Sports Merchandise price slashing costs the industry over £100m
NFL & UK Football merchandise price reductions account for over £50m per annum
Discounting & slashing prices is common place in retail, and seems even more prominent in sports merchandise. From a retailers perspective the objectives of slashing prices is simple…to increase sales & reduce stock!
Used occasionally, slashing prices, can work as a marketing tool. However there are consequences of reduced profit margins & also long term reduction in brand value. We wanted to calculate what the former was costing the sports merchandise industry each year*
Note: For our analysis we did not measure any impact on gross increase in sales turnover when sports retailers slash prices. We purely focused on the ‘cost’ on profit margins. To conduct a full analysis we would need more data from clubs which is not public.
Using online data for web visitors to online stores, together with assumptions on conversion and average basket value we calculated sales turnover for each store.
We then conducted a few interviews in the sports merchandise industry who shared that price reductions was reducing profit margins by 10 to 20%. This reduction in profits was then calculated for all official club/team stores for UK football teams, NBA, NFL, MLB, MLS, and NHL. The reductions were applied equally across each sport. NFL has the largest cost, due to it being the largest merchandise sport based on our methodology.
We believe the cost is high for the industry as the brands are strong. All sports merchandise stores should try to shift their sales strategies to ones which enable them to sell at full price and engage with the fan.
Have a look at some strategies we’ve observed from teams across the UK here. Alternatively, reach out to us and let’s have a chat!
As always we’d be happy to listen to your feedback and thoughts on the subject.
If you’d like to get further insight into your merchandise store, and how you can improve revenues feel free to contact us on www.discountif.com,or our email contact@discountif.com.
