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Merchandising

Can the Royals and Sports Boost U.K. Retailers?

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The coming months look set to produce a summer of fun in the U.K., where the Queen’s Diamond Jubilee kicked off the festivities. British consumers will be looking forward to numerous events this summer as a time of celebration to offset the gloomy year so far, due to prolonged miserable weather and continued economic downturn.

The Royal effect The Diamond Jubilee saw consumers taking advantage of the celebrations with street parties across the U.K. Jubilee-themed crockery and bunting, typical British food and drink and assorted memorabilia were bestsellers. Marmite released a novelty edition of its product, dubbed Ma’amite, and British pottery company Wedgwood released a new Diamond Jubilee range. Harrods played “God Save the Queen” at noon daily in the two weeks running up to the event and replaced its iconic green canopies with Union Jack flags, further cementing the store’s status as a destination. With many retailers adding the iconic flag to products for the events, however, innovative items and promotions will be needed if local consumers are to avoid falling victim to “Union Jack fatigue” by the end of the summer.

London 2012 While many are dubious about whether the economic impact of Summer Olympics will be felt outside London, the bearing of the Olympic Torch and the large outdoor TV screens around the country should help spark interest throughout the U.K. before the event starts. It is likely that the Olympics will not increase overall U.K. tourist numbers, because those visiting for the Olympics will likely displace the “usual” tourists. Adding to this is the possibility that U.K. consumers may remain at home to watch the Olympics rather than venture out to shop. By reiterating the option to shop online and collect in stores, retailers can take advantage of the Games by providing convenience to consumers. This will be a vital strategy during this period and could provide the opportunity to increase basket size. London-based retailers, especially those offering perishable goods online, will need to have additional strategies in place in case any delivery problems arise. Many U.K. retailers are combining all the events to have one tourist-attracting campaign for the entire summer. This especially will be the case for those with extravagant windows: Selfridges celebrated “the best of British” through its window displays of typically British pursuits, highlighting British products to create customer interest. Manufacturers can take advantage of retailers focusing on the whole summer by adapting packaging and brand characters to the individual events — particularly for the Olympics, where retailers are restricted in the designs they can use due to licensing agreements for the official logo and mascots.

International impact While the majority of the Olympic uplift will be seen in the U.K., it will not be limited to the host country as international retailers are using the Olympic Games and Euro 2012 soccer championship to their advantage. McDonald’s is introducing an Olympics-themed menu in Australia on which items are named for past Olympic host cities — including the Sydney Stack Burger and Paris Chocolate Delight. Meanwhile, Lidl has launched its own online portal for Euro 2012, where users can get team information, predict results, play games and win prizes. The benefits of the summer will mainly be felt in London, where the majority of the events are taking place, but there are opportunities for retailers across the U.K. and globally to profit, both in stores and online. Still, it seems likely that, given the tough consumer environment, any sales uplift from these events will result in reduced spending throughout autumn until Christmas.

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