN19 or wherever you are – there is no doubt that one is more inclined to connect with the product and purchase accordingly.
What is clear is if sports retailers (and retailers in general) do not invest, reinvent and remain current then many will fail.
It really does appear to be a case of evolve or die.