As the World Cup approaches, retailers are busy planning their own match tactics to draw the crowds and tap the lift in consumer sentiment the tournament brings.
When the last football World Cup took place in 2006 the world was a very different place. It was a time of growth, a banking crisis was not on many people’s radars and ecommerce was beginning to really take off.
The recession-weary time we find ourselves in now is one where the much-anticipated tournament is a welcome relief from worries about the macro-economic climate.
So, with a week to go until kick- off, what are retailers doing to make sure they can make the most of the buoyant mood it is hoped the World Cup will create and how much uplift should shops be expecting when the competition starts?
The tournament represents a huge opportunity for sportswear retailers and the brands that supply them. They have high expectations for this year: Nike’s “Write the Future” ad has highlighted the fever for the competition, with the ad receiving around 9.5 million hits on YouTube in just one week.
In 2006 retailers benefited from over £1bn of extra sales through the World Cup - a figure they will be hoping to exceed, especially if England do well.
Sports retailers hope the tournament will bring them a sales bonanza, even outside England. JJB sports chief executive Keith Jones says the Brazilian strip is going down particularly well with its Scottish customers, among whom there is a growing “ABE” (anything but England) effect.
It believes it will see a sales lift of millions of pounds “in the single digits” and sees it as a good opportunity to bounce back after a tough few years for the business.
This weekend it will start selling exclusive 1966 Umbro T-shirts in stores. “We are hoping England go all the way,” says Jones.
Online sports retailer Kitbag has used the World Cup to trial bricks and mortar for the first time, with a pop-up shop opening on Manchester’s Market Street last month. It will trade for 90 days, until the end of the tournament.
Sports retailers’ high hopes are shared by big sports brands. Nike says sales for its team shirts have been “very positive” so far. A spokeswoman for the brand says: “Our main product focus for the World Cup is the Elite Series Boots and our national team playing kit and apparel. Niketown, Oxford Circus, provides us with a great opportunity to tell consumers these stories in a premium way.
“In our partner stores we have windows, free-standing units, visual merchandising, staff training and Bluetooth units for customers to download our Write the Future ad.”
It expects the Mercurial Vapor Superfly II Elite boot, which will be worn by footballers including Cristiano Ronaldo and Didier Drogba, to be a best-seller this year and says the Brazil national team kit is always popular with customers here.
Meanwhile, Adidas has launched an official World Cup ball called Jabulani and a football boot F50 adiZero with its retail partners.
Adidas UK marketing director Nick Craggs said: “We have high expectations that this will be the most successful World Cup to date for the brand. We have experienced record sales of the Jabulani and the tournament has not started yet.”
It is not just the sports retailers and brands that are using the event to boost sales, however; the supermarkets and electricals retailers are also getting ready for their share of predicted extra spend.
TV sales are expected to be huge leading up to the event - particularly in light of the possible VAT increase on the horizon, meaning purchases could be moved forward.
Mintel head of research services Mark Brechin says electricals retailers will be hoping for a “significant uplift” in sales. However, he thinks they will have more modest expectations than in 2006 in light of the current economy.
“In 2006 sales of HDTVs rocketed partly because of new technology. This time it will be more circumspect and I don’t think it will bring more consumers to the market; it will just bring sales forward,” says Brechin.
The sector is currently awash with deals and cashback offers on TVs based on England’s performance in the World Cup, with Best Buy offering money back on any TV bought at over £499 if England win in the final.
Comet expected a big spike in TV sales over the last bank holiday weekend. The retailer says it also expects to see a 50% rise in drinks chillers as people gear up for their World Cup parties.
DSGi is offering customers who buy a TV at £599 or above £10 back for every goal that England score in the World Cup. The incentive has helped push sales for higher-priced TVs since it launched over the Easter Bank holiday.
The retailer’s marketing director Niall O’Keefe said that last weekend was the biggest for the electricals sector in terms of World Cup sales, as it was the last bank holiday before the tournament. However, he believed demand would continue throughout the event.
Although he agrees that many TV sales will be brought forward from later in the year, he adds that the World Cup effect is like having “an extra Boxing Day” for the business.
O’Keefe adds that “take home” stock will be important for the customer in the coming weeks. “People don’t want to order online and wait four days for the TVs to arrive,” he says. “The amount of people who show up trying to get a 50-inch plasma TV into a Mini is shocking.”
The growth of online since the last World Cup is sure to have an impact on footfall, according to Experian Footfall senior retail analyst Anita Sharma Manan. “Times have changed, and in an internet world people will shop online and prepare ahead of matches.”
Tesco has seized the new digital age firmly, with two websites launched for the occasion: a World Cup site with everything a customer may need in the lead-up to the games and a Countdown to the Cup site featuring blogs and competitions. The grocer is also running a World Cup campaign as the “official England” supermarket - the title held by Sainsbury’s last time around.
Tesco has forecast that it will sell 300,000 TVs and 800,000 flags in the run-up to the event. Tesco retail and logistics director David Potts says: “When the first round of games kicks off our main seasonal aisle will switch from non-food to food. Convenience and a quick shopping experience is key for our customers during the World Cup so we will make sure favourites such as pizzas, beers, wine and snacks will be front of our stores and easy to find.”
The retailer expects footfall to be up 30% in the hours before the England matches and will have more staff in its stores for the busy periods.
M&S has also launched World Cup items for its food and fashion areas, as well as items for aspiring WAGs.
Grocers the champions
Brechin says it may be the grocery multiples that fare best during the competition as many families are expected to be watching the games together at home and making a real event of it with food, drinks and barbecues.
“In 2006 a lot of the multiples sold beer at a loss, about £100m worth. This can be expected again as it is that offer that gets people into the stores to then expose them to other offers,” he says.
Sharma Manan says that since the recession people have become more “family focused”, and that will bode well for the supermarkets as people favour their homes to watch the match.
She also believes that because most of England’s first-round matches are in the evening, any impact in footfall on the high street could be limited. “If we get to the quarter finals, [starting on July 2] when the weather is better and Wimbledon is on, that may have an impact on footfall,” she says.
She adds that non-football fans may take advantage of quieter shops when many people are watching matches and retailers should look at bringing in offers for those customers during the games.
How long England stay in the tournament will also be key - although Brechin says that Mintel has found 85% of people will go on watching the competition even if England are beaten. “Many people have a second team,” he says Brechin, adding that if Spain, for example, did well it could lift sales of Spanish products for grocers.
He also says people may buy more fashion items as they could be socialising more during the tournament.
Fashion retailers including Next and New Look have brought in fashion items for the tournament, and House of Fraser is running several competitions and offers across its home and fashion departments. The department store will have TVs on its menswear floors showing classic football games and is running in-store events, with speakers from the world of football talking about England’s chance to win the title that has evaded them since 1966.
Whatever happens, however, Brechin does not believe that the World Cup will make a turbulent year a great deal better. “Over the whole year it won’t make a huge difference. It won’t be a game changer,” he says.
Swings and roundabouts?
JJB Sports chairman and former DSGi boss John Clare says that after World Cups in the past there is usually a slump, so if you look at a World Cup year as a whole there is little effect.
“Sports is a bit different,” he says. “There are extra sales of shirts that would not have been bought in a non-World Cup year.”
However, in the electricals sector sales of TVs that would have taken place during the year anyway are simply brought forward, rather than extra units being bought necessarily.
There is no doubt that the feel-good factor will distract from economic woes and the fallout from spending cuts the new government will have to make to tackle the deficit.
Anything to turn around the country’s mood is likely to be a welcome relief and, if England makes it to the later stages of the competition, retailers could hear the tills as well as the fans cheering.
Catering for World Cup widows
With 28% of Brits claiming to have no interest in the World Cup, according to Mintel, there will be lots of consumers who may want to use the time when most are watching matches to do their shopping.
Debenhams will offer crèches for men so their partners can go shopping and leave them in cafes where they will show games.
Meanwhile, Tesco says that World Cup widows are preparing for their escape from football by buying smaller, secondary TVs for the kitchen or bedroom to avoid watching the matches.
Sales of small TVs have nearly doubled (49%) at Tesco in the past 12 months. Tesco senior commercial manager Matt Finch says: “This is going to be the World Cup of the flatscreen TV. So many people have them now that a lot of World Cup parties will be in the sitting room instead of the pub.
“More than ever, women will be looking for ways of escaping from flatscreen football matches so having a second telly in the kitchen or bedroom is a great way of getting away from the world cup without having to leave home.”
Marks & Spencer is also selling pampering items for women who want to indulge while their other half is at the pub, as well as travel accessories for those wanting to escape for time away with the girls.
Online film rental firm Lovefilm is offering free streaming of chick flicks during the tournament including Grease and Dirty Dancing. It is also offering wall-to-wall episodes of Sex and the City. Films are free to download on customers’ computers while their partners hog the TV to watch the matches.