Wal-Mart catches soccer fever
Posted on Thursday, June 8, 2006
The world’s largest retailer loves the World Cup.
Courtesy of Wal-Mart Stores Inc., Argentinians will be able to watch the international soccer tournament’s matches live this month in ministadiums set up at the chain’s supercenters. In China, Wal-Mart shoppers can practice dribbling through an obstacle course. And in the United States, shoppers can watch soccer demonstrations and play games on fields of artificial grass.
“The World Cup is very important for us,” says Mike Cockrell, vice president of international marketing with Wal-Mart in Bentonville. “It touches a lot of our customers.” In fact, it’s the world’s mostwatched sporting event. The 2002 World Cup final match between Brazil and Germany attracted 1. 1 billion viewers worldwide.
At Wal-Mart, grand-scale soccer fever is a new byproduct of its growing presence abroad and the increasing importance of Hispanic shoppers at home. The effort also fits with the company’s broader strategy to tailor its stores and marketing to different regional, demographic and ethnic audiences.
Alex Mancini, a London mother of two boys, 11 and 13, calls all the soccer hoopla “a good gimmick.” Examining a bag of chips, packaged in the colors of the English flag, at a Wal-Mart subsidiary Asda store one recent morning, she decided they were too expensive at $ 1. 85 a bag but bought a $ 14. 88 “Football Set” that includes a soccer ball, a pump for it, a plastic water bottle and a captain’s armband.
At 155 U. S. stores, the company will have bilingual soccer instructors, posters of Mexican players, and balls with the Mexican soccer-league logo. Wal-Mart is planning ads highlighting its World Cup events on Spanish-language TV channels.
“For many Hispanic customers, this is going to be like having... [the ] Super Bowl, and we intend to fully take advantage of the fact that there is a massive passion for soccer among those customers,” says Stephen Quinn, a Wal-Mart vice president of marketing.
Twenty percent of the giant retailer’s $ 312. 4 billion fiscal 2006 sales came from overseas, and seven of the 14 overseas countries where Wal-Mart operates are fielding teams at the tournament, which starts Friday in Munich. Overseas markets offer Wal-Mart space for more stores and higher sales growth rates than the United States.
Wal-Mart began planning for the World Cup last June. At that time, director of international merchandising Paul Lewellen and marketing executive Amy Markham kicked off global conference calls to brainstorm for productions and promotions. On one call, executives came up with the idea of installing shops selling German food in Wal-Mart stores around the world to play off interest in the World Cup host country. So, Wal-Mart-owned Superama stores in Mexico are currently selling “Lo Mejor de Alemania,” or the best of Germany, with Mosel wines and cookies by Hanover-based Bahlsen GmbH.
Wal-Mart ordered much merchandise centrally from its global procurement office in Arkansas. Wal-Mart stores across the world carry the same team jerseys, flip-flops in national colors, and boys’ underwear sporting the flags of competing countries. Stores in Britain and Germany ordered the most, Wal-Mart says.
In Britain, the current bestseller at Asda is a $ 9. 30 garden gnome wearing a shirt modeled after the English flag. “We’ve had to fly in an emergency order,” says Asda spokesman Dominic Burch.
At an Asda store in London, World Cup merchandise is splashed across the entire store, including food from other soccer nations such as potato chips in flavors like “Brazilian Salsa,” “ Italian Arrabiata, ” and “French Frog Leg,” made by Real Crisp Co., a Welsh company.
In promoting an event that pits nation versus nation, Wal-Mart has to be careful to strike the right tone. Wal-Mart’s local managers in Britain ordered camping chairs printed with the flags of Brazil, Italy and France to sell in... Scotland and Wales.
“A Scotsman will always say he supports two teams — Scotland and whoever is playing against England,” says Ayaz Alam, buying manager for nonfood products at Asda. Ordering the right merchandise from global procurement to tailor the goods in each store to local tastes is a logistical challenge, he adds.
Early in planning for the tournament, Wal-Mart shared information with suppliers such as Coca-Cola Co., Procter & Gamble Co. ’s Gillette unit and Anheuser-Busch Cos. “They got more organized in thinking about tying their activities in different countries together,” says Bob Tufts Jr., senior vice president for global customer development at Coke and the man who oversees the soft-drink giant’s relationship with Wal-Mart.
Still, for all Wal-Mart’s planning, tying promotions to sporting events is always unpredictable. Sales in each market can depend on how the home team fares, retailers and suppliers say. Already, at Wal-Mart stores in Germany, rubber masks in the likeness of longtime goal keeper Oliver Kahn, on sale for about $ 17, are gathering dust after another goalie made the team.
In Britain, Asda signed a deal with soccer star Wayne Rooney and his fiancee to appear in TV ads and promotions during the World Cup. Rooney broke his foot, and it is uncertain if he will play.
If a nation stays in the tournament until the end, soccer-related sales may flourish, but overall retail spending might go down. “If people stay home watching TV, it’s bad for retailers,” says Richard Perks, senior retail analyst at British consulting firm Mintel International Group Ltd. To avoid that, Wal-Mart is relying on “retailtainment,” in-store radio and television that will broadcast the latest scores.
Wal-Mart won’t discuss its World Cup sales expectations. But, so far, Mr. Lewellen says, stores in soccer-mad nations have posted sales gains in soccer balls and TV sets. He hopes sales of beer and soft drinks will soar when the tournament begins. The country with the biggest sales gain in soccer-related merchandise will get an internal prize: the Wal-Mart International World Cup Retail Award.
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