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Retail Sports Industry

Retail Sports Industry

Retail Sports Stores and Business Consultants

About the Retail Sports Industry

What constitutes the retail sports industry? It refers to an industry comprising retail brands and businesses that offer to sell products used for casual, fitness, and professional sports in the retail markets. The products include apparel, footwear, wearables and specific merchandise used/required in a sport. For example, various merchandise involved in swimming include swimwear, swim caps, swimming goggles, microfiber towels, swimming earplugs, swimming kickboards, pool footwear, etc. Similarly, each sport has unique requirements. And retail stores make the required merchandise available in the market for retail customers.

How to classify retail sports stores? Retail stores (including chains) in this industry can be classified based on merchandise offered and brand ownership or association. Some retail stores exclusively deal in any one particular sport. For example, a local store dealing only in swimming merchandise. This retail store could be an independent seller brand in itself that sells swimming accessories of multiple brands. But then it could also be a single-brand retailer or franchisee where it sells products of exclusively one brand only. For example, a local franchisee of Speedo – a global brand for swimming accessories.

Another classification of retail sports stores. A more commonly found format is retail stores dealing in merchandise for multiple sports like cricket, football, swimming, etc. Here also, a retail store could be an independent seller brand that procures goods independent of any brand association. Brands like Decathlon fall in this category. Or a retail store could be associated with one or more franchisors in an exclusive (single-brand) or non-exclusive way (multi-brand).

The retail sports industry is growing at a promising rate all over the world. The demand for sporting merchandise is steadily increasing owing to many factors. Heightened awareness among the masses about maintaining routine physical activities has turned many people towards various sports as a part of their fitness regime. Millennial parents show enthusiasm towards the all-round development of their children including physical fitness. This has increased the number of young kids getting to sports like tennis, swimming, martial arts, etc. Once someone is into his/her favourite sport, even if it is for recreational purposes, it is difficult for them to abandon it.

But the industry is also marred with many existing and emerging challenges. The pandemic of 2020 had slowed down the growth of the industry for more than a year. Owing to safety measures, sporting activities came to a long halt. While things have started to head north, many old and new unaddressed challenges have resurfaced. These challenges are discussed later. The bigger issue is whether retailers are willing to change and transform their businesses in an altered business environment.

How to transform a retail sports store or business? Either the retailers will have to do this on their own or with the external assistance of experts. In whatever form they choose to plan and implement this transformation, retailers will have to upgrade their retail business operations for sustainability and expansion. As retail management consultants, YRC offers to help retail sports businesses located anywhere in the world, to bring this transformation in small and manageable ways through its retail sports business consulting services.

Challenges in the Retail Sports Goods Industry

Duplicate Products in the Unorganised and Online Markets

The retail sports market is filled with duplicate and look-alike products. Some of these products are also of such quality that they offer value for money. The look-alike products are priced less than their originals. This easily attracts many unsuspicious customers. Customers might or might not be aware of such duplicity or look-alikeness. But ultimately, such products eat into the market share of the retailers who sell authentic and genuine products. Sometimes these products also slip into online marketplace platforms that enjoy customers’ trust with an approach of “If it is sold here, it must be genuine”. It is also difficult for the manufacturing brands to keep a check on such parallel markets.

Brand Association

Customers are well-aware of the fact that big brands charge higher because of many factors of which one is for being a reputed brand. At the same time, big brands are increasingly losing the edge of premium pricing because of diminishing product innovation and the emergence of alternative and more economical brands in the retail sports goods markets. When these emerging brands offer good quality products, it no longer remains a difficult decision for customers to shift to these lesser-known and emerging brands. This has affected the franchise business model of the industry by adding more uncertainty in determining brand performance. Going exclusive with big brands is an expensive affair. Emerging brands are yet to prove their long-term mettle.

Tough Competition to Physical Retailers from Online Sellers

ECommerce has left its impact also on the retail sports business. The decades-old stability of physical retail sports stores has been stirred by online competition. The routine benefits of eCommerce like multiple brands to choose from, discounted pricing, availability of product variations, comfortable shopping experience, ease of product return, etc. are all there for the online customers of retail sports merchandise. Except for a small segment of customers who prefer buying from physical stores, which is also necessary for certain product categories, consumer behaviour is becoming increasingly tilted towards online shopping. It took ‘eCommerce’ for physical retail stores to focus more on customer experience.

Competition from Importing Brands

A football priced at INR 500 in India may cost 3-4 times more in the United States. The same could be true the other way round for some other product. This explains the lucrativeness of international trading. Retail sports brands that source their products from another country with a big cost advantage will be able to sell their merchandise in the host country not only at profits but also with price competitiveness. It becomes nearly impossible for domestic manufacturers and retailers of similar products to counter such advantages. At the end of the day, the best way to do business wins and it takes the entire industry in that direction until a better way is found.

Soaring Real Estate Prices

Whether it is a physical store or an online business, space is required to conduct business. Businesses require space for setting up stores, warehousing, distribution centres, and offices. Choosing the right locations is very important. With rising real estate prices for renting, leasing or purchasing, it is not easy to afford space in desired commercial locations. This financial burden has to be borne by businesses and eventually passed on to customers. It affects the competitiveness of businesses, especially the brick and mortar enterprises that need their stores to be located at prime locations or at least close to such areas. It has become increasingly difficult to find space, let alone find them at less-costlier rates.

High Segmentation of the Markets

Today, the retail sports merchandise market is flooded with a wide variety of options in each product category. Different users have different usage requirements. Some customers are brand-conscious while for some others, quality comes before the brand. From low to premium pricing, there is something for every segment. Even in terms of quality, the standards are way too many to the extent that it is difficult for customers to gauge and they begin to tilt towards known brands. For example, in the running shoe category, there are different types based on usage requirements. There are shoes for professional athletes (runners) and shoes for casual fitness like for use at a gym or for walking purposes. Some customers prefer a cushioned base while others seek tougher soles for longer product life. There is something interesting to be found for every need and every pocket. The same could be said for many other product categories. The segmentation can go very deep. It becomes challenging for retailers to target a niche market for then they have to go to extensive merchandising. Assuming a unique brand positioning is even more difficult for general sports merchandise stores.

Talent Acquisition and Retention

Specialised product knowledge is very important for business owners, store managers, and sales staff when they are selling sports merchandise. As we saw in the previous point, for a store that deals with running shoes, its employees must carry sound, technical knowledge of the different types of running shoes available. Even the veterans of retail consulting in the sports business know that it is difficult to find employees with domain-specific experience, especially for the positions of store managers and sales executives.

Talent retention is a generic problem for all industries and it is no different for retailers in this industry. Because there is a shortage of employees with relevant experience in sports retailing, those who are there are always highly sought after. It specifically applies to the sales team.

Lack of Expertise in Store and Business Modernisation

Many retail enterprises are aware of the need to upgrade and modernise their business starting from their business model to the operational framework. But it is a massive task. And many of them are not willing to disturb the status quo especially if the business is presently doing well. This is also accompanied by the rarely realised and acknowledged issue of the lack of experience and expertise in bringing retail transformation. Few proactive enterprises might have transformed themselves on their own. Few may have taken a few small steps in that direction. But having the guidance of an expert and experienced team makes this much-needed process easier and quicker.

Why YRC

We are 10+ years into retail and eCommerce business consulting niche. We have served over 500+ clients across 20+ verticals. As an emerging global consulting brand, we serve globally with active presence in India, South Africa, Middle East regions.

As adaptation is becoming a necessity for many traditional retail sports stores, we help our clients realign their business to the contemporary and relevant market requirements and business environment. And we do not just mean visual modernisation. Broadly, we work towards:

  •         Redefining business strategy for unique brand positioning
  •         Chalking reliable business plans
  •         Formulating effective functional strategies
  •         Planning for robust operations across departments and store locations
  •         Achieving high-performance digital marketing
  •         Efficient inventory management
  •         Optimised store/warehouse layout planning
  •         Better talent management

Another strong component of modernisation in the retail sports industry is the adoption of strategic digital transformation. Specific to individual clients, we offer assistance in formulating the business-IT strategy, identifying the digital requirements, and implementing the solutions. Here, in retail sports consulting services, we help clients determine how and what kind of digital technologies could help their business become operationally more efficient and enhance its potential for growth and expansion.

As experienced retail consultants in the sports industry, we always reiterate that going omnichannel should now be a top priority for single-channel retail sports enterprises. Our expert team of sports retail consultants help businesses adopt omnichannel in a strategic, planned and systematic manner. Whether it is a physical store intending to go online or an eCommerce player looking to establish a physical presence, we specialise in providing solutions for cross-channel expansion. We ensure that clients have a fail-safe roadmap for delivering a seamless experience to their customers with streamlined omnichannel operations.

If retail sports enterprises are to compete effectively with their online counterparts and other physical retail stores, they will also have to revamp their business models. Our business model development services are intended to achieve this goal. Here, we identify and define the UVP for our clients’ retail sports business. This also covers the formulation of channel strategy, operational roadmap, and technological requirements. Our team shall map and define the value chain and internal capabilities required to effectively and efficiently deliver the identified UVP.

Before trying to accomplish any business transformation, small or big, planning is required. For good planning, relevant informational inputs are necessary. These inputs come from internal data and external market research. It is not difficult to assimilate the internal data. But market research is required to gather external data and information. Online market research is one of our preliminary services where we carry out detailed studies and assessments of clients’ target markets. The objectives are to identify prospective segments and how clients can best serve that segment. Our reports shall include CTAs and action-recommendations.

To know more about our retail sports consultancy services for physical and online businesses, drop us a message and our team shall coordinate a call back with you at the earliest.

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We work only for Visionaries.

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.