The London 2012 Olympics are in sight and soon parts of the UK will be busy with sports-loving visitors. Rebecca Thomson reveals what retailers need to do to capitalise and score a podium finish.
It’s nearly upon us – in just a few weeks, the Olympic and Paralympic Games will begin after a seven-year build up. Some retailers have been planning for the event for nearly as long but, while most are poised to take advantage of its spoils, a few surprises are always likely.
The last few months have produced a predictable amount of scepticism about how much money the event will make retailers. Some have suggested the economy will only be perked up temporarily.
The Government’s own forecasts aren’t exactly giddy with a sense of approaching financial joy – the most recent from the Office of Budget Responsibility says: “We assume that, apart from the ticket sales effects, the Olympics will not have a material effect on the quarterly path of GDP.
“This is consistent with a number of studies which suggest that the overall economic impact is likely to be small.” And of course, any lift to consumer confidence and the national mood will now have to counter the effects of the UK entering recession for the second time in three years.
But it’s easy to come up with reasons to be gloomy. Dismal economic news notwithstanding, the Olympics and Paralympics hold big opportunities for those retailers that get things right. Between July 7 and September 9 the world’s attention will be on the UK, and it will be up to retailers to take a proactive approach – both in attracting the attention of foreign tourists, and in cultivating a celebratory mood.
National tourism agency Visit Britain says visitor numbers across the UK won’t rise massively on 2011 – there will be about 30 million across the country over the year – but the real benefit should come in the future as tourists are enticed by what they see in the media during the Games. Westfield UK general manager of marketing Myf Ryan meanwhile says 70% of the 7 to 10 million visitors expected in London will enter the Games site through Westfield Stratford.
As Richard Brown, vice-president of tourism shopping consultancy Global Blue UK, says: “While overall tourist visitor numbers are set to remain steady we are anticipating that British brands will enjoy a brilliant moment in the spotlight. The high street is set to benefit from an influx of tourists keen to purchase brands and products unique to Britain and not available at home.”
So how can retailers make the most of the Olympics and what have they done so far? With the event so close, it’s crucial to make sure that marketing, logistics and transport plans are all ready to go.
Make the most of Marketing opportunities
Marketing around the Olympics can be a minefield, and retailers that aren’t sponsors might want to double-check any material of which they are uncertain.
Marks & Spencer’s latest campaign is a good example of how to toe the line while still getting it right. Marketing around the Olympics period will be largely about Britishness and celebration, which is often something that many UK retailers do well anyway. With a slight reference to sport – the advert features Dannii Minogue in an egg and spoon race – and heavy use of the Union Jack, the M&S summer campaign taps into the national mood surrounding both the Jubilee and the Games while neatly side-stepping any trouble with the Olympics organisers by not using any Olympics branding.
In-store, promotional offers will help retailers attract footfall, and FMCG brands such as Coca Cola and Cadbury, which are Olympics partners, can use Olympics-related material. It’s possible to mention the Olympics in some ways, but you need to be careful about how you do it. “It’s not a blanket ban, you just can’t appear to have an affiliation,”
says Jonathan McCallum, director of sponsorship at consultancy OgilvyAction. But he says it’s worth making the effort to think creatively about it. “The Olympics was massively oversubscribed – 20 million tickets were applied for when there were only 6.6 million to receive – and all those people will be interested in engaging with the event in a different way.”
Many of the rules on Olympics-related marketing will be relaxed after August 15, and McCallum advises considering retaining a bit of budget to take advantage of any changes in mood or new sporting heroes that emerge.
“People can have the biggest engagement afterwards – there are often new sports people to be interested in, for instance, because we’ve got a new champion,” he says.
But Wendy Lanchin, director of planning at consultancy The Marketing Store, warns that retailers should avoid being disingenuous and stick to areas that chime well with their brand. “Make sure that whatever you do is true to who you are and you’re not jumping on the back of what happens to be there. Gauge how the nation is reacting – and your customers in particular – before making decisions.” While there are plenty of opportunities to tap into the event and the fervour surrounding it, brands should steer clear of forcing themselves into an area where they don’t naturally sit.
What retailers are doing
Much of the activity for the Games’ retail partners – including John Lewis for the Olympics and Sainsbury’s for the Paralympics – has been during the run-up to the event. Sainsbury’s has been running its Million Kids Challenge designed to get more children involved in sport. Sainsbury’s retail director Helen Buck says: “The challenge is about getting 1 million kids across the country to try out a Paralympic sport. We’ve already got over
2 million kids signed up and it’s a great way to raise awareness of the amazing skills and sportsmanship of the Paralympic athletes.” The retailer is also running in-store promotions offering customers the chance to win tickets to the Paralympic Games, and is taking 5,000 staff to the event as well.
John Lewis, meanwhile, is rolling out 29 Olympic shops within its department stores that will stock up to 3,000 Olympics products, and is supplying the Olympics site with furniture.
Elsewhere, retailers are having to skirt around the Olympics branding and instead are focusing heavily on emphasising Britishness. Selfridges has a range of British-themed events in store between May 4 and the end of August, which it describes as a “mash-up of British culture, history and tradition, from iconic to eccentric”. The Big British Tea Party will involve afternoon tea on the roof of the Oxford Street department store, and the Britannica exhibition will take inspiration from a series of fashion features published by Vogue UK in the early 1950s. The Big British Shop will also open on May 4, and will feature products created by British brands or have British character.
Transport and logistics
The major issues will be in London, and Transport for London (TfL) says some planning will be necessary for retailers in the capital. “It’s going to be busier than normal at certain locations at certain times,” says road freight programme manager Ian Wainwright.
Crowds will start to build from July 21, when the Olympic torch relay hits the capital, and TfL has a journey predictor on its website to help businesses work out the best route and the expected time. Courier company DHL is also using various algorithms to predict how long journeys will take, and transport strategy and policy director Hugh Basham says its accuracy will improve once the Games begin and more data is available. “The first two to three days will give us a very good understanding of what the impact will be,” he says.
There will be three busy peaks on an average day during the Games. Many events start at 9am, so spectators and athletes will be travelling early, and much of the audience will be making their way back at normal evening peak times. There will also be a third peak later around 11pm, when the evening events finish.
Some retailers will also be affected by the Olympic Route Network, 109 miles of London’s roads where Games traffic will be given precedence. Normal traffic can use the route, but may find it hard to get on or off roads because of some limited left and right turns. For stores that are on the route, deliveries will need to be made between midnight and 6am, and retailers will need to make sure a store has enough staff working overnight to manage. “Some deliveries will need to be re-timed or re-routed,” says Wainwright.
Retailers are working with their suppliers to cope with disruption – DHL has done impact assessments for its customers and scoped out the main challenges for each one. But while there are undoubtedly some logistical challenges, Basham says his clients are positive about the overall effect of the Games. “There’s a momentum building up,” he says.
At Westfield Stratford, the main challenge will be crowd control, with 70% of the visitors to the main Olympics site set to walk through the shopping site. “We’ve been working for the past couple of years on preparing and being ready for the sheer volume of people that will be coming,” says Westfield UK general manager of marketing Myf Ryan. Much of the work has involved helping tourists to get around, such as multi-language maps and ensuring there are enough multi-lingual staff on hand.
Delivery of stock is another challenge, with high security around the site potentially causing difficulties. A consolidation centre eight miles away from the site has been set up to help retailers tackle this.
Economic impact
Visa predicts in a report assessing the impact of the Olympic Games that there will be £750m in additional consumer spending during the Games period, which will run from July 27 to August 12. Of this, it says £184.8m will be spent with high street retailers, and £79.9m spent at supermarkets – these figures don’t include the impact of the Paralympics.
International visitors are expected to spend £709m in the UK over the seven week period, an 18% increase on what would be expected if the Games were not taking place. Domestically, a £41m spending boost is expected – which, Visa says, is a first for an Olympic Games host market which usually experiences a domestic spending slump during the event. The report says domestic demand will be driven by the public’s enthusiasm for the Games, shown by the high demand for tickets. It adds: “British residents are likely to switch from traditional patterns of summer spending to getting into the Olympic spirit by stocking up on supplies and entertaining at home. Supermarkets will be particular beneficiaries of this.” The study also points out that the Sydney Olympics produced £1.1bn increased visitor spend during its Games year.
While the long-term impact won’t be clear for a while, what’s obvious is that the Olympics is a big opportunity. With customers keen to forget their woes and indulge in a bit of sporting fervour, it’s there for the taking.
No comments yet