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VIEW FROM THE INDUSTRY
John Nagle is Managing Director of Sportsrisq Capital, which provides customised financial contracts linked to sports results, with a view to enabling businesses to offset risk and grow sales. Here he explains how Sportsrisq products can be used by retailers to better manage the supply chain and drive innovative promotions.
Professional sports results can impact your bottom line significantly. England’s early exit at the World Cup is a good example, as many retailers were left with warehouses full of unsold merchandise when the team lost. When key regional and national teams under-perform, demand for replica and teamwear is diminished. Likewise, when those teams are winning, it creates demand.
Supply chain management
Retail success relies on having the right product in the right place at the right time. Because major manufacturers require advance orders, buying decisions are often made without a clear idea of market demand. Sportsrisq helps mitigate results-related risk, optimise inventory levels and maximise profits with customised financial contracts that pay out based on key sports results.
For example, sales of England rugby shirts next year will largely depend on how the team performs in the 6 Nations and Rugby World Cup. Good results will lead to more sales but poor results reduce demand. You can’t know how England will perform but by using Sportsrisq contracts you can make sure you have enough shirts in stock if England’s results lead to higher demand, without risking the potential losses from unsold stock if on-field results are poor.
Innovative Sales Promotions
Sportsrisq contracts can also drive promotions. You can offer customers guarantees based on sports results and then cost-effectively eliminate the liability using a Sportsrisq contract.
For example, to boost sales of Chelsea replica shirts, you could offer a full refund on purchases before the end of September if Chelsea win the Premier League and FA Cup double again. The cost to your business would be equivalent to only a 9% discount but the promotion is far more appealing to fans. It’s a highly visible offer that associates your brand with Chelsea (or any successful sports team or athlete), generates significant early sales and invokes customer loyalty.
Sportsrisq enables retailers to cost-effectively reduce risk and increase profits of replica and teamwear products no matter what the score is.
