How can you weather this economic storm? We asked four retailers how they’re keeping above water.
Who would have thought that we’d reach a point in our economy where flat retail sales are considered a godsend. There’s no question that stores around the country are having a tough time. As one tennis retailer puts it, “If you’re treading water in this economy, you’re doing well.”
In tennis, though, we’re lucky in that participation has been growing, despite the tough economy. And while you can’t necessarily equate an increase in tennis play with an increase in tennis purchases, at least in terms of participation, the sport seems to be in a good position to weather this storm. In fact, in some areas of the country, tennis retailers seem to be doing well.
Industry executives surveyed by the Sporting Goods Manufacturers Association feel that specialty retailers will fare better than most general retailers because they have a dedicated customer base. But both brands and retailers are cautious about production and ordering, and managing inventory is crucial. Nearly every company surveyed in the SGMA’s 2009 State of the Industry Report stated that “product development” remained a high priority, even though executives cannot confidently predict their own category sales and are proceeding with caution.
Some good news from the SGMA report is that tennis shoes were among the top three growth categories in athletic footwear, up 5 percent over 2007. And tennis was among the family/social activities that had “statistically significant” growth in 2008 — up almost 10 percent.
But still, times are tough. To help you find retail strategies that may help in this economy, we talked to several retailers about what they’re doing to weather this storm.
A Perfect Racquet
With two store locations, in Avon and Brookfield, Conn., A Perfect Racquet’s Tony Taverna says he’s had to be creative in making sure he lowers the cost options for customers. When people perceive they’ll get a better deal online, “They jump the gun and panic,” he says. “So we offer a different price point where they still get customization of stringing, grips and the right spec racquet for their needs, at whatever price range they want.”
It’s a big adjustment, he says, but it creates a lower price at the low end of the product line. This allows Taverna to still bring in the upper end lines, while offering value and quality at the lower end.
Opening a second store at the end of last year has been a gamble, but a good one, he says. Both locations attract a mix of people and while sales have declined only a few percentage points in the original location — where many jobs have been lost in the financial sector — sales in the new store have been steady, with an influx of customers.
“People are still playing as much if not more tennis, but they’re just not spending as much on supplies,” says Taverna. However, he says stringing and grip sales have been brisk.
And Taverna is keeping tight reins on his stock. “Even though we have a very big inventory, it’s still less than it has been in previous years and we try to stay on top of the trends. It’s nice for people to walk in and see all the choices and price ranges. We take the time to find out what they want versus what they need.”
Also, Taverna is finding that racquetball is gaining popularity again, and his sales in that area have been rising. This follows another trend that the SGMA is finding, too — in the last eight years, while tennis has been the fastest growing sport in terms of participation, increasing 43 percent, racquetball is the second fastest, growing 11.6 percent in that time.
Taverna says it’s distressing and irresponsible when racquet manufacturers keep churning out new models. “It’s not good for the industry and certainly doesn’t give a customer confidence when they see a $240 racquet and the next month it’s online for $129,” he says. “It promotes doubt and isn’t good for the integrity of the market.” He also thinks trade organizations and manufacturers should encourage people to support their local tennis shops.
But there can be a synergy between online and in-store selling, he says. Their own website has been a main source of their stores’ traffic. “We’re looking for opportunities to create value, and make people feel confident, so they still feel they have good choices,” he says.
Match Point Tennis
Despite the economy, sales are up at Match Point Tennis in Fort Lauderdale, Fla. But owner Joel Greenbaum is proceeding with caution, especially with their margins and ordering product.
Greenbaum says manufacturers come to him with program buys, but he refuses to buy things up front for an “artificial” discount that won’t be suitable for their needs — Match Point will fill-in more often rather than making big initial buys so the products that are selling currently will continue to sell. “We’re a very service-oriented business and we try to provide more incentives and promotions and try to educate consumers. We’re very careful and fair in our pricing.”
The 8-year-old Match Point Tennis moved to a new, higher-trafficked location last year, increasing the store size from 4,000 to 6,000 square feet, so they’re still stocking as much if not more inventory than in the past. The new store allows them to offer more services and amenities, such as a court in the store and a massage suite.
And sales have been up, says Greenbaum. January had higher volume than December, and February sales were up 11 percent over last year. “Even in these times, we’re noticing an upsurge in tennis. More people are starting to play and more are returning to it. Ball sales have increased significantly.”
New clothes are discounted by 10 percent for in-store sales — except for children’s clothing and footwear. “Since no one else in the area carries it,” Greenbaum says, “there’s no need to discount it.” They also work with apparel manufacturers on special promotions, for instance Fila and Thorlo had promotions in conjunction with the recent Sony Ericsson tournament. The store typically has different events going on every week. Recently, Boris Becker was there promoting his racquet line. They’ll also have teaching pros offering a variety of programs.
Greenbaum says racquets are discounted 20 percent off internet prices and stringing is also discounted 20 percent. “We’re making a better margin because the formula works better. So much of it is about perception. Our research on our competitors showed that we had better prices than Sports Authority.” He attributes his store’s success to doing business a little smarter and offering superior customer service and selection and extended hours of operation during the week.
The Match Point Tennis website is based out of the store. “We’re shifting more ad dollars from the Yellow Pages to the internet and tying in electronic newsletters that all customers get,” says Greenbaum. “While internet sales are comparatively small, more people call about sales because of the store’s internet presence — especially new customers.”
Craig’s Golf and Tennis Source
Craig’s Golf and Tennis Source in Lisle, Ill., near Chicago, hasn’t changed any selling or marketing strategies as a result of the economy — and apparently hasn’t needed to. Owner Craig Lezatte says the store is experiencing sales that are up 25 percent over last year at this same time, and most of that gain is in tennis, since the golf business is down.
Stringing is a huge percentage of Lezatte’s business, and he’s well-known in the area as a top stringer. He also sells and strings racquetball racquets, and he’s noticed a rise in that sport since there are many racquetball courts in fitness centers in the area. In fact, he sees a definite rise in play for all racquet sports, including squash and badminton, which is also why his numbers are up. “Racquet sports are on the rise — people are getting into it again.”
His store doesn’t sell apparel and doesn’t stock many shoes or racquets. He takes racquet orders from his customers, who are very pleased with this set-up. “Beginners don’t need expensive racquets,” says Lezatte. “There are certain racquets for certain types of players, so I give them a racquet for as long as they want.” That creates sales.
And he doesn’t advertise. “It’s all word of mouth,” he says. “I’ve been in this location for 10 years; I have an excellent reputation and people know that. The key to staying in business is giving great service.”
All About Tennis
“In this economy, our customers are becoming more demanding in service and especially price,” says Pam Ponwith, who with her husband Jesse owns All About Tennis in Scottsdale, the largest tennis retailer in Arizona. “We have to be more patient with customers because they’re more demanding, and we’ve had more returns. But we know our customers really well and they know us. Each shop has to know their audience — we’ve had the same staff for five years.”
In tough economic times, Ponwith stresses a back-to-basics approach with apparel — buying more basic solid-color bottoms with standard fits that can be mixed and matched with a variety of tops. Nike apparel still reigns supreme, but she says customers are cooling toward Nike, citing lack of variety and challenging fits.
Even having one of the largest racquet “walls” in the U.S., Ponwith says sales have fallen off this year. “Customers are still buying, but just not as much. Also, resort and spring break consumers haven’t been as prevalent this year.” She says they cut down on some really pricey items, but they still haven’t cut their inventory much, because they still need to present a large variety to their customer base.
Ponwith finds the influx of new racquets frustrating. “Manufacturers don’t do a good job of handling their merchandise” as far as orders, shipping and production, adding that companies need to treat retailers better and “step up to the plate and not let mega-retailers bully the market.”
In the months to come, Ponwith says she’ll continue to watch expenses. She suggests retailers get more involved with tennis leagues, facilities and USTA tournaments as a way to expand their business. All About Tennis also does a regular newsletter and has a membership program, rewarding loyal customers with different monthly promotions and discounts.
The bottom line is providing great service and high quality. “While we do a lot of stringing and re-gripping, you still have to sell a lot of everything to be successful and realize it’s more important to keep consistent customers rather than go after new ones,” says Ponwith.
Tips for Surviving In A Down Economy
- Provide friendly customer service and follow-up after purchase.
- Be patient with customers; they’re more picky now than in the past.
- Stringing and regripping services are important in this economy.
- Make sure you have a presence on the web; it’s especially helpful in gaining new customers.
- Know your audience; having consistency among your staff will help.
- In apparel, consider going back to basics.
- Work with apparel manufacturers for special promotions.
- Reward loyal customers with promotions and discounts.
- Get involved with leagues and other tennis groups.
- Try not to discount items that only you sell in your area.
- In some locations, consider extending the hours of operation.
- Offer product in different price ranges, to suit all customers’ budgets.
See all articles by Cynthia Sherman
About the Author
Cynthia Sherman is a contributing editor for RSI magazine.