One reason why the remaining Olympic tickets are proving so difficult to shift could be attributed to the complete absence of a clear sales message.
Fresh tickets, drawn from some vast contingent or reserve pool, appear to go on sale every week, yet still more than a million remain unsold.
Prospective buyers know there’ll always be another chance to buy. This does not apply across the board, of course. Seats for the Games’ Blue Riband event are scarcer than a funny Jimmy Carr gag.
By Wednesday lunchtime, one well-known travel company had just three corporate ‘deluxe’ packages available which include category A seats for three Olympic finals plus the men’s 100 metres final on August 5, together with a night at the Waldorf Hilton. The package will set you back £3,699.
Traditionally, either the men’s 100m or 1,500m finals have contested the ‘most sought-after’ Olympic moniker, but this year, thanks to one man, there is no doubt which event will attract a global TV audience of up to three billion.
City analysts estimate that if, as expected, Usain Bolt wins the sprint, his performance could initiate a €1 billion (£833 million) surge in sales at Puma, the footwear company which sponsors the Jamaican team.
Francois-Henri Pinault, chief executive of Paris-based PPR, the company which owns Puma, gleefully recalls the moment Bolt clinched the 100m Olympic title in Beijing four years ago.
“Usain took his shoes off and he ran around the track holding them up. And three billion people saw that on the television!”
The sprinter’s reaction to victory had M. Pinault, son of the founder of PPR, bouncing up and down on his living room sofa: “It was amazing,” he recalls. “I was thinking, ‘one more; do one more lap of the track’.”
The value of a global sporting superstar holding aloft a couple of pieces of kit that have helped him win such an important race is inestimable, hence Bolt plays a pivotal role in Puma’s strategy to increase its annual sales from €3 billion to €4 billion by 2015.
But Puma’s sales strategy is not wholly reliant upon the Jamaican tornado. Mindful that he will eventually retire, Puma are grooming a number of other young sporting stars across the world, including Indian cricketer Sourav Ganguly and 17-year-old female golfer ‘Lexi’ Thompson, who will be ready to take over from Bolt when he ultimately hangs up those valuable running shoes.
Yet Puma could do with him hanging around for a little while. Although PPR group earnings are scheduled to rise from last year’s €12.2 billion to €13.5 billion this time and €14.4 billion in 2013, much of this growth is attributable to sales in three specific businesses (France’s Conforama and FNAC, plus Redcats in the US), plus a relatively buoyant luxury goods market.
The company also owns the Gucci, Stella McCartney and Yves St Laurent brands and it’s not difficult to happen upon analysts who feel as though Puma falls between two stools. It’s too small to compete with Adidas and Nike, yet it’s a million miles from being considered a luxury brand.
Last week, figures revealed the extent to which it now trails Adidas and Nike following comparatively disappointing first quarter results. Though Puma reported a 6% hike in sales, Nike’s revenues rocketed by 15% in the quarter to the end of February, while Adidas reported a 14% rise over the same period.
One of Puma’s ‘structural’ problems is its inability to attract customers in the USA and China, which between them account for almost half of the global sportswear market, ostensibly because the brand is less readily associated with the world’s most popular sports. This problem is only likely to compound itself for while Puma boasts annual sales of $3.8 billion, Adidas annual sales exceed $17 billion, while Nike turns over more than $21 billion.
The respective marketing clout of this sportswear trio is evident at Euro 2012 where Adidas have supplier deals with six countries, including Spain and Germany, while Nike are kitting out five nations. Puma’s logo, meanwhile, appears on just two nations’ shirts – Italy and the Czech Republic.
Though the Puma brand appears caught between two stools, M. Pinault suspects that exposure at the London Olympics will help it transform itself from a pure ‘sports play’ into a global ‘lifestyle’ brand.
“Being at the Olympics, being seen in the eyes of billions of people, no other brand can afford that apart from sportswear brands. It’s a huge advantage for a lifestyle brand to be seen by three billion people and it enhances the visibility and legitimacy of the brand,” he says.
However, under the company’s previous chief executive, Jochen Zeitz, Puma did concentrate on positioning itself as a fashion brand. The new boss, Franz Koch, wants it to become as well known for its involvement with sport as with fashion. Accordingly, Puma has brought in teams of new designers and funded the production of lightweight materials in an attempt to appeal to another niche market, the older runner.
Having successfully carved out niche markets in sports such as athletics, motor racing and sailing, the global trend for people between the age of 35-60 to tackle marathons and half marathons has persuaded Puma that this too is an area where it could enjoy commercial success.
Focusing on this sector, the company’s 17-strong team known as the ‘footwear innovation group’ is responsible for creating the new, lightweight ‘cross-sport’ Evospeed range, replete with Puma’s Evofoam cushioning and ‘anatomically engineered’ outer soles. The running shoes went on sale last week supported by an advertising campaign fronted by Bolt.
Should Bolt win Olympic gold in London, he’s likely to be kept busy over the next couple of years as Puma plan to maximise the return on their investment in him by launching a series of innovative sportswear. In the meantime, Francois-Henri Pinault should ensure the springs in his sofa are up to the punishment they’re likely to take.