Industry View VIEW FROM THE INDUSTRY J
Finding victory from defeat
ohn Nagle is Managing Director of Sportsrisq Capital, which provides customised financial contracts linked to sports results, with a view to enabling businesses to offset risk and grow sales. Here he explains how Sportsrisq products can be used by retailers to better manage the supply chain and drive innovative promotions
Professional sports results can impact your bottom line significantly. England’s early exit at the World Cup is a good example, as many retailers were left with warehouses full of unsold merchandise when the team lost. When key regional and national teams under-perform, demand for replica and teamwear is diminished. Likewise, when those teams are winning, it creates demand.
Supply chain management
Retail success relies on having the right product in the right place at the right time. Because major manufacturers require advance orders, buying decisions are often made without a clear idea of market demand. Sportsrisq helps mitigate results-related risk, optimise inventory levels and maximise profits with customised financial contracts that pay out based on key sports results. For example, sales of England rugby shirts next year will largely depend on how the team performs in the 6 Nations and Rugby World Cup. Good results will lead to more sales but poor results reduce demand. You can’t know how England will perform but by using Sportsrisq contracts you can make sure you have enough shirts in stock if England’s results lead to higher demand, without risking the potential losses from unsold stock if on-field results are poor.
Innovative Sales Promotions
Sportsrisq contracts can also drive promotions. You can offer customers guarantees based on sports results and then cost- effectively eliminate the liability using a Sportsrisq contract. For example, to boost sales of Chelsea replica shirts, you could offer a full refund on purchases before the end of September if Chelsea win the Premier League and FA Cup double again. The cost to your business would be equivalent to only a 9% discount but the promotion is far more appealing to fans. It’s a highly visible offer that associates your brand with Chelsea (or any successful sports team or athlete), generates significant early sales and invokes customer loyalty.
Sportsrisq enables retailers to cost-effectively reduce risk and increase profits of replica and teamwear products no matter what the score is.
www.sportsrisq.com 14 SGB SPORT JULY 2010
What has been the greatest success for your business over the past 12 months?
We cater for a vast array of sporting requirements and accessories, and popularity in brands and ranges changes from season to season. If we were to pinpoint a particular range, the County GAA replica jerseys and leisurewear has been very good since its 2009 launch.
What recent supplier initiative has been successful? We are relatively new members of STAG, having joined in January this year. With the next buying show taking place in October in Ireland we are hopeful that this will help us to make new contacts. It would be good to see more Irish members involved.
What will be the biggest challenge for your business over the next 12 months?
Some days are more challenging than others and this coming 12 months will be no different. If we can strive to continue to give good service, quality, value and customer satisfaction, we will be doing a good thing to make these challenges a bit easier.
Trading Intelligence
Shop name: The Central Sports Store Location: Kanturk, County Cork, Ireland Owner: Francis & Marie Kenneally Opened: August 2005 Affiliation: STAG Number of staff: 3 Speciality: Personal service and special requests for the sporting needs of our local and surrounding areas.
Service with a smile: Aisling (left) and Marie Kenneally of The Central Sports Store, Kanturk
Not a lot of people know this about my business, but ….
The Central Sports Store evolved five years ago from a small sports section that was growing too big within our drapery store, The Central Stores, an established family business celebrating 55 years’ trading this year.
How is business at the moment?
The improved weather this year and the schools being on summer holidays has made a difference. People are in better form when the sun is shining. There is definitely shortage of cash out there. We are in sale at the moment and customers are keen for good value for money. The resurgence of the GAA season continues to be a boost to business at this time of year also. Overall we are feeling the pinch like everyone else, but we endeavour to do our utmost to order any special requests.
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