Retailers get set for the Games

Retailers have plenty to hang their in-store promotions off this summer and, with the Jubilee and the Olympics lending themselves to cool Britannia action, there is something of a play-off in terms of joint merchandising this year. Throw in a big football tournament and the vague chance of a barbecue summer, and the biggest headache may be accommodating the various promotions.

Not surprisingly, official Olympic partners feature highly in terms of in-store activity, although it is worth remembering that the Olympic Games have not always delivered the riches for which they are often lauded. Losses at the 1972 Munich Olympics of £178m and Montreal at £692m left their cities in the red, while the 1992 Barcelona Olympics scraped over the line with a £2m profit. But the wider economic impact has been rather more positive, with Sydney 2000 generating £3bn in economic benefit, of which roughly a quarter came from national retail sales during the Games. About 40% of tourist spend was also on some form of retailing, of which just 5% was specifically on Olympic merchandising.

For the 2012 Games, Visa estimates the economic boost at £750m, rising to £5.1bn by 2015. However, as much as 72% of retail spending in the UK could be snaffled by London.

For retailers, the nub of the issue is not so much how many visitors will come but where they will come from. Affluent emerging markets are where the biggest retail opportunities lie for the fashion and luxury sectors.

Chinese visitors to the Olympics will be particularly welcome, having propelled the global luxury sector and fuelling consumption across key global cities, including New York, Milan, Rome, Paris and, of course, London.

The final countdown

Little wonder, then, that among the store groups racing to complete new stores in time is Burberry, which is expected to launch its new 23,000 sq ft Regent Street flagship this summer, and Liberty, which on May 31 opened its inaugural satellite store at Westfield Stratford City, taking over a 1,700 sq ft space in the main promenade, which visitors to the Olympics 2012 will walk down on their way to the park.

Liberty’s visual identity team has taken the Regent Street colour palette and surface textures as their basis and has used the vintage display pieces, whimsical curiosities and the quirky objets d’art that Liberty is well known for. It has made the most of its Britishness rather than references to sporting endeavour, so outside the store Games-goers will see two guardsmen in full regalia offering photo opportunities. In the window, a giant photo booth has been hand-painted by the Liberty team to resemble a retro British seaside attraction and customers can pose, then see their images on Liberty London’s Facebook page.

US lingerie giant Victoria’s Secret is also in a sprint to debut in the UK before the Olympics, with its first store scheduled to open on Bond Street on July 25, two days before the start of the sporting spectacular, and its Westfield Stratford City store expected to open a day later.

The proximity of Westfield Stratford City to the main Olympic stadiums makes the focus of the retailers somewhat inevitable. And with that in mind, Westfield department store anchor John Lewis has opened official London 2012 shops in all its full-line department stores. It has also dedicated space to London 2012 merchandise in all its At Home stores, as one of its promotions as an official sponsor and a brand that backed the original bid.

The shops-in-shops showcase up to 3,000 official products and give customers across the UK access to official Olympic and Paralympic merchandise. Shoppers will also have the chance to ride a specially designed, pedal-powered Team GB Scalextric velodrome cycling Set in selected stores.

Nat Wakely, director of selling operations at John Lewis, reflects: “The official shops-in-shops use the LOCOG branding. In late May we also adorned the escalator atrium in our main Oxford Street store with red, white and blue streamers. The design was picked up in the windows too. So they have a patriotic flavour, which has doubled up for the Jubilee and the Olympics.”

Wakely adds: “We also arranged for events and promotions at our stores to coincide with the passage of the Olympic Torch to try to bring some of the 2012 excitement to all our regional stores. This has been new ground for us. We haven’t aligned ourselves with an event such as the Olympics before, and it is hard to predict its impact, especially as the Jubilee was only a few weeks before, and so there was a lot of focus on that before the public really started to engage with the Olympics.”

Paralympian push

In the run-up to the Games, Sainsbury’s is going to increase Olympic-related activity. Three key areas of focus will be in-store branding, fresh produce and merchandise. Sainsbury’s will be highlighting the Paralympians throughout all its stores and will include extensive in-store point of sale. In 50 of its key stores within the M25, it will be taking this a step further by branding the fronts of its stores with its sponsorship and pictures of its Paralympic ambassador, Ellie Simmonds. Many fresh lines have been repackaged to incorporate the Paralympic sponsorship and branding, and sponsorship will be amplified with hanging advertising in the ‘fresh’ area of each store. Para­lympic branding will feature solely on British produce. ­Sainsbury’s will also continue to unveil Para­lympic merchandise, including exclusive items such as Union Jack mascots and Paralympic barbecues in the lead-up to and during the Games across all its stores.

Team GB merchandise

Next, the official suit and dress supplier to Team GB, began selling replica men’s navy suits with a gold handkerchief from May 19 at 31 of its UK stores. The official Team GB logo and badges have been removed from the £220 men’s version, although the dresses to be worn by the country’s female competitors could not be produced at low enough cost for retail. Instead, casualwear and accessories have gone on sale.

Next chief executive Lord Wolfson says: “Promoting the brand, particularly now that we’re developing an international business, I don’t think we’ll see any overnight or instant impact from the Olympics.”

To promote the merchandise, the retailer has installed a stand featuring an official Team GB and ParalympicsGB scarf, with information about the fact that it is official merchandise. Next will also feature dedicated scarf windows to coincide with the passage of the torch through the relevant towns and cities. Team GB is dotted among the wider merchandise and product is featured in womenswear, menswear and the kids’ department.

Adidas, which is the official sportswear partner of Team GB and ParalympicsGB, has manufactured the team kit that will be worn by the British athletes at the London 2012 Olympic and Paralympic Games, created by British designer Stella McCartney.

Replica ranges of the British team kit went on sale in April, but the most tangible result of the collaboration is the Adidas by Stella McCartney standalone store on Fulham Road in London. The two-level, 800 sq ft store forms part of an attempt by Adidas to usurp Nike as the leading sports brand in the UK. At the opening, McCartney described the store, designed by architect APA, as “an amazing way to finish off the full voice of the brand”. The design will provide the basis for the “next generation” of store design for Adidas by Stella McCartney around the world, according to the company.

Like other companies going big on the Olympics, Adidas hopes that McCartney is not the only British star performer this summer.