Should we assume to see similar patterns surrounding the postponed Olympics, which have opened in Tokyo and run through to the beginning of August? Not necessarily. If retailers want to make the most of this rare event – or any sporting or cultural occasion, they need to think smarter.
The Olympic effect
Big sporting events like the Olympics can really push consumer behaviour – like an increase in sales of consumer electronics such as widescreen televisions, on which to watch the event. However, sales can also abruptly slow down. In the 2012 Olympics, UK online sales fell 0.2% due to the ‘Olympic effect’ where shoppers bought less online as they were distracted by the games.
Aggregate figures can hide some highlights such as the £100m of Olympic merchandise Adidas sold during London 2012, suggesting that the Games has a positive impact both before and during the two weeks of sport depending on the sector.
Moreover, in some markets, the benefits can be both more subtle and longer lasting than might initially be apparent. In the US, Matt Powell of NPD Group told USA Today during the 2016 Olympic Games in Rio, that “the Olympics is a great way to showcase products, but not one that turns into immediate sales… I have never seen the Olympics themselves get people up off the couch to go buy something.”
High points on the high street
The Olympic Games doesn’t happen often, and this year’s event coincides with brighter economic news – and enthusiasm from the shopping public to enjoy their new-found freedom. For many, that will mean spending time in shops and hospitality venues. Even if the ‘Olympic effect’ sees them spend less than they otherwise might, it remains the perfect opportunity for brands to use smart, effective, and relevant creative, in displays and on bags and packaging to build loyalty among their customers and encourage repeat visits once the games are over.
Vaccination take-up has been good across the EU. Germany, France and Italy all appear among the 10 countries that have administered the most vaccines in total. Hungary, while administering fewer physical jabs, has inoculated more than 54% of its population, Iceland has reached 70%, and Gibraltar has exceeded 100% coverage.
As a result, physical retail is seeing some return to normal. The Bundesbank is projecting a “strong upward swing” for the German economy as bars, cafes and shops reopen, and the rush to book jabs in France – exceeding 20,000 bookings a minute after President Macron announced that the unvaccinated would be barred from cafes and shopping centres – suggests brighter times are ahead. The more freely people are able to circulate, the better, as far as retail is concerned.
A strong showing from southern European countries helped drive better-than-expected results for the European economy with EU countries emerging from a double-dip recession in the second quarter of 2021 with a growth of 1.9% according to figures released by Eurostat. The economy in the 19 countries that use the euro currency grew by 2%. Italy, which saw 128,000 pandemic deaths and a deep recession, was a major positive surprise, growing 2.7% as consumer spending revived.
Sporting events can force sales spikes in specific regions and we are yet to see what effect the postponed 2020 Olympics will have on retail sales. What retailers need to consider more is how frequently they are switching and updating messaging and store fronts as more vaccinated consumers across Europe venture out from lockdown. Events can be a great backdrop to pin this messaging on and it may be that more could be made of them to encourage brand loyalty and footfall.
What’s next on your sporting or cultural calendar and are you prepared for it as a window to showcase your brand? If not, you could be losing out.
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