How to win the world cup with price and promotions
A major sporting event offers a fantastic opportunity for manufacturers and retailers to take advantage of an increase in Television viewing and general spending amongst fans. No other event offers a greater opportunity than the FIFA football world cup.
The ‘World Cup’ effect
With the tournament kicking off in Russia this month, May and June represent crucial months for sales in the UK TV market. Our forecast is that 814,000 TV’s will be sold in the UK over these two months - an increase of over 20% against the same period in 2017. To win the lion’s share of this opportunity, TV manufacturers and retailers are focusing hard on competitive pricing and promotional activity to entice shoppers.
‘Bigger and better’ line-up to combat falling unit sales
World Cup themed promotions are very evident online, with a large number of major retailers pushing promotions and football themed messaging on both category and product web pages.
In addition, many are focusing on premium ranges, with promotions of larger screen sizes (55+ inches) and the latest high-resolution technologies (4K/UHD), to bring the stadium atmosphere in to the living room. In a market that has been showing a steady decline in the number of units sold over the last years, this strategic focus on promoting higher-end products can deliver increased margin levels and profitability.
Throughout May 2018, the average selling price (ASP) of a 55 inch 4K/UHD TV was over £1000. Although this is still a significant outlay for the consumer, it is 23% lower compared to last year. We have also seen similar ASP decreases with other screen sizes, such as the 43-49 inch category, which is, on average, 15% cheaper in May this year than a year ago.
So overall, we are seeing a market focus on promoting higher specification units at a price that makes them a more affordable proposition for customers looking for an upgrade.
Online specialist retailers leading the promotions field
On the day of writing, the average TV retailer has 54% of its range on promotion. Within that, the online specialist retailers are showing the largest offers for UK shoppers, with e-tailers, on average, offering promotional cuts of 21%, whereas major high street retailers are offering 11%.
Discounts on larger screen TVs and the latest display technologies look set to bring the World Cup experience closer to home for UK football fans – but will more TV sales move online this month? And will World Cup promotions help to drive growth of over 20% against last year? Watch this space for our next update.
To find out more, please contact Barry Meacher at Barry.Meacher(at)gfk.com or Daniel Wellman at Daniel.Wellman(at)gfk.com
Source: GfK Online Pricing Intelligence (OPI) - May - June 2017 and 2018 and GfK’s ‘The World Cup & TV sales - What's the real impact?’