Profile and Samples Blog of Partha Anant

World Cup 2006 Instigates Consumers Worldwide to Buy More Apparel to Retailers’ Delight

World Cup 2006 brings along immense opportunities for retailers as more and more customers pour into apparel outlets with every passing match, for which the big brands are even creating customised soccer and sportswear outlets. It is like a Yuletide boom for the retailers and manufacturers big or small, as soccer fans around the globe are on a buying spree of football related merchandise, reflecting the brands endorsed by their favourite teams and players who are playing in the world’s biggest sporting event.

The FIFA World Cup 2006 has brought a boom in sales of football oriented garment and apparel through the retail doors from all around the globe. ‘Wear what the Pros wear!’ is the selling tagline of major soccer oriented retail outlet chain like MLS (Major League Soccer) that is selling the host country’s very own adidas goods as a part of an agreement to feature adidas apparel and equipment throughout the season. The phrase is in perfect unison with the way it is being exhibited live by the consumers. The football fanatics are buying almost all apparel endorsed by their favourite players and teams. It enables fans to be part of the action, to declare their support through wearing a cap or T-shirt or buying a souvenir.

Expectations of the retailers are on a high, as the global gross turnover for the 1994 FIFA World Cup generated US$ 550 mn at retail selling prices, while the 1998 and 2002 FIFA World Cups produced a record breaking $ 1.2 bn plus. Projections made for the current World Cup season are turning positive in nature for the retailers who went through some rough times in the past few months, and serves as good news for them.

Each company is trying to make their product stand out in the world’s biggest sporting event through various promotions techniques like roping teams competing in this year’s World Cup to wear apparel and use equipment manufactured and retailed by them, thereby driving soccer fans to purchase items endorsed by their favourite teams and players resulting in increased sales. An estimated 3 million visitors from 32 countries that have qualified for the World Cup this year are in Germany and an audience of more than a billion viewers is expected to watch the 64 game tournament on TV across the world. The players are serving as models and brand ambassadors as the apparel giants are trying to capture every move of theirs in photographs and films to create advertisements in all forms of media transmitted to fans all over the world through various modes. The better the teams perform, the more screen time they get to showcase their respective products, which would further push the brands in the soccer crazy crowd.

Puma had the strongest presence on the grounds for shirt sponsorship deals and supplied to 12 out of 32 nations. But it is Nike that is leading by those numbers after the first round with Brazil, Netherlands, Portugal, Mexico and Ausralia. Twelve million people have seen Nike’s edgy internet 'Ping Pong' ad, featuring a digitally enhanced Ronaldinho of the star contenders and five time World Cup champions Brazil. The design team of Nike has made the “Swoosh” logo distinctive enough to deviate the attention of customers from rival adidas’ “three stripes” that are the official sposors of World Cup alongwith the host country being its home ground.

Football mania has spirited the world with its kicks and a similar spirit is being reflected in the buying behaviour of consumers at retail outlets. The sports goods dealers have constantly been running short of stocks for the last one-month as apparel of football teams and players are quickly exhausted from counters. In the previous World Cup 40 % of the licensing revenue was generated by textiles which was over $ 1.2 bn. Lotto Sport Italia has appointed PT Mitra Adiperkasa Tbk (MAP) as its exclusive licensee to establish itself as a leading sports brand this year, while Creative Licensing Plus (CLP) has bagged South African merchandising and licensing rights for World Cup 2006. Even shops specialised in leisure clothing have introduced clothing printed with flags of countries participating in this game. The lifestyle apparel chain Steve & Barry’s has left the retail world awestruck by getting into a licensing agreement with Federation Internationale de Football Association (FIFA), for soccer’s biggest event. Steve & Barry's has produced a variety of 2006 FIFA World Cup licensed T-shirts for men, women and children, to be sold at participating locations nationwide, while supplies last.

FIFA World Cup 2006 scarves and jerseys are among the major sellouts in Europe, with 44 million fans owning either of these. The biggest price hacks came in discounted sales of children’s sportswear. This is of concern for major brands manufacturers, as they saw the decline in sales of their branded items by Euro 65.5 mn, brought about due to price cuts. Average price of sportswear at discount chain Sports World is just Euro 14.4 as compared to premium chains like JD Sports, who are serving products at Euro 45.14.

Much to the happiness of British retailers, England has had a decent start in the tournament and is performing well, and the big brands are now reaping the kind of sales they were looking forward to. In Britain alone, clothing and footwear sales rose strongly even though there were signs that the rate of discounting on the high street had broken up somewhat. The Centre for Economics & Business Research Ltd has forecast that an additional Euro 1.82 bn will be spent in the UK, driven by the World Cup mania. UK, France, Italy, Spain and Germany have spent Euro 6.84 bn on football club merchandise. Men have not been seen buying much in the on-going season, even with the drop in the price of sportswear and styles in clothing and the younger lot shifted trends, surprisingly giving a rise of 10 % in the sales of non-sports clothing. But the older fans are the real spenders in the segment buying football related merchandise worth Euro 142 mn.

It is now being speculated whether the last World Cup’s 24 % growth in apparel sales will be matched or surpassed in this year’s football extravaganza. Apparel manufacturers are hoping for their national teams to stay as long as possible for the fans’ spending rises with every week a team stays back in the tournament. Though the euphoria is short-lived, the business generated is sizeable.

Partha Anant

Client: Apparel Online

posted by Partha Anant @ 7:28 AM