Inside the Bag
First Published in SportBusiness
Sports e-commerce specialist Kitbag works with most of football’s major brands. But new sports and new approaches to selling sportswear and merchandise are seeing the company diversify. Matt Cutler spoke to CEO Andy Anson.
Tim Berners-Lee, the computer scientist credited with creating the internet, said he hoped the medium would primarily be used to “cross barriers and connect cultures”.
In sport, the internet has played an integral role in how sports teams communicate with their global fanbases, often on a 24/7 basis and in their own languages. News, results, highlights, interviews, fan clubs, tickets, stadium tours, merchandise – all can be accessed and bought on one website by a fan, wherever they are in the world, in an instant.
But being able to fully monetise the opportunities presented by such an online global fanbase has been a challenge for every major sports organisation in the last two decades, and no more so than in the way official merchandise is sold.
Regardless of the trade that exists for fake and poor quality replica shits, there is a huge hunger, particularly in football, for fans across the world to get their hands on official club gear.
However, setting up the operation to be able to do that – ensuring a Manchester United fan in China, for example, can get his or her hands on a brand new shirt and official mug securely and for the same price as other fans – is a challenge, both in terms of time and investment.
It is in this space that Manchester-based Kitbag has grown a significant business. Now under the leadership of Andy Anson, the former commercial director for Manchester United and the man who led England’s ultimately unsuccessful bid to host the 2018 FIFA World Cup, the company has long-term partnerships with a number of the world’s biggest football clubs to handle online club shops and merchandise distribution on their behalf.
“One thing [sports organisations] find hard is the internationalisation,” Anson told SportBusiness International. “We have a call centre where people can speak Korean, Japanese and numerous other languages on behalf of our various partners.
That’s hard to do for a single sports organisation. But because we do it on behalf of many, it’s an easier investment to make.
“We also have a warehouse with 42,000 different products in it. A big football club will have around 1,000 different individual products, so someone like Manchester United will have their playing shirt, training kit, boots, keyrings, water bottles, United-branded t-shirts that aren’t Nike-branded…a huge product range that we hold in a 500,000-square-feet warehouse in Manchester. We ship from there to all around the world.”
Having established a reputation working in football, Kitbag is focusing business development on new sports and, in certain cases, moving outside its e-commerce comfort zone. Business development is handled by Anson himself, in addition to former lawyer Danny Downs, who moved into a position previously held by commercial director Ed Boardman.
“In this market, people usually either do it in-house or they come to us – we are quite lucky. It’s hard in football because we have a lot of the best clubs already signed up,” says Anson.
With every product Kitbag sells for a partner, it pays a royalty calculated as a percentage of the sale. That percentage varies from deal to deal, with the bigger football clubs tending to be a bit more aggressive in their deal-making than other sports organisations – meaning the percentage is higher – but ultimately, Anson says, Kitbag targets a net seven per cent return across the business.
“We work with Manchester United, Manchester City, Chelsea, Real Madrid, Barcelona, Borussia Dortmund, Olympic Marseille…clearly the biggest club in Germany is Bayern Munich, which does it in-house successfully, and there are three big Italian clubs we are talking to at the moment. But there’s only so many big football clubs, and we are looking at areas to expand.
“Since I joined, we’ve also looked to the big American sports and signed the NFL (National Football League), NBA (National Basketball Association) and NHL (National Hockey League) – there’s only the MLB (Major League Baseball) left to do and we are talking to them.”
Motor sport is also an area being targeted and in July Kitbag signed a deal with Formula One team McLaren, founded in 1963 by New Zealander Bruce McLaren and the third most successful team in the sport’s history behind Ferrari and Williams.
Under the agreement Kitbag operates the Formula One team’s online store and sells McLaren merchandise at grands prix and other motor sport-related events. It came about through an existing relationship Kitbag had running the online store for Formula One Management.
“McLaren is an incredible brand, which is very strong in the UK, but it couldn’t internationalise,” says Anson. “Its commercial team was looking to do something different with its e-commerce, but doing sites in Mandarin, Korean, Japanese, Arabic…it’s quite a big challenge.”