On-field success, backed by conventional marketing methods, is the path that will work internationally, whereas old-fashioned, bloody-minded ‘supporters’ are the core customer at home
Kelvyn GardnerKelvyn Gardner is a consultant in the licensing industry and has worked for clients such as Yoplait, The Topps Company and Finsbury Food Group. His primary role is as the Licensing Industry Merchandisers' Association UK Managing Director.
Nowadays, whatever your passion, you can be pretty sure that there will be ample opportunity to buy official merchandise associated with it. So, if you’re into a favourite TV show, movie, celebrity, fashion or other brand, you can show your allegiance in a hundred ways, from a classic t-shirt to a kitchen utensil.
Sport has long been central to this area of consumer goods. In the UK, sports licensing really started with the Fifa World Cup in England in 1966. Prior to that, even the stores of big clubs didn’t really have the sense of the potential. In that era, Manchester United’s original Old Trafford store, for instance, would have sold the same red football shirt with white round collar trim that you’d find in Bury market; so it’s come a long way in fifty years.
According to our latest LIMA Annual Global Licensing Survey the worldwide retail sales value of the licensing of sports brands in 2016 was just over $25 billion, roughly 10 per cent of all licensing, and the fourth largest category after entertainment, corporate/brand and fashion. The 2017 survey also showed that sport continues to grow at 2 per cent year-on-year, though this is behind the growth of licensing as a whole, which stands at 4.4 per cent year on year.
The world's big sports leagues, and the most famous clubs and teams playing in these leagues, are all fighting for a worldwide fanbase that simply wasn't there 20 years ago
There’s no doubt, therefore, that this is a big sector, and one with huge potential internationally. The world’s big sports leagues, starting with the US quartet of NFL, NBA, MLB and NHL, augmented by England’s Premier League football, La Liga from Spain, Serie A in Italy, the German Bundesliga and the most famous clubs and teams playing in these leagues, are all fighting for a worldwide fanbase that simply wasn’t there 20 years ago.
The idea that English football clubs could gather a fanbase in China, Thailand or Taiwan sufficiently large to launch licensed merchandise ranges in these countries was simply preposterous. And if these leagues aren’t enough for you, then remember that IAAF athletics, Roland Garros tennis, the major golf tournaments and venues like St Andrews, and, in selected markets, cricket and both codes of rugby are having a go. You’re talking about a fantastically competitive fight for hearts and minds of sports fans virtually worldwide.
But is sports merchandise the same thing as products coming from other fields of entertainment? I wonder if sport occupies a special niche all of its own that differentiates it from the rest of the market. In ‘home’ sports markets in USA or Europe, the sale of branded merchandise follows a similar pattern. Fans have an allegiance to a particular club. That allegiance often goes back many years and through previous generations of the same family. Many (though not all) of these ‘local’ fans are paying spectators at the home stadia of these clubs. Their affection for their club’s brand is, self-evidently, much deeper than that, for instance, held by a Gillette razor user, a Tetley tea drinker, or even a Rolex watch wearer.
With conventional brands, a ‘fan’ may find something one day to move them to switch. Pricing, an ill-judged sponsorship, a bad customer service experience, a faulty product, a disruptive new brand, an unexpected gift exposing the fan to an alternative… These are all things that may result in a move away from long allegiance to pastures new. That, I would contend, is extremely unlikely to happen with sport.
I cannot imagine the gravity of a bad customer service experience suffered by an AC Milan supporter that would be a sufficient reason to switch club allegiance to city rivals Internazionale
For example, I cannot imagine the gravity of a bad customer service experience suffered by an AC Milan supporter that would be a sufficient reason to switch club allegiance to city rivals Internazionale. Just how poor would a souvenir from the Nou Camp have to be before a Barcelona fan would give Real Madrid a go? It just doesn’t happen. It’s been described as ‘tribal’ and, to a great extent, it really is. Once in, in forever. You take the good with the bad, and you wear your replica shirt with pride either way.
However, this simply underlines how important the undiscovered (or, at least, unconverted) countries of far international markets are to the merchandising futures of the big sports clubs and brands. They’re a chance to recruit from a huge new demographic that has not yet developed these ‘inherited’ allegiances.
In Asia, or the UAE for example, the sports fans are rather like the unconverted to whom missionary emissaries were sent out in ancient times to proselytise their faith. However, there is a big difference in these markets. Businesses trading in sports merchandise in these markets tell me that this almost religious dedication to just one club is extremely rare. Fans out there want to be associated with success. While this has always been a draw for new fans, even in areas close to home, it is a vital ingredient, in, for example Asian countries. If a club, however historic, powerful and celebrated, is not winning the Premier League or the Champions League, it will not be winning the merchandising trophies, either, in these new markets.
In the 21st century, a couple of fallow seasons and Taiwanese fans will be wearing the Barcelona or Bayern Munich kit. There’s nothing to keep them dreaming of far-away Salford
Don’t believe me? If you think about it, it explains the impatience with which international owners of UK football clubs change manager. David Moyes succeeded Sir Alex Ferguson at Manchester United but lasted less than a season before he got his marching orders. Sir Alex enjoyed more than 25 years at the helm, including a barren run at the start of his tenure. In the 1980s, the club could be patient, its brand had no value in far flung parts of the world. In the 21st century, a couple of fallow seasons and Taiwanese fans will be wearing the Barcelona or Bayern Munich kit. There’s nothing to keep them dreaming of far-away Salford.
So we may conclude that on-field success, backed by conventional marketing methods, is the path that will work internationally, whereas old-fashioned, bloody-minded ‘supporters’ are the core customer at home.
Keeping traditional supporters at home happy while seeding new markets for additional fans elsewhere is not going to be easy, but in a world where sports leagues compete with each other for global dominance it’s the path that every player in this great game must tread.