Tennis Industry magazine

 

Retail survival guide

Tennis shops are facing more and different competition than ever before.

By Mitch Rustad

“Big-box outlets, other specialty shops, the internet, eBay, even the local teaching pro down the street — they all take a bite out of you. Eventually these bites take off a limb.”

The speaker is Chris Gaudreau, owner of Racquet Koop in New Haven, Conn., and bleeding specialty-shop owners throughout the country are probably nodding their heads in agreement.

But specialty tennis retailers have always had to be resilient to survive. And today is certainly no exception. Economic downturns, fluctuating player trends and a long line of hungry competitors make life a constant challenge for even the savviest retailers. But which competitors that Gaudreau mentions above are casting the largest shadows over the specialty retailer? The answers might surprise you.

But first, let’s start with the bright side. According to the latest statistics from Sports Marketing Surveys USA, specialty shops are head and shoulders above their traditional competition when it comes to market share for frequent players (see charts on page 24). Specialty shops garner more than 60 percent of racquet sales and lead their competitors in all other major categories — restringing, apparel and shoes. They only trail slightly in a loss-leader category, tennis balls. “Specialty retailers seem to be holding up reasonably well, even in a flat or even declining market,” says Keith Storey, vice president of SMS.

Clearly, for frequent players, specialty shops are the dominant leader when it comes to tennis retail outlets — avid tennis consumers are still securely in their hip pocket. But that brings up one of the thorniest issues currently facing the whole industry, and it has little to do with increasing retail wizardry or beating the competition.

“The specialty stores don’t necessarily see their competition as retailers like the big-box stores,” says Sam Cook of Völkl, “because the level of service they’re providing, the selection, the customization — all of that means everything to the serious tennis player. The competition is really the fact that there are fewer people buying racquets than 10 years ago.”

Kim Cashman, co-owner of Advantage Yours in Clearwater, Fla., concurs. “We see the trends of consumers as our biggest challenge right now,” she says.

Fewer consumers. Fewer players. Even the most brilliant retailers can’t do much about a shaky consumer base, and Cook says the future focus industry-wide needs to be on the big picture — expanding the consumer base and increasing interest in playing the sport.

Welcoming New Players

Certainly there’s a lot riding on the ambitions of the industry’s Tennis Welcome Center initiative; but the ultimate marketing effectiveness remains to be seen. The industry is being pro-active, but will such programs really fill up the courts, and lead to increased sales at the cash register? “It’s our, ‘If you build it, they will come,’ type of thing,” says Cook. “Give people a great tennis experience. But the next challenge is whether these welcome centers are delivering on the message. Are they up to speed, or just hanging a banner and then dropping the ball?”

Another industry exec says the jury is still out on TWCs. “My biggest thing is there’s still not enough reach to people outside the industry,” says Bruce Dayton, tennis sales manager for Diadora, “which directly affects the players who are already playing. It’s still somewhat of an industry that’s not very welcoming to new people. The industry just needs to outreach further, and keep going in the direction they’re going right now. But it’s a very long process.”

Says Kurt Kamperman, chief executive of Community Tennis for the USTA: “The whole purpose behind the welcome centers was to take advantage of the 5 to 6 million people who take up the game each year, but don’t stick with it. This should be music to the specialty retailers’ ears. We’ve got a huge number of people that are interested in tennis, we just need to introduce them properly to the game.”

However, Cook says many retailers have spotty confidence in the program, as some perceive those marketing programs funneling funds into media and TV advertising, rather than the programs themselves. “There’s some skepticism among retailers,” says Cook. “But it’s definitely the right direction to focus on the health of the sport. That should be and is the priority right now.” One industry insider says taking a proactive, out-of-the-box approach can help determine your own destiny — above and beyond how the TWC fare — and yield more immediate results.

“There are many ways the individual store owner can really help their own cause,” says Maria Stefan, president of Ellesse USA, who encourages retailers to be civic-minded, by working closely with park-and-rec leaders and other community organizations to promote the sport, and themselves, to a wider spectrum of consumers. Offer to speak at groups such as Weight Watchers, and pitch the game to groups that may welcome the sport. “Civic organizations and local groups out there are always looking for new activities,” says Stefan.

Meanwhile, specialty retailers just keep on keeping on, while casting an especially watchful eye on a few evolving — and increasingly dangerous — culprits.

Auction Action

“The internet is an ongoing challenge; I think it’s getting tougher and tougher,” says John Swetka, owner of Swetka’s Tennis Shop in Mountain View, Calif. “We can hold price with the newest product, but when others start dropping, we have to go with the flow of everybody else.”

“I definitely lose customers to the internet, because people feel they can save a buck,” says Gaudreau. “But I also have customers who dislike frames they get off the net, and then want me to exchange it. Generally, I won’t do it. But I’ve converted some of these people into customers, because they see they can get burned.”

But traditional internet tennis retailers aren’t the only troublesome issue for specialty shops when it comes to the Web. The specter of eBay, the self-described “world’s online marketplace,” offers thousands of tennis racquets, apparel, shoes, etc., often for bargain-basement prices.

“eBay is probably the No. 1 thorn in the specialty retailer’s side right now,” says Cook. “By its nature, it’s an uncontrolled scenario.” Manufacturer’s suddenly lose control of their brand image, and because of the global aspect of the internet, international sellers have the potential to offer deals that no one else can match.

“Throw in good exchange rates, and you can suddenly get this great deal,” says Cook. “And our stores go ballistic.”

Gadreau adds, “eBay always has me worried, because you don’t want eBay to be a dumping ground for old racquets. Even stores can dump their product, dirt-cheap. It hurts the market and the product.”

The general industry buzz is that almost everyone — manufacturers, retailers of all sizes, teaching pros, etc. — is using eBay in one form or another, and its potential is unchecked. “I can certainly see why something like eBay would be a problem for these retailers,” says Storey.

Cashman says that while she’s generally unfazed by the eBay phenomenon, the manufacturer’s own internet sites and local concept stores are the real headache for her. “These directly compete with the products that we sell from them,” she says. “This appears as the biggest threat, because the playing field is not level, they have a distinct advantage over us as retailers.”

One thing is certain: none of these are likely to go away anytime soon. In the meantime, specialty retailers will do what they do best: offer first-class customer service, offer the best selection of cutting-edge product, and provide a local haven for avid tennis players.

“You have one point of distribution, so bring home the message that you have products that they can’t get down the street,” says Stefan. “You also have knowledge the others don’t have, so there’s a reason for them to come and see you. In short, it’s about being a specialist.”

Chart #1

Frequent Player Purchasing Trends
(Source: Sports Marketing Surveys USA)

Where purchased RACQUET Late Season 03
Pro/Specialty 63%
Chain Sporting Goods 16%
Internet 12%
Mail Order 8%
Mass Merchant (e.g. Wal-Mart) 1%
Where RESTRUNG racquet Late Season 03
Pro/Specialty 64%
Home Stringer 19%
Chain Sporting Goods 10%
Other 7%
Where purchased SHOES Late Season 03
Pro/Specialty 46%
Chain Sporting Goods 31%
Internet 10%
Mail Order 8%
Department Store 3%
Mass Merchant (e.g. Wal-Mart) 2%
Where purchased APPAREL Late Season 03
Pro/Specialty 48%
Chain Sporting Goods 32%
Department Store 6%
Internet 6%
Mass Merchant (e.g. Wal-Mart) 5%
Mail Order 4%
Where purchased BALLS Late Season 03
Pro/Specialty 34%
Chain Sporting Goods 33%
Mass Merchant (e.g. Wal-Mart) 25%
Internet 4%
Mail Order 3%
Department Store 2%

Chart #2

Pro Specialty Sales, 2003 vs. 2002
(Source: Sports Marketing Surveys USA)

Pro Specialty Sales Late Season 03 Early Season 02
Racquets 63% 62%
Shoes 46% 41%
Apparel 48% 48%
Balls 34% 28%

You Will Survive!

Here’s how to fend off the competition.

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About the Author

Mitch Rustad has been a long-time freelance writer based in New York City.

 

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