World Cup boost predicted for Online Retailers

With less than a week to go until the Fifa World Cup starts in South Africa on the 11^th of June, online retailers have been taking advantage of the summer of sport theme, as the centrepiece of their marketing proposition. The manner in which people intend to watch the World Cup has evolved and according to Unique Digital 54% of UK fans are now set to view the games over the web. Ecommerce has also developed significantly since the last time this competition came around, forcing agencies and marketers to take advantage of this medium in dynamic and creative ways. New benchmarks have been set and retailers are increasingly becoming concerned with multichannel advertising.

In a bid to boost sales online retailers are offering all sorts of World Cup related deals right now. Many retailers are still recovering from the after effects of the recession and are hoping that the World Cup will help to restore consumer confidence. Technology and Sports retailers in particular have given their websites a World Cup feel, promoting goods from widescreen televisions through to football kits. Some retailers have employed what could be deemed risky strategies if the England team are able to achieve perhaps the unthinkable this Summer! A few of these themed promotions have been reviewed in more detail below:

Predicted impact of the World Cup for Online Retailers

The World Cup is the largest sporting event in the World, second only to the Olympic Games, a uniting sporting event involving a high proportion of the population. As a result of this mass appeal and viewing figures there are natural implications for consumer spending and retail businesses. According to Kelkoo, pre-planned online spending during the tournament is expected to be significant, with an estimated 15% (£93m) being spent to televisions and electrical goods, 11.9% (£43m) on sportswear purchases and 11.6% (£11m) on memorabilia. The data collected by the Centre for Retail Research predicts that for every goal scored past the initial group stages will be worth around £126m to online and high street retailers. These figures are based upon an analysis of the previous impact of the 2006 World Cup along with trade estimates. Internet sales in particular are expected to hit the £116m mark by the end of round two, increasing to approximately £205 million if the team makes it to the final.

Food and drink is the largest area of expenditure in line to benefit from the tournament. Next in line and predicated to be significant online are electrical chains such as Curry’s and Comet who are expecting to see sales of high-definition or 3D televisions to soar as fans upgrade their sets. The World cup is not only a lucrative event for pubs and bars, online and high street retailers are also set to reap the benefits. England’s progress through the tournament is likely to reinvigorate sales in the retail sectors, drive consumer confidence and ultimately economic growth.

A review of the World Cup themed Online Offerings & Promotions

Argos

Is a prime example of a retailer utilising multichannel strategies to capitalise on the interest in the tournament with a nationwide promotion called the ‘World Truck’. This is a competition which involves a truck packed with £5,000 worth of World Cup related merchandise including footballs, televisions, barbecues and garden furniture, driving up and down the UK. Consumers are given the chance to win the contents of the truck by entering a competition on a specific microsite which underpins the campaign. The site is supported by activity in Argos stores throughout the country, along with affiliate, search and targeted email activity to around 6.5 million customers.

Curry’s

Are currently running a promotion both online and in-store until the start of the competition, offering consumers the opportunity to get £10 back for every goal England scores (penalties and own goals aren’t included). Although there are terms and conditions which include that the TV purchased has to cost £599 or more and once purchased, consumers must register their purchase online within three days, unless it is not possible to claim your cash back. Then once the tournament has finished, you have to print off registration documents and post them in a fixed time frame.  The reality of the promotion is that you can go through the whole procedure to claim your cash but you might only see a return of around £60 to £100, which doesn’t sound quite as impressive as the promotion initially sounds.

The Telegraph reviews Curry’s giveaway strategy to determine the riskiness based upon the calculating the performance of the England team in previous World Cup tournaments. In the 12 tournaments played since 1950, the team have scored 74 goals, minus 8 penalties and 2 own goals, the figure falls to 64.  Therefore indicating the average number of goals per tournament, in Curry’s terms is 5.3 goals. Rounded up to an average of 6 goals, for every TV that Curry’s sells this summer, the company is likely to have to pay out around £60, so actual takings on a £599 TV will actually be £539, meaning costs still remain covered. However the strategy could prove risky if England are able to progress throughout the various stages of the competition.

Littlewoods

According to Brand Republic Littlewoods have also launched a project aimed at both football enthusiasts and those hoping to avoid the tournament. The ‘One Stop Shop’ campaign is aimed at consumers looking for themed patriotic products and provides an alternative activity for consumers with very little interest in football to browse and select items of interest during the games. A voucher code is provided and by opening a new account, consumers are offered the opportunity to buy anything and if England wins the World Cup all items will be refunded.

What does this mean for UK Retail?

UK retailers are inevitably set to receive a considerable financial benefit resulting from the forthcoming World Cup. According to Unique Digital, looking forward the digital medium is set to play an even bigger role. For the 2018 England World Cup bid, search strategies are already being used. Advertisers are also using Social Media and BT has set up a Facebook campaign aimed at backing the bid for the World Cup and 10,000 users have already signed up. Furthermore looking closer to home we are set to host the World’s largest sporting event in the form of the London Olympics in 2012, which will provide a substantial economic benefit for many sectors including retailers. We will be closely monitoring the online marketing strategies adopted by retailers in the run up to the games, so keep checking our blog for more information.