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SPORTS

Ecommerce Grows as Channel for Sports Licensed Goods; Department Stores Down

Mirroring North American trends, retail sales of licensed sports products in the U.S. and Canada originating in the ecommerce channel grew slightly in 2014; department store sales were down a tad and the other channels stayed steady, according to TLL’s Annual Licensing Business Survey. Here’s a quick overview of the TLL distribution findings for sports.

Mass/Discount & Specialty Dominate

As in 2013, mass/discount and specialty stores accounted for 70% of all sales of licensed sports goods in 2014. The distribution between the two channels was also unchanged, with mass/discount generating 37% and specialty stores 33% of sales. The findings are in line with retail distribution figures of other property types.

Ecommerce Up, Department Stores Down

As in past years, ecommerce was the third biggest retail channel in 2014, accounting for 11% of sales, a modest increase of 1%. The only segment that declined was department stores, which fell off 1% to 7%. Result: Department stores are now tied with institutional venue as the fourth biggest retail channel at 7%. Next, comes drug/grocery/convenience/variety at 3%, followed by mail order/TV shopping and other which each totaled 1%. None of the sectors mentioned in the previous sentence changed more than a fraction of one percentage point in 2014.

Trends

This year’s distribution figures confirm what we’ve already known for a long time about not only the retail sales of not only sports but just about all forms of licensed goods: ecommerce is the growth segment. Fanatics, the nation’s largest online seller of licensed sports merchandise (the next largest is Amazon) is committed to increasing revenue 500%, from $1 billion to $5 billion, over the next decade. With sports sales expected to grow at low single-digits each year, ecommerce would have to increase market share to nearly 40% for Fanatics to make its goal. But while it may be more about posturing than plausibility, the 500% growth goal represents the current state of optimism about ecommerce’s potential.

In fact, few segments outside of fashion and publishing, have made more progress on the ecommerce front than sports. Every pro sports league has a web site with links to an online store. Most teams have their own websites. So do many retailers, licensees and even individual athletes. Fanatics, the company that operates most of the league and team websites, has made cutting edge improvements in not only technology but marketing and customer engagement.


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