the olympic museum shop

THE OLYMPIC MUSEUM SHOP CASE STUDY

Authors: Prof. Lluís Martínez-Ribes (ESADE, Barcelona, SPAIN) and Dr. María Dolores De Juan Vigaray (Universidad de Alicante, SPAIN

Marketing Department Faculty of Business and Economics University of Alicante, 99 E-03080 Alicante (Spain) Phone: +00 34 96590 34 00 ext. 3167 Fax: +00 34 96590 36 11

Contact: ALICANTE: [email protected]

Dr. María Dolores De Juan Vigaray

CITE AS: Martínez-Ribes, Ll. and De Juan Vigaray, M.D. 1999 Case: “The Olympic Museum Shop”. “European Cases in Retailing”; Ed. Dupuis, and Dawson, J.pp. 263-272, Blackwell, Business, Londres.

The Olympic Musem Shop. Page 1

THE OLYMPIC MUSEUM SHOP Abstract The case of “The Olympic Museum Shop” demonstrates how this business operates, but as of yet the marketing department has not made any definitive decisions relating to the marketing strategies. Therefore it is an open ended case.

In this case we will be able to analyze all the necessary information in order to obtain two objectives. The first is to gain an understanding of the shop´s present marketing situation and the second objective is related to the design of alternative strategies in order to improve the shop´s profitability. Our philosophy is to treat “The Olympic Museum Shop” as a selling machine. That is, making profit is the main goal, but always keeping in mind the importance of communicating the Olympic values and ideals, which is the theme of the shop.

Considering the above mentioned objectives, it will be possible to implement various plans based on repositioning as well as on merchandising techniques and a better retailing mix management.

Key terms Retail marketing, Museum shop, Positioning, Merchandising, Retailing mix, Olympic Museum, Shop´s Design and Layout.


THE OLYMPIC MUSEUM SHOP

1

Background On the 23 rd of June 1993, the dream of Mr. Juan Antonio Samaranch, President of the International Olympic Committee (IOC), came true when “The Olympic Museum” opened its doors to the public. The goal of the museum was to be something more than just a building containing olympic memorabilia. It had to be a place where the visitor could immerse him or herself in the olympic atmosphere. That goal has been achieved.

“The Olympic Museum”, is located in the heart of Lausanne (Switzerland), next to Lake Lema. The building, of contemporary architecture, is surrounded by wonderful gardens which are complemented with many inspiring statues. This combination of elements provides the visitor with an atmosphere of serenity but at the same time is very stimulating.

Museum Interior The museum takes one travelling through the history of the Olympics, all the way back to ancient Olympic Greece, whose values are as much alive today as the first day. This philosophy has been summarized by Père Henri Dion, friend of Pierre de Coubertin in this quotation.: “In order to discover the best of oneself, one must set a goal higher than ever thought possible. Altius, citius, fortius”.

The visitor encounters room after room of sporting memorabilia. There are the champions´ awards -among these are the laureal wreathes-, the interactive information points, objects from the both the Summer and Winter Olympic Games, the collection of Olympic stamps and coins, the Olympic videos and other miscellaneous items. In 1995, this modern

1 This case has been writen with one main purpose: to provide material and data to be used for discussion in academic retail marketing courses. The case does not presume to show the best way to run a business, but rather to present information that could be useful to students and teachers alike. We would like to express our gratitude to all the people at the Lausanne Olympic Museum for their colaboration and support for our project. © This case has been copyrighted. No unauthorized usage of it is allowed.


and dynamic museum was given the European Museum of the Year Award. This proves the public´s acknowledgment of the museum´s world class status.

As with most major museums, shops with souvenirs are part of the visit. “The Olympic Museum” is no exception and included in the building´s design was space for a museum shop where the visitor could browse through the shop´s items. We all know that when we experience something very pleasurable, we like to bring something back home that will later remind us of that experience.

Development of the Shop Keeping this in mind, the museum´s Directors realized inmediatly that their know how did not include the issues relating to selling and the direction of a retail shop. Therefore, in order to fill the 130 square metres of selling space, they made contracts with some very well known sporting goods companies of Lausanne to manage the shop. Between the IOC and the local partners the duties were divided: the search for products, the wholesale purchasing, the recruiting and training of salespeople, the book keeping, the stock management, and sales management, etc.

Very soon a collection of products relating to the Olympics was developed. These products were organized in six departments: 1. gadgets, pins, watches and alike

4. games, puzzles and candies

2. clothes and accesories

5. posters

3. stationery

6. stamps and coins

From the very begining it was clear that a specific computer program would be needed to manage the shop´s retail operations (total sales, unit sales, total promotion sales, unit promotion sales, value of the inventory, costs, selling prices, gross sales, net sales, profit margins, etc.) not only for all the items as a whole but also for each specific item. Because of this, each item is coded and can be easily identified. This system of tracking the inventory and cost control allows for the constant monitoring of the facts and figures of the business.

Shop´s Customer Base The Olympic Musem Shop. Page 4

After a period of preparation, the shop opened to the public with an entrance price of 14 FS, and started to fullfill its customers wishes of taking back home a souvenir of the visit to the museum. The types of people that visit the museum could be classified in the following categories:  Sports enthusiasts  Tourist coming from post or pre Olympic sites.  Students from the surrounding area (isochronics of three hours by car or bus).  Adults that come with organized daily tours.  Lausanne residents.

However, the latter group due to its proximity tends to visit the museum more frequently and usually uses it as a shop to buy gifts. They are the minority of all the visitors. For the other type of visitors, given that many of them live far from the museum, repeated visits are unlikely. The adults that come individually, compose the segment with the highest buying power, and it is estimated that they are 76% of the visitors. The rest are divided as such: 11% are groups of students, and the remaing 13% are senior citizens and children. In general, most of the visitors come in the summer (13% of the annual visitors come in July, making this the busiest month).

The number of the visitors to the museum for the last three years has been the following:  In 1993 (six months)

108.838

 In 1994

200,005 (it was the 9th most visited museum in Switzerland)

 In 1995 (until 10-12-95)

158,219 (the goal for 1995 was to reach 215.000)

Shop´s Expansion In the middle of 1995, it was decided to expand the selling area by 40 square metres. With this expansion, the marketing director of “The Olympic Museum” realised the need for a European expert on retailing that could give a professional opinion about the shop´s operations.


As the visitors of the museum increased so did the sales, but the figures prevented them from being very optimistic. Up until the middle of 1995 the shop´s average sale per customer (person that visits the museum and buys in the shop) was only 45 FS, and the shop´s average sale per visitor of the museum (person who visits the museum without purchasing) was only 5,9 FS (from 6-23-94 to 10-3-95). In the last quarter of 1995 the average sale per visitor increased slightly to 9 FS on week days and 8 FS on the weekends.

As an additional reference in 1990 the average sale per visitor of the Tower of London´s shop was 1£ . Taking into account the type of customers that visited “The Olympic Museum”, their buying power and their enthusiasm for the Olympics, the average sale per visitor should have been higher.

After visiting “The Olympic Museum”, the newly hired retailing expert was as equally impressed as the majority of the visitors. He entered the shop, observed the environment carefully for a long period of time, payed close attention to the buying behaviour of the customers, and finally decided to interview the customers as they exited the shop.

The conclusions from the interviews of the customers and visitors plus the quantitative results of a previous survey conducted a few months earlier were the following:  The general impression of “The Olympic Museum” was very favorable (76%).  42% of the visitors decided to go to the museum because of the recommendation of family or friends.  82% stated that the interactive computer terminals were easy to use.  76 % would like to return to the museum.  The shop´s merchandise was generally perceived as that of quality.  The products were seen as those of very good taste.  The maintenance and organization of the shop was considered very good.  The most common complaint was that the prices of the merchandise were too high.  There was a lack of merchandise at a medium price range.  There was practically nothing for children.  There was a great variety of clothes, but on the other hand the shop was lacking other exclusive products.  There was no merchandise on sale nor promotional items.


 One visitor said he would like the shop to be more fun and have more personality.

Shop´s Merchandise Base The assortment of products in the shop is organized in six different departments. Their percentages are measured in shelf space contribution, sales in unit, sales in volume and contribution margins and are shown in the following table:

% Shelf space

% Sales in Unit

contribution Gadgets,

% Sales in

% contribution

volume

margin

pins, 7,90

26,70

35,95

30,67

accessories

56,33

16,08

43,39

49,18

Stationery

29,76

45,30

16,01

14,47

and candies

3,39

1,12

1,88

1,90

Posters

1,49

0,01

0,84

0,84

Stamps and Coins

1,14

10,78

1,93

2,94

watches Clothes

Games,

puzzles

There are twelve categories of products that make up 90 % of the shop´s sales in SKU (stock keeping unit, the smallest unit available for keeping inventory control):

1. Postcards (33 %)

7. Watches (4 %)

2. Stamps (11 %)

8. Pins and insignias (3 %)

3. T-shirts (10,5 %)

9. Posters (3 %)

4. Keyrings and alike (7 %)

10. Caps (2 %)

5. Books (6 %)

11. Sweat-shirts; pullovers (1 %)

6. Pens and pencils (6 %)

12. Umbrellas (1 %)

The current situation for these twelve categories is shown in the following table:


% Shelf space

%sales in

% sales in

% Contribution

contribution

units

value

margin

Pins and insignias

0,68

3,49

2,99

3,15

Watches

1,81

4,36

21,35

15,70

Keyrings and alike

0,45

7,18

4,19

3,84

Pens and pencils

0,14

5,79

1,56

1,47

Umbrellas

0,23

0,67

1,85

2,30

T-shirts, polos

22,57

10,48

19,50

22,73

Sweat-shirts; pullovers

5,42

1,33

7,46

8,30

Caps

1,81

1,69

3,19

3,75

Postcards

9,21

32,85

1,74

1,68

Posters

1,35

3,07

3,40

3,94

Books

15,80

5,84

7,30

6,55

Stamps

1,13

10,72

1,33

1,88

TOTAL

60,60

87,47

75,86

75,29

Here are some examples of prices in the shop:  The average price per miscellaneous gadget is marked at 23 FS, but we must consider that the most commonly sold gadgets have a psychological threshold of 10 FS. The average prices of the merchandise in this department are the following: 3,5 FS for the pins, 10 FS for the keyrings, 5 FS for the pens and pencils, 84 FS for the watches (Swatch watches 100 FS), and umbrellas at 48 FS.  As far as clothing is concerned, the average price is 32 FS for T-shirts, 96 FS for the sweat-shirts, and 32 FS for the caps. The “star products” are the T-shirts.

Shop´s Design and Layout The musem´s shop interior design and layout reflects the trends of most European clothing shops from the early 1990´s. The displays and fixtures are basically modular with two types of materials predominating: cromed metal and glass. They can be converted into freestanding units which can create isles, small square islands, as well as shelves along the wall. These units can have a maximum height of 120 cm. The shop has 130 square metres distributed aproximately in the following floor plan:


Photo

Register

Posters

Clothes Entrance from the Hall

Pins, Keyrings Pens

Watches, knives, mugs Accesories Agendas

Clothes Clothes

Clothes

Postcards Mascotts

Clothes

Clothes

Books

Jewelry, stamps

Shop´s floor plan

The shop has a dark marble floor and a ceiling made from different materials depending on the area. One can find a false square cell ceiling where halogen spot lights are hidden or other metalic materials with the light fixtures visible

(see partial current shop´s

layout picture at the end of the case). Hence, the lighting is warm and very bright clearly exceding 700 lux measuring the light one metre from the floor. At the same time, the light comes from various sources with the fixtures focused in different angles iluminating the areas unevenly.

The presentation of the merchandise is that of the fashion boutiques, with its garments carefully hung on the fixtures, leaving plenty of space among the merchandise. The facings are not repeated even when the product is too small, and the price and product´s characteristics are not shown in the shelf space (this data is reserved for the product´s tag which is stuck to the product or is hung on the label).

The system for arranging the products is not very clear to the visitor. For instance, Tshirts may be displayed in several different areas of the shop. They can form a part of an Olympic theme, some in the winter section others in the summer section, and may even be grouped with T-shirts of a specific supplier.

In general, the sizes are arranged as such; The Olympic Musem Shop. Page 3

larger sizes on the bottom rack and the smaller sizes on the top. However, there are no signs or graphics to indicate this. The agendas, posters, and postcards have their own displays which are positioned so that the customers can easily see them. There are some merchandise like articles for the home and miscellaneous gadgets that are hung low close to the floor. This makes the most of the space available for displays.

Outside the shop there is a mailbox for people to send correspondance. Next to this are two mannequins dressed elegantely with clothes that have “The Olympic Museum” logo on them, and are also equiped with accesories such as purses and caps. The prices are not displayed on this merchadise.

The counter for the cash register is white and has a hight of 120 cm. It is located directly in front of the shop´s entrance and is the first thing that the visitor sees upon entering. There is also a multitude of gadgets displayed on the counter.

Because the shop has practically no graphics or signs to distinguish different sections, the customer is forced to wander through the shop facilitating impulsive purchases. Therefore, the type of sales practiced here can be classified as assisted sales. The visitors are free to circulate through the shop having access to the majority of the merchandise. All the merchandise, as mentioned above, has tags indicating the price and internal shop codes.

For example, when the visitor is interested in a T-shirt, he or she can choose the colour and grab the garment from the rack or the shelf. Then, he or she can look at the tag, size, material and technical characteristics. If this is the desired purchase, the customer can take it to the register to pay, but if it is not the right one the customer can continue looking or ask for assistance. There are several friendly salespeople to help the customers. They speak various languages, taking into account that the customers come from five different continents.

The gross margin for the shop´s products is 50 % or more, and from now on the sales space will be 166 square metres, in the following shape:


FUTURE SELLING SPACE OF THE OLYMPIC MUSEUM SHOP

ENTRANCE 15 m. Museum´s Hall

15 m.

Selling Space 166 sq.m

In conclusion, the possibility to increase the sales space of the shop by 40 square metres is more than just a simple expansion of sales space. The plan is to use this sales space as an opportunity to move in a new and different direction to improve the shop´s productivity and personality as supposed to using the space as just as simple expansion of the same.

Finally, the Directors of “The Olympic Museum” would like to know how to increase the average sales per visitor of the museum, since the museum´s shop should be an important source of income for it.
