London Olympics 2012: Gold Rush

With an expected 10.8m people turning up to watch events at the London 2012 Olympic and Paralympic Games, it’s fair to say that the event, running from July 27 to September 9, will make the recent Royal Wedding seem like a ‘bit of a do’.

London and the other venues will be subject to unprecedented levels of disruption with new traffic flows and delivery restrictions, but according to analysts and official services provider for the Olympics, Deloitte, retailers do not seem to be concerned by the impact that the organising the Games will have on their business. It reports that 71% of retailers say they expect only very minor or insignificant disruption.

However, Deloitte points out that underestimating the impact of the Olympics both in terms of the logistics of running a business over the Games and demand for products is a mistake, and one made by ex-host cities such as Sydney, Beijing and Vancouver.

For those with businesses near Olympic venues, the Games will affect every area of their business, from organising deliveries to opening hours, staffing and even the range of products stocked.

A network of roads linking key venues and sites has been designated, deemed The Olympic Route Network and the Paralympic Route Network (ORN and PRN). These roads will be affected by temporary closures, which could affect a store’s deliveries, and parking restrictions could significantly reduce kerbside access. And with 20 million trips expected to be made on public transport, simply getting your staff to and from work may well be an issue.

Some events will cause more disruption than others. The cycle race and the Torch Relay in the run up to the Olympics will take in many more roads, potentially causing disruption all around the country.

In fact, it’s the retailers away from Olympic venues who may suffer most from apathy towards the great event and its run up. Far from being London-centric, London 2012 belies its name by sprawling into every corner of the British Isles, and there will be few retailers who won’t be feeling Olympic fever by the time the games themselves arrive. And to make the most of the opportunity, retailers need to start planning now.

According to Ian Brown, Adidas head of sales London 2012, the run up to the start of the Games is a fantastic opportunity for retailers to add sales. “London 2012 will be a unique experience for our nation, and the forecast is that sales of licensed merchandise will reach up to £1bn. It’s appropriate that c-stores get their fair share of this.”

Kraft trade communications manager Susan Nash agrees: “It’s the biggest event in our lifetime and many retailers don’t understand why it’s important to get involved this year and are waiting until next year to do anything. But there have been predictions of £1bn-£4bn retail sales to be made between September and December 2011.”

Nash estimates that by this time next year there will be 10,000 types of consumer products dedicated to the Olympics. P&G sports marketing & Olympics project director Nathan Homer says that the recent debate over tickets demonstrates a clear public interest: “Retailers can start using this excitement now to build sales.”

Coining it

Olympic fever is definitely under way among manufacturers licensed by The London Organising Committee of the Olympics and Paralympics Games to carry the official logo on merchandise. Innzone is one such company and has the licence for the Royal Mint London 2012 sports collection which, says managing director Phillip Glyn, will be a big winner in retail sales.

“Royal Mint has estimated it’s going to sell 10 million coins by the end of the Olympics and has already sold one million, so we’re going to see a huge upsurge,” Glyn says.

He believes that the convenience market is key to sales. The coins are currently stocked in 2,500 independents and distributed through wholesalers Menzies Distribution and Smiths News, however the company is also in talks with cash and carries including Parfetts.

Says Glyn: “The key element of consumer sales is collectability so we want to drive customers back in stores.” He says that retailers should be looking out for two types of customers those looking to buy the coin collection in one go, with an album and usually for a gift, and those buying a coin a week. They’d need six months at that rate to complete the collection, he says, so it’s important to get in early to maximise revenue. “The earlier you stock it the earlier you will start to make sales,” he says.

Products bought directly through Innzone have a buy-back guarantee on any unsold stock until October 2012: “It represents a risk-free opportunity to enter into areas retailers wouldn’t usually go into,” Glyn explains.

A different track

The great thing about an event such as the Olympics is that it provides an opportunity for retailers to branch out a little. Sportswear company Adidas is actively courting the c-store sector and is targeting the convenience sector with products which carry only the London 2012 logo. Ian Brown says that he’s been extremely optimistic about the response from the convenience channel, which represents a new step for the company. “I spent nine years in the FMCG world and so I understand the quality of these retailers. We recently attended the Nisa show and the response from members was nothing short of excellent. That gives me confidence that we’re producing an offer that works in convenience.” He says he expects that store owners will be able to purchase a ‘Retailer Pack’ of relevant merchandise that suits their shop format.