Intersport has decided to restructure its private-label offerings and the layout of its stores as part of a new integrated product, marketing and merchandising strategy based on an enhanced brand image and a new philosophy of bringing “sport to the people.” The idea is to project a more universal, active, dynamic and emotional image than before and to make the Intersport brand more attractive by taking into consideration the female forces in the market as much as the more performance-oriented and health-conscious segments of modern society.
Intersport International Corporation’s new “Group Stategic Plan 2016” has been well received by the retail organizations that license the Intersport banner all over the world , which have agreed to implement it gradually over the next years, starting in 2010. According to Franz Julen, chief executive of IIC, it has also been welcomed by the major sports brands that work with the organization most closely.
There is no change in the group’s goal to grow its own private-label business to represent 25 percent of the affiliated retailers’ sales, way below the ratio of Intersport’s major competitor, Décathlon. At Intersport, their penetration has been stagnating at around 17 percent overall, with wide differences from one country to the other.
Under the new plan, which is to be reviewed every three years, this goal is to be achieved by reducing the number of private labels from 12 to six or eight depending on the country, with each one representing a different “sports universe” and encompassing all kinds of textile, footwear and hardware products. So far, such a comprehensive product strategy was fully applied only to Intersport’s own outdoor brand, McKinley, which has grown to be its biggest private label.
Four former private labels – Crazy Creek, Northbrook, Online and Sierra – will be completely eliminated from Intersport’s international ranges, starting with the fall/winter 2010-11 collections. Two others – Dynatour for golf and Nakamura for biking – will only be used by some of the national licensees.
This will allow Intersport to concentrate all product development, merchandising and marketing efforts on six private labels. In addition to McKinley, the new “Big Six” of Intersport will include Energetics, Techno Pro, Firefly, Pro Touch and Etirel. They will be sold in all the countries where Intersport is represented, and they will stand for different sports categories than before.
The Energetics label, which was mainly used for fitness equipment, will apply to all kinds of products related to fitness, wellness, body care and body balance, including the related softgoods. Techno Pro will be for winter and racquet sports equipment, boots and clothing. Firefly will be associated with swimming, board sports and beach sports. Team sports and running will by covered through Pro Touch. Etirel, the former universal activewear brand of Intersport, will concentrate on “active sportstyle,” i.e. mainly sporty leisurewear.
In tune with this new product strategy, the retailers affiliated with Intersport will be asked to rearrange the layout of their stores by creating “sports universes” for three or four focus categories such as running, football, outdoor and winter sports, each featuring all kinds of related products from hardware to apparel and footwear, and blending the corresponding private-label offerings with those of other brands. Also, certain visual store elements will lend a more dynamic and fresh appearance to the brand Intersport.
This new category approach has already been successfully tested at pilot stores of different sizes in Italy, Sweden, Germany and Austria, where it has triggered a marked increase in the customers’ average purchase ticket at the check-out counter thanks to cross-merchandising of related products. Intersport officials point out that the new store concept makes it possible for a limited number of individual brands to run soft shop-in-shop concepts highlighting their excellence in specific sports categories. Many of them already address the market by category, Julen noted in the course of an extensive interview at IIC’s new head office in Bern.
Designed to provide a plus of up to 5 percentage points in the gross margin for the retailer, Intersport’s private-label program will continue to be positioned as one that offers a high price/value ratio, but IIC’s product development teams, which have been vastly expanded in the last few years, will endeavor to segment the ranges more deeply at different price levels, while improving their quality. Only a few image products will overlap with the low-price offerings of the major brands. With the help of the new SAP system implemented by IIC two years ago, the number of SKUs will be reduced.
As in the past five years, these exclusive ranges and the inline products and SMUs agreed with the major brands will consist of three types of items: mandatory products that must be ordered by all the national Intersport licensees, creating volume; core products where the national licensees must pick out at least 50 percent of the range; and complementary or optional products.
Intersport will continue to target mainly technically demanding, sports-minded customers, but some efforts will be made to address more consistently two types of consumers – retired people and working women – whose growing importance in society has been somewhat neglected until now. The group’s new marketing plan targets them as well as youngsters and families, taking into account various mega-trends that Intersport has discovered through consumer surveys conducted in seven different countries.
They have shown that the beauty and the convenience of the shopping environment are important for women, who tend to manage up to 80 percent of the family budget. They have also shown that consumers of all ages have become smarter and more demanding, and that they are sensitive to values that they associate with sport such as health, wellness, fun, community spirit and work-life balance.
While reaffirming its commitment to performance sports, the world’s largest retail organization sees its mission statement as “taking sport to all the people” with these requirements and values in mind. For Intersport, this is an enhanced brand concept that it will strive to convey through more joyful and dynamic advertising campaigns and a more attractive look for its stores. Julen sees it as a new mindset or a new DNA for all the 50,000-odd people who work for Intersport, adding that it should even affect the tone of voice used by the salespeople on the shop floor.
There will be no basic change in the Intersport logo, but it will be accompanied by the “Sport to the People” phrase, written in a convivial typeface, and by an artistic brush stroke in a softer shade of blue. A new “welcoming curve” and other rounder shapes will be used around the Intersport banner and in the store fixtures, along the lines of the shop design of the recently opened pilot stores.
There are no plans to increase the advertising budget, which remains at around 3 percent of sales including the investments of IIC, the national licensees and the affiliated stores, but Intersport officials hope that the new marketing plan will allow the group to use the budget more effectively.
The new strategic plan follows a decision made by IIC’s board in April 2007 to update the image of Intersport. To do so, the group has set up international task forces involving its national licensees. It has also worked with three research institutes that have sounded out more than 4,000 consumers.
Julen and two other members of IIC’s top management, Werner Zill and Markus Heibling, presented the new strategic plan to all the national Intersport licensees during a four-week roadshow that ended a few days ago, with stations in Bern, Paris, Oslo, Gothenburg, Helsinki, Barcelona, Bologna, Athens, Amsterdam, Wels (Austria), Heilbronn (Germany) and Ljubljana. Constructive discussions were held with all the national licensees and the implementation schedules were discussed and agreed-upon with each one of them.
The roadshow followed the approval of the main guidelines of the new strategic plan by IIC’s board last June. The board has also decided to continue the current process of verticalization and international expansion. Since Julen was appointed at IIC’s president 10 years ago, the staff at its head office has grown from 32 to 120 persons, plus a similar number of employees at Intersport’s sourcing office in Shenzhen. The modern new building that houses its headquarters in Bern can be expanded in case the group diversifies into other product sectors, but there are no plans to do so for the moment as the new strategic plan will require a lot of energy and resources.
