"When strategizing for sales promotions, forget discounts and try these winning tactics"
There’s no doubt that the sporting calendar keeps consumers engaged with sports brands and the desire to take part in sporting activities, but how can sports retailers keep consumers engaged with the same discount-based promotions that are made available by almost every competitor?
The Tour de France, Rugby World Cup and Wimbledon Tennis Championship are just a few of the world class sporting events that continue to make the sports sector one of the most lucrative in the world, but sports retailers need to think about employing new promotional tactics if they are to compete for their share of revenue in this constantly growing market.
Independent global advisory firm Oxford Economics estimates that so far, the UK has reaped over $22.12bn in overall gross domestic product from hosting the 2012 Olympic Games, and cycling has seen perhaps the biggest uptake in participants in the period since the games took place.
The current average cost of a bicycle in the UK is $300 , which doesn’t get you much in terms of brand name or build quality so if sports retailers are to incentivize consumers to spend more on a better product, or simply compete with other bicycle retailers, there are two key tactics that guarantee to boost sales.
There is good reason why the exciting tactics I’m about to describe have been outperforming discount-based promotions in other sectors.
The cold hard truth is that consumers are only likely to purchase discounted equipment while it is on offer and if they should miss out on the offer through contemplating similar discount promotions from other retailers, or for any other reason, the consumer isn’t likely to purchase the product when it’s price is reverted back to the standard retail price, but will instead wait until the product is discounted again.
Obviously, retailers forced to discount the product again to further secure sales will find themselves losing out on profit margins and that’s where two tactical promotions come into play; cashback and the gift-with-purchase.
With a great track record for increasing sales in other consumer sectors, these promotions could have great potential for the sports retail sector.
The cashback promotion makes clear that if customers purchase equipment only to find the same items available cheaper elsewhere, can claim a cashback value set by the retailer.
Financially, this is far more effective for a sports retailer than simply discounting the product, as historical data shows a huge boost in sales.
The same applies to gift-with-purchase promotions, in which expensive, desirable items such as high-end noise cancelling headphones are offered as a thank-you to customers for having purchased equipment from the retailer.
If they can only be claimed after a specified period of time, only a fraction of the full number will be collected.
The alternative is to offer the gift on condition the customer makes a second purchase from the retailer for equipment over a specified value.
Again, there will be limited claims of the gift.
These promotions have genuine potential in sports retail, where competition is about quality and brand as much as it is about price.
Gift-with-purchase promotions can up the ante when the gift is a high-quality, desirable item that fits in with the customer’s lifestyle or preferences.
The same goes for an appealing cashback offer, tilting the balance in favor of the retailer when the customer is at the point of making a decision.
Such promotions are run by specialists working to quality standards, who have vast experience in managing and reducing any risks.
They also build the redemption website, handle claims and take care of customer service, causing the retailer minimal disruption.
Such is the effect of these cashback and gift-with-purchase promotions, there is also real potential to drive volume and increase sales in the sporting goods sector, where they remain under-utilized.
Using the data and the deep expertise of a sales promotion specialist, these offers are set up to be extremely attractive to consumers, boosting sales while protecting retailers from the risk of promotions.
Unlike the uncertainty of beginning at the back of the grid, this is a direct sprint to victory.
Anthony Everest, Account Director, Opia