Creating a profitable retail enterprise is a challenge that is as old as commerce itself. Creating a profitable retail enterprise within a sports facility adds additional levels of complexity to the endeavor. However, sports-oriented retail can derive enormous benefits from being co-located within a sports facility – as long as the two are integrated in ways where each encourages interaction with the other.
To achieve this integration from the retail perspective, three different approaches to retail marketing should be combined to create a new model, which I call ESP-Retail: Experience, Sub-Culture and Place.
ESP-Retail Part 1: Experience
Since Apple made the concept of “experiential retail” the cornerstone of its bricks and mortar retail experience almost 17 years ago, many retailers and marketers have tried to mimic the concept. But even Apple wasn’t the first company to build experiences around retail. Outdoor equipment retailers like REI and Bass Pro Shops have used experiential retail methods for decades, and even coffee shops like Starbucks and bookstores like Barnes and Noble rely heavily on experiential retail methods. But what exactly does the experiential retail concept mean, and how does it affect sports retail in sports facilities?
The concept behind experiential retail is to give existing – and, in particular, potential – customers first-hand experience with your products. Customers may react to advertising, or to recommendations by friends. But customers are almost universally most affected by their own experience with products. If a potential customer’s first experience with a product is a good one, not only are they more likely to buy that product, but they are more likely to buy similar products or brands again in the future.
Using our example companies mentioned above, Apple provides table after table of devices where customers can simply experiment, and classes where new users can learn how to get the most out of their devices. REI provides climbing walls and employs experienced hikers, campers and rock climbers in its stores, and organizes camps and trips where customers can use equipment. Bass Pro Shops often have streams stocked with fish running through their stores where professional fishermen can demonstrate lures. Starbucks not only sells coffee and small snacks, it provides a space where people feel comfortable to sit and talk with others in their neighborhood to create communities. Barnes and Noble provides ample comfortable seating where customers can sit for hours simply browsing books. By themselves, none of these customer experiences will sell product. But they enhance customer experience with certain products, which encourages positive consumer brand association, which also encourages ongoing customer loyalty.
Experiential retail within a sports facility requires close cooperation between the retail and the facility. Does the retail store provide free or reduced-cost beginner equipment for beginner youth and adult programs within the sports facility? In return, does the sports facility provide marketing and logistics support for the retail store? Does the retail store sell team-branded uniforms and products to teams that use the sports facility? In return, does the sports facility use the retail store as its “official team supplier?” Are employees at the retail store also closely associated with the programs at the sports facility so that they not only better understand the products that they are selling, but they also better understand the needs of their customers? Can customers test products from the retail store in the sports facility before they buy?
All of these experiential retail concepts enhance the customer experience in both the retail store and the sports facility. This enhanced customer experience ultimately increases revenue and customer loyalty for both the retail store and the sports facility.
ESP-Retail Part 2: Sub-Culture
When we look at culture and sub-culture from a social perspective, we often look at culture as a “macro” concept (i.e., national culture, linguistic culture, regional culture), and sub-culture as a “micro” concept (i.e., music sub-culture, fashion sub-culture, hobby sub-culture). Sport is a sub-culture, in that personal connection to either a particular team or a particular sport is defined by modes of behavior, modes of speech and modes of dress shared in common with other members of the same sub-culture.
While many retailers ignore the sub-culture element of their products, it can be an extremely powerful motivator for consumers if approached aggressively and creatively. Brands like Nike –starting out as a line of track and field shoes – exploded out of the basketball and hip-hop sub-cultures, even though many of their current customers either never play basketball or listen to hip-hop music. Brands like Vans grew out of the California skateboard sub-culture, even though many of their customers now either never skateboarded or do not come from California. Brands like Dr. Martens – originally an inexpensive work boot for blue-collar laborers – became famous as part of the ska, punk and British rock music sub-cultures, even though many of their customers now are not blue-collar laborers nor ska, punk or British rock music fans. All these brands that have global awareness and die-hard followings became famous and highly profitable through their intimate associations with sub-cultures.
Sports retail and sports facilities already work hand-in-hand at the professional level to promote sub-culture identity. Any spectator at a professional football, basketball or ice hockey game will have plenty of opportunities to buy jerseys, t-shirts, scarves, baseball caps and dozens of other products that can help that spectator identify themselves as part of the team fan sub-culture. The essential element to consider here is that the sports facility is the gateway to the fan sub-culture, while the sports retail provides the key to pass through this gateway as a member by selling the products that identify somebody as a member of that sub-culture.
Amateur-level sports facilities and co-located sports retail can also act as the gateway and key to their own sub-cultures. A sports facility acts as a gathering place for people who are interested in a sport. A co-located sports retail location not only provides the equipment that is necessary for people to personally participate in the sub-culture surrounding that sport, but also the apparel and other paraphernalia that identify people as being a part of that sub-culture. The desire to be a part of a sub-culture – or to be identified as belonging to a sub-culture – is extremely motivating.
ESP-Retail Part 3: Place
Some of the world’s most effective retail brands are intimately associated with a specific place. Even though it is now an international chain, it is impossible to think of a department store in London without thinking of Harrods. Similarly, if you are a book lover and you visit Portland, Oregon, you must visit Powell’s Books. Any self-respecting toy lover has to visit FAO Schwarz while in New York City. These retail stores have become legendary in part because they have woven themselves inseparably into the social fabric of their cities (or their “place”). Because of this inseparability, one cannot think of the retail store without thinking of the city, and one cannot think of the city without also thinking of the retail store. In this way, every advertisement of the city becomes a de facto advertisement for the store.
In the case of each of these retail stores, their ability to establish themselves as a part of their place relies on two separate factors. First, they offer something unique, but that has national or international appeal to draw customers from beyond a typical retail range. Second, they offer products, services or experiences that can only be had in a single location. In the case of our three examples, all three are massive retail stores with vast inventory that appeals to both common and uncommon customer tastes. All three are in iconic buildings that are representative of their location. All three offer a level – and style – of service that is representative of the values and social attitudes of that place.
While immense size is a simple but effective way of establishing uniqueness, equally effective (and more space- and cost-efficient) is narrow-marketing a small number of exclusive or unusual products, services or experiences to a discerning, but still national or global, customer base. The key is that customers from outside the retail store’s immediate vicinity are willing to alter their travel plans to visit this retail store.
However, even “chain” stores with multiple outlets can tap into this sense of place to attract customers and to sell merchandise. With over 1,400 motorcycle dealerships worldwide, Harley-Davidson has successfully built a very strong sub-culture brand identity, and then personalized it to specific places through location branding. Popular collectibles among Harley-Davidson fans are t-shirts bearing the corporate logo and the name of the city where the t-shirt was purchased. While it is a restaurant chain first, and a retail store second, the Hard Rock Café has similar location-branded merchandise to encourage brand fans to alter their travel plans to visit their various locations.
Place marketing for a co-located sports facility and retail store offers both unique opportunities as well as challenges. As many sports facilities already have strong local identities through well-known local professional teams, place branding for retail is perhaps slightly more straightforward. However, this kind of place marketing becomes more challenging in markets that lack a well-known – or well-liked – professional team. In addition, many sports facilities are built to be as ruggedly utilitarian (and inexpensive) as possible – not to be retail centers – which often leads to unappealing or non-descript design. With creative attention paid to a sports facility’s retail appearance and its integration into the overall enterprise, both the sports facility and the retail store can achieve a unique and readily identifiable impression that can significantly broaden customer appeal beyond the immediate market.
Combining ESP-Retail and sports facilities offers a unique approach to making both more profitable. By bringing together experience, sub-culture and place, a retail establishment can tap into the reality that a sport’s sub-culture is based on shared physical experiences tied to a specific place.