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Hockey
Q3 2017

The price of hockey’s success:

An overtraded market

The vast popularity of hockey, especially at school, has created a perplexing dilemma for established brands and the retailers they have always faithfully supported: there is a huge influx of new suppliers who have watched the growth ... and realised the potential of this market. But, a retailer only has so much shelf space, while the direct-to-consumer option beckons, oh, so temptingly, TRUDI DU TOIT found

There are more than a dozen recognised hockey brands, and about double the number unrecognised brands, vying to get a bigger foothold in the lucrative South African hockey market.

It is a difficult task for brands to gain shelf space, as most retailers — except a few hockey specialists — stock the top three brands, plus one or two others. Which leaves the majority of the brands out in the cold.

About half of the recognised brands in the market show their commitment to the retail industry by marketing their equipment mainly to the trade.

But, many others speak directly via consumer and social media, and sell at tournaments and through clubs to reach the end user: the players and schools.

Some manufacturers don’t even have a local distributor. They fly in to sell a few bags full of sticks, and fly out when that had been accomplished. Just to return a few months later.

Thou shall NOT sell directly!

In the Sports Trader survey (results published in Q1 2017 issue) of how retailers and suppliers view their respective roles, 84% of the retail respondents said that brand distributors may NOT sell directly to consumers; 63% retailers said distributors may NOT sell to coaches and 58% said that distributors may NOT sell to consumers at events.

Only 5% of retailers said that distributors may sell directly to consumers if retailers refuse to stock their brand.

It was therefore a pretty decisive vote from retailers against suppliers selling to consumers.

Yet, now many of these brands are being rewarded by retailers who offer them shelf space — at the cost of loyal brands. The reasoning: if we offer them shelf space, they will be less inclined to sell directly to consumers, and therefore offer less competition to us.

This does not go down well with retail-loyal brands, several have told Sports Trader. It also creates a dilemma: do they show retailers how much consumer support they have by direct-to-consumer sales, or do they continue to support the retailers who reduce their shelf space to accommodate other brands that used to sell directly to consumers?

This is a global problem, says Rassie Pieterse, whose position as GM of TK Sports gives him insight into markets worldwide. Sports Trader tracked him down at the Inter-provincial Tournament in Randburg, where he captained hosts Southern Gauteng, in-between captaining last year’s HPL winners, the Cavemen, as well as the national hockey team. Add to that his role as local distributor of TK hockey, and it is clear that he has a comprehensive understanding of what is happening in hockey.

Despite the excellent growth in hockey participation, establishing brands are facing the problem that many retailers are reducing their stock of top end sticks, says Pieterse.

When a retailer reduces shelf space of an established brand to accommodate two or three sticks from a smaller brand, he is most inclined to discard the top end sticks.This is not good for a sport where so much is being done to try and raise the performance level of players.

Top end sticks = higher profit

Sometimes these decisions are made without understanding that if a retailer has the appropriate knowledge, he will be able to sell many more top end sticks with higher margins, Pieterse adds.

A knowledgeable retailer can explain to a customer why, for example, his game will benefit from using a 24K carbon stick instead of 8K — and the consumer will therefore understand that the R5 000 cost will be worth it.

Also, by encouraging brands to sell from car boots or tournaments, the players are deprived from receiving knowledgeable advice or after sale service, say other distributors.

The established brands, on the other hand, do product knowledge training and provide back-up for the retailers they supply. This ultimately benefits the whole hockey market.

A retailer who understands the new technologies introduced by brands, can make sure that a player enjoys the game more, because the stick he buys suits his playing style — and he will be more inclined to play for many years.

Donating profits

Sponsorship of schools or billboards at tournaments are also popular ways of introducing an unknown brand ... but not always profitable.

For example, how many sticks do you have to sell to show profit after paying R8 000 for a billboard? suppliers ask.

Or, when do you expect that members of the school teams you sponsor with sticks will start paying for their own sticks ... or will they merely switch allegiance to the next sponsor?


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