Industry news

Where have all the brands gone?

In last year’s Sports Trader Directory we listed 24 well-known soccer and 13 rugby boot brands. Now, even though soccer fever is higher than ever before — and rising — the local team boot brand offering is shrinking. In Europe, names like Lotto, Diadora, Kappa and Umbro are well known to all football supporters, who enjoy a wide choice in brand styles, lasts and price points. Here, you’ll battle to find these brands in a store.

Over the years, many boot brands have come and gone … over and over again. Lotto, Patrick and Kappa (they now only supply lifestyle) are the latest casualties.

It is true, a retailer cannot afford the luxury of stocking a brand if it is not going to sell — especially in difficult economic times. It is much easier to stock brands that sell themselves, rather than those that first need a lengthy introduction.

Yet, Sports Trader has had several calls from consumers seeking alternative boot brands — and other brands (not soccer and rugby) have been successfully introduced into the local market (see WHY do brands succeed? Tips from successful brand builders).

Surely, it will ultimately be to the detriment of the independent retail trade and consumers if every single store stocks the same boots from only the biggest three brands, and nothing else? Especially if new brands go the route of selling directly when they cannot find retail shelf space.

FANIE HEYNS asked a few prominent independent retailers selling soccer and rugby boots why there is so little diversity in the market:

» Rashid Cassim, owner of the prominent Rashid Cassim Sport Megastore in Johannesburg
» Tanga Govindsamy, owner of soccer specialist store TG Sports in Johannesburg
» Casey Augostides, director of Cape Town’s oldest soccer specialist store, Mikes Sport
» Imtiaz Karodia, manager of Solly M Sport, Durban’s biggest soccer stockist
» Dirk Klopper, director of the big Klopper department store in Bloemfontein
» Michael Brown, general manager of the Tekkie Town footwear and clothing chain
» Keith McLaren of Desnic’s Planet Sport in Kimberley
» Martin Ferreira of Sportoria, the rugby specialist store based at Loftus Versfeld

Price consciousness

Pricing is a vital factor when smaller brands want to gain market-share, believes Tanga Govindsamy. “If the smaller brands want to gain a foothold and market share they will have to introduce a massive marketing campaign. Also, they will have to introduce a product of similar quality at a lower price to convince customers to move to their brand.”

Rashid Cassim explains that while people watch football on TV and associate with the major teams and with the major players, they ultimately have to put their hands in their pockets to determine what they could afford. Most soccer fans would love to buy the boot that Christiano Ronaldo plays with, but when they put their hands in their pockets, they realise they don’t have the cash to buy that boot. “Reebok supplies our cheapest entry-level boot in football, and it sells very, very well,” he adds.

Solly M Sports in Durban stock a lot of Olympic and Admiral boots because of their entry-level prices, says Imtiaz Karodia. “Those entry-level boots that retail at R149 per pair, amount to 50% of our sales. If we did not stock it, we would definitely have lost out.

“We dramatically increased our market share by doing it. We are sensitive to accommodate people from less privileged communities. We also stock products from Nike, adidas and Puma that retail at between R299 and R399.”

The motto of Desnics Planet Sport in Kimberley is: “We will meet and beat any price”, says Keith McLaren. “If a customer walks in and demands a Diadora, we will try and walk the extra mile to get it for him.

“Price also plays a huge part in purchasing of boots, therefore Olympic boots are bought at a price point in our store.” Olympic is one of their top four brands, along with adidas, Nike and Puma.

McLaren says the emerging black market in South Africa, and more specifically, in the Northern Cape, is a significant factor in the purchasing patterns. “About 60% of our customers are black and 40% white. All our customers are very brand conscious and follow the sport on TV. They want to emulate their heroes and therefore want a boot that has been marketed and branded and personalized by a super hero.”

But, while the R2 000–3 000 price bracket of the boots worn by Ronaldo or Kaka is out of their range, the kids will buy a Nike or adidas boot in a lower bracket because they saw Ronaldo in a Nike-boot and Kaka wearing adidas,” adds Klopper.

Brand consciousness

Do brand ambassadors like Christiano Ronaldo (Nike), Bryan Habana (adidas) and Victor Matfield (Puma), adored by literally thousands upon thousands of brand-conscious fans, keep these three brands largely in control of the SA team boot-market? Is it aggressive marketing campaigns from heavyweight-labels like Puma, adidas and Nike that led to their domination of the shelves?

Tanga Govindsamy says Nike, adidas and Puma control about 90% of the soccer boot market because these brands spend big money on advertising in print and on television, as well as on promotions and sponsorships of top players. (The three go together, because you need to tell the people who sell and buy your boots of the sponsorship through marketing and advertising — ed.).

Govindsamy says when Nike introduces a new boot, there is a massive campaign to advertise the new baby. There is high visibility in the stores, as well as advertising in general and specialist sport magazines. For example, when the Mercurial Vapour was introduced, the contracted players used the boots before the retailers even got the stock.

The association a brand has with a specific team also plays a role, he says, because the team kit and replica sponsor reaps the benefit when the fan’s passion for the team translates into a passion for the brand that supports them.

Therefore fans that support the English Premier League side Manchester United, automatically identify with Nike. People following and supporting Chelsea, identify with adidas. South Africans throwing in their lot with Kaizer Chiefs, would associate with Nike, while Pirate-fans will identify with adidas.

According to Govindsamy adidas, Puma, Olympic and Asics boots were the flavour of the month and the year during the 1960’s and 1970’s. After SA’s reintroduction into the international fold, Nike entered as a soccer brand and went on a massive advertising campaign.

Nike was not originally known as a soccer brand, but by acquiring the likes of Brazil, Manchester United and sponsoring top-athletes, they lured away fans from brands like Diadora or Lotto or Kappa, adds Casey Augostides. With their large turnover, they are able to spend lots of money on marketing and promoting their brand to build further demand from the consumer.

Nike has always spent millions on endorsing individual athletes at the top of their game across sporting codes, like Andre Agassi, Pete Sampras and Roger Federer in tennis and Tiger Woods in golf. That approach has made them well-known across all sporting codes and therefore the brand is instantly recognisable when a customer enters a store. This made it easy for them to become a massive player in the soccer market.

Fashion is important for the youth of today and they want to make a fashion statement with the boots they wear, thus adidas, Puma and Nike with their fashionable image dominate the market, says Keith McLaren. About 80% of their customers would order one of these three brands, while the other 20% would purchase another brand.

“My feeling is that the SA customers, especially those who are in need of footwear, are very conscious of the big brands,” says Michael Brown. “That is because of the massive marketing campaigns built around Ronaldo, Tévez (who was recently transferred from Manchester United to Manchester City for a record amount) and Kaká (considered one of the best footballers of the modern generation), as well as rugby stars like Bakkies Botha, Victor Matifeld and Pierre Spies in the media,” says Brown.

“What makes the difference is the Nike tick or the adidas 3 stripes,” agrees Augostides. “The brand is what is in demand and that has been achieved through massive investment. Do you have any idea what adidas has to pay to be a partner of the FIFA World Cup — an absolute fortune! Work out what they spend in sponsorships of teams and athletes — you will stagger at the figures.”

Dirk Klopper also believes the marketing ploy of using top sport stars to endorse specific product, is a master-stroke. “It has a massive spin-off. They are not dumping dollars in the sea,” he says.

“As a marketing strategy it certainly is very effective. The SA fans are massively brand-conscious.”

For example, when Lionel Messi scored for Barcelona in the final of the Champions League, he unveiled his F50 Adidas-boot and showed it to the fans and all the TV-viewers around the world. The whole marketing around the boots of Messi and the phrase every team needs a spark created a buzz in the market place and fans wanted to purchase that particular boot.

“When the Bafana Bafana midfielder Teko Modise started playing in the pink Nike Mercurial Vapor, the demand for that shoe grew,” says Klopper. Of course, the impact of the player will be determined by his or her popularity in a specific community. For example, the marketing of the Reebok soccer boot endorsed by the French and Barcelona striker Thierry Henry is not a strong factor in the Free State, but in Europe and America Henry is a significant driving force for Reebok, he cautions.

But, on the other hand the Puma Jomo Sono Kings sells extremely well amongst the Solly M customers, in Durban, as it appeals to the black market where Sono was such a soccer legend.

Quality

“When fans buy a more expensive product, they want to know that it is quality, and they seek a referral, and experience has proved to them that adidas, Nike and Puma could fulfil both those conditions,” says Dirk Klopper.

History and heritage

The history of a boot and brand also plays a significant role, says Rashid Cassim. Customers would like to buy a boot that has been tried and tested. That is why the Argentina-range of adidas, which has been in the market for more than thirty years, sells so well.

There are other boots at the same price-points, but customers stick to that boot because they know what they get. This particular boot has survived the test of time and has answered questions about quality and durability successfully.

A brand like Umbro also has a long history, but it has lost a bit of ground, he says, because of recent take-overs and management changes. (About five years ago Umbro was one of the top three brands in the local market — it is still one of the top brands in the UK, where they sponsor the national team.)

“The decision to stock additional brands or not, are dependent upon my past history with the brand, whether the goods you purchase will sell, and on current trends,” adds Klopper. Retailers have to look at the history of a shoe and its track-record because it makes good business sense, he believes. You need to do your homework very properly, because if you purchase one set of one brand, at a hundred pairs in every number from 6-14, you are making a big capital investment. If there is no proper demand, you will take a financial knock. It’s bad business.”

What happens on the rugby field?

Until about seven years ago, most rugby players simply played with soccer boots — until Canterbury successfully introduced a rugby-specific range with a boot for every position. But then, ownership changes in SA resulted in Canterbury concentrating their marketing efforts on their apparel. Their rugby rival, Gilbert, experienced problems with quality and stock availability. And so the rugby market became the exclusive playing field of the big three.

Martin Ferreira, commercial director of Sportoria, says adidas outsold their closest competitors in the rugby market 3:1 in the past three seasons. “A combination between fashion, technology, marketing and heritage has created the demand for these brands and play a much bigger role these days. Players are definitely more fashion conscious and this makes it very difficult for other brands.”

Ferreira says the reasons why Nike, adidas and Puma are the major performers, is because they have an integrated marketing and communications plan. Children and their parents will buy what their idols wear. And the advertisements in the printed media, TV as well as the appearance of players in their sponsored shoes at signing sessions, make the kids and their parents very aware of what the heroes wear.

“That integrated 360^o marketing campaign is very evident when a boot is launched. The big brands market the strong stand-out features of the boot extremely well. “They highlight the technical advantages as well as how it would benefit the consumer, like the mid sole and the benefits for players running on the hard fields on the Highveld,” he says.

“Apart from the integrated plan, the quality of the product as well as good supply and distributions chains are important,” he adds.

Ferreira says that they encountered problems with the Gilbert shoe as they had distribution problems. Occasionally, there were also come-backs, because some customers complained about the heaviness of the boot. Technically, it could not compare to the quality of the Nike, adidas or Puma boot.

Gilbert would be the first to admit that they had problems with the quality and delivery of their boots a few seasons ago, but that has now been resolved, they say, and they are confident that the forward-specific true rugby boot they will be introducing for next season will be a whole different story.

Le Coq Sportif did not introduce the range and series that they distributed in Europe, in the SA market, says Ferreira. They catered for a lower income group. During his ten years at Loftus Versfeld, he has never once seen an advertisement of Le Coq Sportif at this famous ground.

“Demand and sales will determine variety in your shop,” says Ferreira. “Procurement is largely based on history, sales, demand and the relations between you and the supplier.”

Klopper concurs. You operate on demand, and if the demand is not strong enough, you have to sell that boot at a reduced price. They tried to experiment a couple of seasons ago with Gilbert, Mitre and Canterbury, and had limited success.

Michael Brown, general manager of Tekkie Town, says they had the same experience. They stocked a large range of lesser known rugby boot brands like Mizuno, Patrick and Canterbury in the past. “We had limited success with these brands and largely drove sales with lower price points in price-sensitive markets,” he adds.

“When parents purchase boots, they are brand conscious,” says Klopper. “They are strongly influenced by their kids, who are very particular and very specific: They want the boot with which Schalk Burger (Puma), or Matfield (Puma) or Habana (adidas) are running onto the field for the Green and Gold.”

Frederic Michalak, the French international who represented his country in fifty tests and who was used in a marketing campaign for Le Coq Sportif, is a good player, but he might not have the same pulling power in luring kids to buy that rugby boot that Matfield might have, argues Klopper.

An aggressive campaign to increase market-share did benefit Puma a few years ago. They invested in local stars like Matfield, Burger, Bakkies Botha, Fourie du Preez and Jaque Fourie, all senior Springboks. It might have cost them a lot of money, but they gained ground because of that, he says.