industrypaulsherratt


Is it really all about the price?


Paul Sherratt of Solutions for Sport looks at the impact ecommerce has had on the price of sporting goods


price to both the customer and the end consumer. We live in such a transparent world that to find the latest price on an item is now as simple as one Google search or even a scan of a barcode. Inevitably end consumers want the best price.


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However, is this really the only criteria we use when choosing goods and can both brands and retailers be smarter in their pricing strategies and increase prices and margins? In the 1960's the marketer E. Jerome McCarthy


proposed a four Ps classification which has since been used by marketers throughout the world - Product, Price, Promotion, Place – all of which have a direct influence on the selling price of a product. Today those P's have expanded to become


seven or eight (or even more) to address the different nature of services. Their impact on business development and go-to-market strategies should not be underestimated and are equally applicable to the sports industry. So if we take price out of the equation, what


other factors should we be looking at from both brand and retailer perspectives?


Product Of course this is key. The product pipeline


must be continually full and whether sports brand or retailer, without appropriate, attractive and relevant product the business cannot evolve. Over the past ten years we have seen more


and more niche areas of the industry being driven by product development such as ecommerce, and this has allowed retailers to exploit the long tail and push more and more specialist products into a bigger specialist market place. Innovative product development continues to


be a key business driver here as the specialists (retailers and brands) demand more ‘fit for


20 SGBGOLF


n my day-to-day discussions with brand clients, sports retailers and the sales team price is oſten discussed. This is the selling


purpose’ products than those in the ‘general’ sporting


goods category. The nature of


these products – cutting edge, innovative, in-vogue – means consumers don’t expect to see products discounted and thus the retailer who immediately discounts a brand new to market line in this area is simply giving margin away. A new product launch is the time to make hay and to maximise margins. As a retailer, I believe they should take


advantage of the marketing tools that are oſten available around new launches and piggy back on the brand spend to drive consumers to your own website/store – take any point of sale or co- operative support that is available.


Promotion It is the author’s view that as an industry, the


trade can still learn from our FMCG cousins in this area. If we compare brand and retailer activity with, for example, that of the grocery trade we oſten fail to address some powerful tools that are available to the brand and retail businesses. Added value promotions, Buy One Get One


Free (BOGOF), voucher redemptions, staff incentives, gondola end promotions (or equivalent), and direct call to action initiatives are all areas that we recognise as end consumers in other marketplaces but not necessarily throughout the sports market. When used strategically these types of tools can be extremely beneficial and allow additional


points of difference versus the competition. These approaches work both online and in store and, most importantly, do not necessarily result in margin erosion.


Place Oſten you will hear marketers saying that


marketing is about putting the right product at the right price, at the right place at the right time. It’s critical then, to evaluate what the ideal locations are to convert potential clients into actual clients. From a brand perspective this might be a trade


show, shop visits or dealer trips. For sports retailers it may depend on your


route to market – shop, mail order, ecommerce, event – but the same principles apply. This marketing P is the one that on the surface


appears less relevant, but is the one that arguably is having the biggest impact on the sporting goods marketplace. Put simply the ‘places’ where goods are being purchased are changing. Channels are merging – running and outdoor;


embroidery/embellishment and sports mail order and ecommerce for example. For sports brands to evolve they must address these


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