Sporting Goods P-O-P: Breaking the Rules

Harsh as it may sound, the sporting goods industry has long been an unsophisticated market when it comes to in-store merchandising materials. It seems ironic that an industry supporting such mega-marketing events as the Super Bowl and the Olympic Games has not been more aggressive in marketing its own wares.Retailers are picking up the pace, however. Some are bringing in people with outside experience in marketing. Citing as an example the East Coast chain Herman's Sporting Goods, K.T. Morris, vice president of the marketing company Milton Merl & Associates, New York, says, "A lot of the retailers are bringing in people from other industries." That background should be a big help, says Morris, because "Sporting goods retailers have not been as proactive in their presentation of goods as grocery or drug or mass or any of the other trades ... but they recognize the need to be." Awareness has bubbled up "fairly quickly," she says, because "their businesses have been off financially."And, as the stores themselves expand and focus on "retail as entertainment," manufacturers are picking up the pace with more -- and more elaborate -- P-O-P.STATE OF THE INDUSTRYIn its state of the industry report for 1995, the Sporting Goods Manufacturers Association, based in North Palm Beach, Fla., noted "major structural changes" taking place on both the manufacturer and the retailer side of the business. SGMA President John Riddle observes a "boom in corporate mergers and restructurings" among manufacturers. "There are now close to 70 publicly traded stocks involving companies in some facet of our industry, which is about 20 more than five years ago," he says.The trend toward mergers and acquisitions has resulted in the formation of "mega-companies." Nike purchased Canstar Sports earlier this year; Weider Fitness, Welso and Pro Form merged; and DP, Roadmaster, Nelson/Weather-Rite, Hutch and Willow Hosiery all came together under the Actava group.At the same time, the industry is undergoing what Riddle terms "retail re-engineering." The explosion of "megastores" or "category killers" is redefining the game to a large extent. In the past five years, the traditional sporting goods retail base -- the full-line mom and pop store -- has been eroded by superstore chains that continue to expand. According to the SGMA, Sports Authority plans to add another 25 stores this year and Athlete's Foot aims to open another 50.Just five years ago, the concept of a category killer store was still a questionable one in the sports business. A 1990 article in The Sporting Goods Dealer said emerging retailers like Sportmart, SportsTown and Sports Authority offered "everything a customer could want in a sporting goods store and more." But still it asked, "Can they work?"Today, the continuing advance of these carnival-size stores is making sporting goods marketers reconsider P-O-P. "Category killers have knocked out the local retailer," says Dave White, merchandise planning manager for team sports at Wilson Sporting Goods, Chicago. The superstores know that "merchandising is a way of adding value to the shopping experience.""The whole climate within the sporting goods industry is changing with the megastores and the large chains -- even the large discounters have pretty extensive sporting goods departments today," observes M. Scott Smith, marketing communications manager at Rawlings Sporting Goods, St. Louis. "And these are groups that have historically put P-O-S at the forefront of their presentations -- unlike the mom-and-pop shops of the past that stocked baseball product only in season."In addition to understanding the value of P-O-P, megastores differ from the traditional sporting goods dealers in that they have well-defined (some would say cast-in-stone) merchandising plans and display preferences. They typically have professional store design advisers, on-staff and otherwise, so they know what they want and why. Furthermore, as volume buyers of some magnitude, they have the clout to demand exclusive, custom programs or to turn their noses up at co-op materials."The big stores generally design [P-O-P] on their own and then we see it through," says Tracy Sellers. Sellers is advertising and promotions manager at Fountain Valley, Calif.-based Asics Tiger Corp., a technical brand with lines in volleyball, crosstraining and running, among others."We try to talk to them a little about the design and the corporate image if their concept doesn't feel like Asics," Sellers notes.Generally, she says, the stores get what they want. Where an agreement can't be reached, or the store's master plan prohibits outside fixturing, "maybe we can give them clocks or neon signs or posters -- some other way to fill the store."Claudia Stearns, marketing services manager, Mizuno USA, San Francisco, agrees. While developing a women's softball merchandising system, she showed six sketches to Mizuno's key accounts. "Eighty percent said, 'If we're really on board with whatever you're launching, we would find room for this. But it can't be taller than 52 inches and it's gotta be on wheels.' I had a whole list of requirements by the time I went back to the P-O-P company."The big names -- Oshmans, Sports Authority, Sportmart -- have their own merchandising people and very often don't allow additional P-O-P pieces that aren't produced or designed by their people," she adds. "Often you'll see Nike and Reebok in there anyway just because of the pull that they have. But as a second-tier brand, we find it's very hard to get floor space."On the other end of the spectrum, "We're finding that the smaller, more specialty running and Volleyball accounts are more willing to accept point-of-purchase in any way, shape, form or size." Old standbys like shoe shelves are accepted by "80 percent of accounts," Stearns estimates, although "Athlete's Foot and Foot Locker just have their own shoe shelves and there's nothing we can do but ship our product."The category killers "are making a big difference," agrees Jenifer Larson, retail promotions manager at Chatsworth, Calif.-based K-Swiss. "It's been really interesting to see our retailers create these gigantic stores. But they don't necessarily have the budgets to create a square-inch-by-square-inch store environment. So they've asked manufacturers to come in and create concept areas. That's pretty smart. We still have a catalog of co-op P-O-P, but some of our development resources are going into concept shops now."P-O-P STEPS UP TO PLATE"Sporting goods retailers are becoming bigger and bigger," says White of Wilson Sporting Goods. "The next logical progression," he predicts, would be for "the Sports Authoritys and the Sportmarts to go up against the Wal-Marts, Kmarts and Targets. One of the things sporting goods retailers can do to differentiate themselves from the mass merchants is to have better P-O-P displays."The trend has been away from the pro-specialty and regional chain business and "going over to the mass merchants, the Sports Authoritys of the world. And to combat that, they're calling upon manufacturers for help," says Milton Merl & Associates' Morris. Luckily, manufacturers are "open to investing more of their money" in point-of-purchase items than they have been in the past. "It's almost a backlash of the industry starting to falter," she suspects.Larry Weindruch, spokesman for the National Sporting Goods Association in Chicago, says it's more fundamental. The need for P-O-P in sports is "magnified," he says, "because it's so visual -- it's such a touchy/feely kind of product line. You try on a ball glove and hold a fishing rod. Something's got to attract you over to that product, to get you interested in it."For years, only footwear P-O-P managed to shoulder its way into sporting goods stores. "Historically, in the industry, it has been the shoe companies that have done all the point-of-purchase," observes White.Nike's early insight into point-of-sale surely played a role in its resulting market domination. Lisa DeNatale heads up Nike's recently merged global and domestic retail marketing department. She says the Beaverton, Ore.-based company has "always supported product, category and brand at the point-of-sale," adding, "We oftentimes aren't able to cover everybody who wants our P-O-P."One thing Nike won't do is any promotional P-O-P -- no consumer giveaways or sweepstakes. That's because they simply don't have to."Nike and Reebok break all the rules because of who they are," says Avia's Tim Haney, senior merchandising manager. Reebok's little sister, Avia Group International, based in Portland, Ore., supplies "only 2 to 3 percent of [dealers'] business," he says, "so we can't go in demanding space for big freestanding units." Rather, the company focuses on the standard 9-by-4-inch slatwall allowance. "We get resistance from retailers who don't do P-O-P, like a Gart Brothers, but most others are pretty amenable to receiving materials," says Haney. Known in the United States as a predominantly woman's brand, Avia makes footwear and aerobic apparel and accessories.THE NEED FOR CLARITYIncreasingly, hard-goods marketers -- in categories other than shoes -- are beginning to realize the ability of P-O-P to clarify their product offerings.Most marketers consider sporting goods a hard category to present at the point-of-sale. Frequently expensive and often involving hard-to-comprehend features, equipment and shoes are considered purchases more often than spontaneous ones. And in the case of giant stores with 16-foot-tall gondolas and salespeople busy stocking rather than selling, is it any wonder the consumer is left standing dazed and confused in the aisle?"Performance products require more service than a lot of other general merchandise categories," says Prince's Vice President of Marketing Rick Margin. The Princeton, N.J.-based tennis brand is part of Benetton Sports System Corp."At Prince," says Margin, "we believe that the product side of the industry has been far too dynamic with too much product churn." The result of years of "product introductions just for the sake of product introductions is confusion over what your product and your merchandising story is all about." Prince is "attempting to slow down" and instead of using product as the only variable in creating interest, intends to "broaden the scope to include everything from consumer promotions to provocative advertising to out-of-the-box merchandising concepts."Priced at $150 or more, a good tennis racket requires some thought and research on the consumer's part. The same holds true with fitness equipment. A $500 Precor climber tends to be a considered purchase. Actually, $500 is the low end for Precor USA Inc., Bothell, Wash., whose exercise machines run upwards of $5,000 and are sold predominantly in specialty fitness shops. When Precor does venture into a full-line dealership, "we provide a lot of things to try to dress up their stores," reports Marketing Manager Ellie Ballew. Typical displays include hang tags bulleting the ten features of a treadmill or a cross-section of an equipment frame resting on a Lucite shelf. A recent "tech wall" display featuring a mini treadmill cutaway was "amazingly popular" with dealers and consumers, she says.Other marketers are joining the trend to organization. Last year, Rawlings won a major award for its baseball glove merchandising system. This year Wilson is following suit with P-O-P that makes sense of team gear.Baseball gloves are notoriously "horrendous to merchandise," says Mizuno's Stearns. "Retailers are always looking for new and innovative ideas" to solve that merchandising problem.To launch a women's softball line, Mizuno developed a way to categorize its products. Called Body Zone, the system divides the products into clearly defined segments. Zone One is head and hands; Two: the torso; Three: legs; Four: feet; and Five: equipment and bags. Hang tags are color coded into the various zones. A 6-by-3-foot display will tell the Body Zone story via graphics and include a literature pocket. "We're working with Quantum Visual Merchandising [Chicago] to make the rack accommodate any sport," explains Stearns. "With season changes, the retailer can pull out the header card and remerchandise the display for volleyball." The unit debuts this month in Oshmans Sporting Goods stores."Instead of doing 10 different displays, we did one that you could make what you want to make it," adds Stearns. "Of course that drove the cost up, but -- bottom line -- it will be more apt to get up."At Mizuno USA, with lines that include football, tennis, baseball, track, volleyball and golf, "our approach to P-O-P has only grown in the last five years," says Stearns. Before, "whatever we did was very minimal -- shelf talkers, header cards, not anything elaborate. Just last year, for the first time, we did a very inclusive wire rack display that was very well received across all accounts."Wilson, too, is spending more today on P-O-P. "In years past we haven't really had a focused effort toward merchandising," reports White. "So we'll be spending considerably more dollars in 1995" at least in the team sports division, of which White is head. The company also has golf and racket divisions.The team division is developing the Wilson Sports Center to help stores manage the variety of baseball products offered across the brand, as well as "some short-term promotional pieces," White reports.WHAT ABOUT THE LITTLE GUY?Smaller manufacturers are getting on board as well. Ray Jesewitz, an independent manufacturer's representative for backpack maker Eastpak and for water sports equipment maker O'Brien USA, says, "We realize the importance of P-O-P and are working to do more of it."Redmond, Wash.-based O'Brien is now devising an endcap program with Sports Authority to planogram all O'Brien merchandise. "Doing a display at the end of the aisle increases business by 20 percent," Jesewitz says.Eastpak Inc., Ward Hill, Mass., continues to supply mostly disposable P-O-P. The brand's current ad campaign is reproduced on posters and counter cards for store use.In February, the National Basketball Association supported its "I Love this Stuff' campaign release with a slew of inexpensive P-O-P. Of 140 licenses, 40 manufacturers have incorporated the campaign into their own P-O-P, according to Jon Stern, marketing communications manager at New York-based NBA Properties. And he expects that number to rise 50 percent next year. The rack toppers, acrylic counter cards, banners and other items pair game action photography with the promotion logo.VIEW FROM THE OUTSIDE IN"Given our senior management's commitment to merchandising, I think you'll see far more point-of-purchase displays [from Wilson] in 1995-96," says White. CEO John Riccitiello came to Wilson from Haagen Daz about 18 months ago.White confides that Wilson's in-house graphic services department had primarily dealt with just one P-O-P vendor for the past 20 years. As the company increasingly "relies on the supplier to act as our merchandising consultant," White says, that is already changing.As one of the most challenging product categories, in marketer's eyes, equipment is ready for a fresh perspective.Rawlings Sporting Goods recently hired a former buyer from the 500-store Champs chain. Tony Bender's new duties will include merchandising and overseeing store presentation. "Champs is a very progressive retailer," comments Smith. "Tony's years of seeing what works there will help us in better serving the retail community."Last month, Smith says, Rawlings. presented "the most aggressive merchandising campaign that we've ever offered" to its sales reps. The materials "run the gamut from a $1,000 permanent in-line fixturing display all the way down to a $10 logo banner."RETAILERS PERFORMING BETTERRealizing the need to pump up their stores visually, retailers are less likely to dismiss incoming display materials. Stores that traditionally relied on the technical expertise of salespeople are "beginning to see the importance of in-store merchandising," says Merrell Footwear spokeswoman Kim Callahan. "We're seeing dealers coming up with some great ideas for displays and we want to help support their ideas in store."Modesto, Calif.-based Hi-Tec Sports USA Inc., has also noticed "an increase of usage by smaller retailers," reports Erin Dahlquist, marketing communications manager for the technical hiking company that markets rugged athletic footwear.Asics' Sellers agrees: "Retailers are becoming more proactive in taking advantage of our package. And we've been doing a little more research into what the dealer needs." In talking with store management, the shoe maker found that in the past, "displays were often too big. So now our freestanding displays are only 5 feet tall and only 18 inches wide, but they are three-sided."Yet while retailers across the board are growing more interested in P-O-P, they're also putting their foot down on what's acceptable.K-Swiss's Larson says there are "lots" of limitations placed on P-O-P design. "Retailers are very specific about what can go in, that's why you end up doing a lot of custom programs." Originally known for its canvas boat shoes, K-Swiss product offerings now cover several categories including children's shoes. "We've got certain retailers who only use clear acrylic [in all their displays]. And others who like promotional pieces because they like to keep their walls moving. We might only get a three week window [to put something up.]"Hi-Tec's Dahlquist adds: "Large-volume buyers, like Foot Locker, have certain things they can do and cannot do." For example, "they can't use adhesive or stick anything onto the slatwall. And they tend to be pretty compact." Given a slatwall allowance of 10 by 18 inches, she says, "we just have to work within those parameters." Hi-Tec will offer its first co-op program this year; in past promotions, all P-O-P was supplied free of charge.DISPLAYS FOR THE LONG RUNIn Stearns' experience at Mizuno, retailers want displays that last. "Almost every retailer I spoke to said, 'Make sure we can put it away and bring it back out. Don't make it timely, so that it only states one season.'" The unit she is currently designing will have an exchangeable header card that can be used for "all sports and all products and all seasons."Merrell also leans toward longevity, "certainly more than one season," says Callahan. And at classic tennis-shoe maker Converse, North Reading, Mass., marketers are shipping a new two-year program this month for the Athleisure and Performance divisions.For the short term, "low-cost, high-volume things, like posters," are popular at Hi-Tec, says Dahlquist. "For the long term, we prefer more general-looking, free-standing pieces that can be updated with inserts or signage."Larson says K-Swiss has also "taken more of a stand of pushing P-O-P" than in the past. "Retailers do want display materials, but we're also advertising that we have it now." Within the past five years, she says, "our P-O-P budget has at least tripled. It's been the largest area of growth within the marketing budget."The recently formed K-Swiss Retail Services division will oversee the design and implementation of P-O-P going into 1996.Not only is in-store display charged with the goal of educating and selling, at Merrell it must also "create a product identity for our company," says Callahan. Merrell is positioned as an authentic, rugged footwear brand. "We incorporate technical information into all of our pieces," she says. Merrell comprises four distinct business centers: technical hiking, sport sandals, the trendy Front Range and a new rugged walker program for Fall '95."We have to be more creative, more succinct and make sure that the information the consumers are looking for is readily available," she states.MORE CHANGE ON THE WAY"This whole industry will change very dramatically in the next 10 years," predicts Callahan. She believes the focus on merchandising will only grow. Stores of all sizes will hire dedicated merchandising experts as time goes by -- not just the big boys.Another change coming down the pike, she believes, is the way P-O-P is supplied. "It's difficult," she says. "Dealers would like to see P-O-P included in their buy programs. But at the same time, there is a cost associated. You have to put the price of those pieces into the cost of the product, or you have to set it up as a separate program."I think dealers are reluctant to spend money outside of their buying program for the displays. The better retailers aren't; they understand that spending $50 on a nice display can make a difference in sales, so it's a small investment."Whether or not they grasp the value of spending money to make money, paying vendors for anything other than wholesale product seems foreign to sporting goods dealers in the 1990s. Manufacturers typically provide merchandising materials at no charge. "Those days are over," says Callahan. "We've got to give the dealer some ownership in the displays; make it part of a bigger program." Giving stores "an investment in the whole package" can only improve its design and increase its effectiveness, she says.

Sporting Goods P-O-P: Breaking the Rules

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