How Soccer.com is capitalizing on U.S. soccer fever

0:04Hello, everyone, and welcome to the Modern Retail Podcast.

0:30retailers in the space. But what I really want to talk about for this is just there's definitely an increased interest in the U.S. Obviously, football soccer is huge globally, but it's become a pretty big phenomenon in the U.S. And I feel like he probably has some really good insights into what's been going on over the last few years. I know that Soccer.com has been around for quite a while, if I'm not mistaken, which he can go into the history of it. But I just want to hear, especially with Messi mania in Miami and all these different things that are going on, what he's seeing on the demand front, how that's changed, how the U.S.

1:02shopper and soccer fan is changing and growing, all of that jazz. But Mike, how are you doing? Kyle, I'm doing great. Thanks for having me on. I'm excited to have you here. So let's first start with you, set the table. Soccer.com, you guys have been around for a pretty long time. Am I wrong about that? No. So we started about 40 years ago as a catalog business called Eurosport. And the reason we went with Eurosport when we started the company was, you know, 40 years ago when you talked about soccer, everybody said, oh, that's a European sport. So we just sort of leaned into it. And then that was 1984.

1:36And then in 1994, on the first day you could register URLs, we registered Soccer.com and would fully transition from Eurosport to Soccer.com in 2006 around the World Cup. Got it. And so it started out as a catalog brand, turned into an online brand over decades, it sounds like. I always like getting into the weeds of, you know, decades ago going from analog to online. I feel like you have probably an interesting story to relate to that. So just talk about how that all happened. Starting the business, it was a high school project. So my brother and I, who's my partner, I went to a high school where you, in order to graduate, you had to take your avocation and make it your vocation or so take your hobby and make it your career.

2:23So you're basically writing a letter to yourself in 15 years. This is where I think I'm going to be. And we had an idea for a catalog because where we grew up in North Carolina, there just wasn't a lot of soccer gear that you could get easily. So we felt there were probably a lot of other guys like us out there and borrowed some money from our parents and launched the catalog. And so back then, it was a yearly catalog up until the late 80s. Then we went monthly. And so foundationally, when the internet came along, a lot of the catalog companies at the time were sort of the early adopters of the online shopping because we had warehousing, we had call centers, we had all sort of the infrastructure.

3:09So it was a pretty straightforward, although nothing is seamless, right? I mean, you're going from mailing millions of catalogs to, you know, reaching people digitally. But it was an exciting time for soccer in the United States. I mean, we started here with, you know, mentioning Mr. Messi, who has created, you know, quite the storm here and brought a lot of interest. I think any time you talk about goats in sports, it just naturally has people interested in that. So what Messi did for the MLS, certainly we're seeing in women's basketball. And, you know, we just saw the Olympics and we see that at the same time.

3:47So, but that wasn't always the case. You know, when we started the business, soccer was probably the lowest point in the United States. The professional league had collapsed. The U.S. hadn't qualified for a World Cup since the 50s. We wouldn't qualify until 1990 again. And it was a point where I think anybody getting into the sport would have been thought of as sort of fool's gold a little bit. There just was no opportunity. But I think for those of us that grew up on the game and believe that there would be an opportunity, it hit gold when the World Cup came in 1994. That was to put the U.S. on the map.

4:31And I think what we've seen since then has been sort of the meteoric rise of soccer from an interest perspective. And then when the world's greatest player comes to the United States, it gets a lot of attention. I will admit to you, I will watch soccer whenever it's in front of me and I try to keep up with it. But you know more than me, although I've been boning up for the last few days to try and impress you. Yes, I am impressed. Like I know that there's a very big game happening today specifically involving Tom Brady because he just bought his football club. We'll get into that later. Birmingham City.

5:02Yeah, exactly. But I was looking at trying to make a timeline essentially of like what are the points in which the cultural, I guess, profile of soccer has been raised in the US. You mentioned the 90s. with us hosting the World Cup. I feel like anytime the Olympics happen, like that instantly raises the profile. I would say Beckham very briefly coming here is another one. Can you just answer when you think like, and I imagine you see sales increase during these times, would I be wrong? Like, what do you think are the major milestones in terms of soccer hitting a mainstream stride in the US? No, I think massively, we've seen big points in time in the soccer timeline in the United States.

5:41So, you know, we're speaking about the men's game today, but, you know, the U.S. women began to have massive success early on, won the first Women's World Cup, would then defend that in 99 here in the United States. You know, we talk about Messi, but before Messi, there was Mia Hamm on the women's side. And, you know, she defined for a generation what it meant to be a successful player in the United States. And, you know, within the women's game, we've had tremendous amount of success. On the men's side, it came a little slower. But I think the collapse of the NASL in 84, the lack of success really sort of took the pressure off, I think, soccer in the United States at that point to just allow itself to get its legs underneath it.

6:36There was just a lot of people that thought, all right, this game will never be as good as the Europeans, as the South Americans. But when the World Cup came in 94, it really showed not only the ability to host major events, but the team was successful moving on to the second round, ultimately losing to Brazil. But within that, it captivated an audience, not only the kids that were playing, but others that, wait a second, there's an opportunity for this game to be successful. That would then launch MLS Major League Soccer in 96. And then we would see continual qualification for that team where a lot of the players became, you know, household names with Landon Donovan and Clint Dempsey.

7:26And, you know, some of the players that are playing now have benefited from, you know, the guys that came before that introduced the game, maybe to somebody like yourself, who at least had heard of the players when you're sitting down to watch a game. Mm-hmm. Yeah. No, you mentioned the women. Growing up, my sister was a huge soccer fan, and she was squarely in the Mia Hamm generation. Sure. And I'm trying to remember who else. Brandi Chastain, right? Yes. Oh, look at you. Yeah, well done. Yeah. I remember all of this very vividly. And so that was what I wanted to ask you is just, especially in those years when it was in the US, the women's stars were more prominent than the men.

8:06Was that mirrored in your sales? So did you have a lot of women who were buying Mia Hamm jerseys, for example? Or what has the demand been at least for the last 20-ish years up until pre-Messi, let's say? Well, I think on the boys' side, you find that they lean into, from a hero perspective, sort of representing that. You know, they go out and buy their Tom Brady, their LeBron James, their Lino Messi, you know, pick whoever their favorite player is. They're more apt to buy that jersey and wear it. Whereas the girls, when they're attending events, They love to wear their Mia Hamm. They're Alex Morgan.

8:44You know, as you mentioned, Brandy Chastain. But on the boys' side, as the game has grown, obviously interest in the individual players and the teams sort of is like a two or three to one as it relates. Now, from a participation perspective, there's just as many young girls as young boys playing the game. But when you look at it from a licensing perspective or a replica side of things, you know, Little boys are more apt to ask for it. You know, I think when you look around the holidays and birthdays, specific to the bigger players, that tends to be a market that's more male-dominated. However, I think what we did see is maybe not always reflected from a sales perspective, but from an interest side of things, those women players that had so much success inspired a generation of young girls to go out.

9:38And I think in many ways, you know, when it was a father-daughter relationship and they were looking for sort of parity in terms of interest, sport is the language that a lot of dads speak. And so the fact that their daughters became interested in sport, became interested in soccer, was a place where the dad really got involved. And I think you hear and when you go to the games, you see it's an opportunity for, you know, a dad to take his daughters and her friends to be a part of something really special. Absolutely. Can you talk about how you positioned the platform? Has it just been that you've always been squarely in soccer and you have the products that you think are necessary?

10:19Or how has your product assortment changed? And how have you sort of gotten the word out that people know that Soccer.com exists and you're with whatever the trends are that people want related to their soccer products? Of course, yeah. No, I mean, the benefit of Soccer.com in the early days before Google sort of dominated and the search engines were people would just type in soccer. And when you typed in soccer, you're going to get our homepage. And so from that perspective, early on, there was a real opportunity for people just not knowing where they were going, they would find a place to buy boots, bags, and balls, shirts, shorts, and socks.

10:54You know, a big part of what we do is align with the game globally. So, you know, we had a European championship. We had a Copa America recently where the national teams from North and South America and the national teams from Europe play in competition. So each of those teams has, you know, global stars. Cristiano Ronaldo would be for Portugal. And within that, he has a massive following. So for us, on these big events, we align ourselves around those important moments. But, you know, in August of every year, leagues start up. So, you know, the Premier League, La Liga, and the Bundesliga all kick off.

11:42And within that, You know, it's Manchester United or Juventus or Real Madrid. And we align around all the players, the new uniforms, the jerseys, shorts and socks that go along with that. And as the success of those teams rise, you know, people are watching that every day and on the weekends especially. But you get soccer every day now and they're searching for what those players are wearing, their heroes. and, you know, within that, our position having, you know, done this for 40 years and been online since 1994 puts us in a great position to organically show up, naturally show up as the place to get whatever you need on the soccer side of things.

12:31Clearly, you have a very advantageous spot organically because of your name. But like, you know, when there is an important competition going on or there's a league that's starting up. Do you have presence in the arenas? Are you showing up so that you're a part of it as well so people know about it? Or how does that play into it? So for years, you know, we were FIFA's online partner. So you can either buy it from Soccer.com or if you went to buy from the World Cup store, you know, you were buying it from us as well with FIFA. It was more of a white label. Same thing with UEFA. You know, this summer, there was about 40 professional games of teams traveling from Europe and Central and South America.

13:13And we did a lot of the event retail at Stadium. Some of that is Soccer.com and some of that is a white label where we're actually doing fulfillment. We're doing it on behalf of our partner at that point. So that partner could be Manchester City, that could be Celtic from Glasgow, could be Chelsea Football Club. It just depends on the game and the event space. And I imagine even with those partnerships and sort of quasi white label things, most of your sales still come from Soccer.com? Oh, yes. Yeah, yeah. No, of course. I mean, 95 % of the business comes online every day. And the business is divided up in two areas.

13:58One is a consumer business, which focuses on the individual player. And then we have a business that focuses on the youth player, but through clubs. So if the kids are affiliated with a local soccer organization or a club, we build partnerships with those large groups and supply everything that they would need. So, you know, some of our partners have 30 ,000 players aligned with them. And, you know, some of the smaller clubs may have a couple hundred. But from that side, we are meeting the player on the field, or if they're watching a game in their living room, we're meeting them there as well.

14:42Yeah, and that was actually my next question, which, you know, when I think of going to a website like yours, I would think I would be buying a jersey of my favorite player. but you sell balls, you sell cleats, you sell pretty much everything associated with soccer. So what makes up the most of your sales? Is it that sort of more B2B side or working with these clubs so that you're outfitting them? Or is it actually the demand for jerseys? From a pure dollars perspective, it's going to be footwear. Yeah. Yeah. Footwear is going to be the number one on that side, just because, you know, I think a lot of people say the only thing you really need to play the game is a ball.

15:17And that's definitely true. But the reality is, there's usually a pair of cleats, a pair of boots that go along with that. Then outside of that, the next thing would be the individual player jerseys. So don't think Messi or Ronaldo. Think your nephew, your niece, your kids playing on a team. That would be the next biggest thing that we sell. And we'll do that through Nike, Adidas, Puma, New Balance, as well as some specific brands that are just designed from a soccer perspective, as well as Under Armour, of course. Can you talk just about what you are seeing demand-wise in the U.S. now, especially with Messi's?

15:59Like, you're seeing more U.S. soccer clubs pop up and, like, just seems like they're getting a lot more volume than they were a few years ago. So, like, do you think we've reached, I don't know if the peak is the right, but has it reached its stride the way that you thought it would, especially on the men's side? Well, that's a great question. I mean, you mentioned David Beckham having his moment, and that was massive. I think it sort of captured lightning in a bottle in a way that had this amazing player who also had sort of a Hollywood appeal, a fashion appeal, was known not only for his looks, but his playing style.

16:35And when he came to play for the L.A. Galaxy, it was a moment in time that just showed the power of soccer in the United States. You fast forward about 17 years and we look at the Messi effect now, you know, going to Miami and coming off of winning the World Cup, being the Ballon d 'Or, the best player in the world. And his appeal is different than Beckham's in the sense that it's purely about what he's able to do with the ball. Certainly people would know him. But, you know, when you look at the impact that he's had, as well as other players that have come into the league, it is really going to the core of what we believe and understand, which is, you know, the people that love the game, love somebody with an immense talent.

17:29The highlight side of it is what it drives them. And that has sustained itself. I think that, you know, David Beckham did an amazing job of bringing a lot of interest and hype. But from a career perspective, he was really at the end of his career, whereas Messi is slowing down, but still has a World Cup, still won the Copa America this summer, still generates a tremendous amount of interest from what he's able to accomplish on the field. And I think all boats rise. I think your question is what the meaning of something like that is, certainly you're going to sell more Miami, more Argentina, have the products that he endorses for Adidas rise to the top.

18:18But at the same time, he just brings more interest into people watching games, and they're going to be exposed to the teams that he play against. And so when Messi goes on the road, when Miami travels, stadiums are full of people supporting their local team, but also there to see, you know, arguably one of the greatest players ever. And so that creates a retail moment everywhere that he is. And for a lot of people that maybe that'll be the first game they go to, they're going to walk away with some memorabilia, something to remember that day by. Divorcing the fact that you love soccer, and I know you do.

18:58But how important is it that the U.S. has those professional moments to the business when it seems like a lot of the business is predicated on footwear and children's jerseys, which kids are going to be playing soccer in the U.S. no matter what? So how much is this bolstering the business when you see this becoming more interest nationwide on the professional side? No, the professional side gives the ability to showcase all the new products. So footwear is a great example. when we launch a new style or a new colorway of a cleat, we're going to highlight where it's on field. I mean, we're going to make it very relevant to the player.

19:39And I think when you identify with a particular player or a particular shoe that they wear, it sort of defines you as the player. Are you a magician with the ball at your feet? Do you bend it like Beckham? So Beckham wore the Predator, and the Predator had the jet propulsion rubber on the side. And, you know, he would step up to take a free kick. And there was a lot of attention on those shoes. So we really take the opportunity for the game growing in the U.S. to utilize that as a marketing partnership in relation to getting the word out on what the latest technologies are. And certainly when you have players that have played in Europe that you're getting a game every couple weeks, whereas they've come to play at Major League Soccer and you're getting to see them play in every game, whatever brand they're associated with, whatever footwear they're wearing.

20:37It has a tremendous impact on that side. Same thing on balls, same thing on goalkeeping gloves. I mean, they're very visible when the players have them on. And has the way that you've marketed or just gotten the word out or like shown off these products changed, especially as it's become more widespread. So, you know, are you trying to, you know, have some sort of a partnership with a U.S. soccer star? Are you having more of a presence, you know, in major league soccer arenas? Like what's going on on that side? No, it's a great question. So when we were a catalog company, all the news that we were printing was weeks or months old by the time you saw it.

21:16Whereas today, a lot of what we spend our time on is creating engaging content where, you know, we're sitting down with the players, understanding their personalities, sharing a little behind the scenes. So yes, of course, there's product associated with it. But at the same time, I think when you identify with a player and you find them to be approachable in terms of what you like about yourself or what you like about your game or what you want your heroes to be like, we have a content team that goes out to games all over the world every week and are creating stories, again, not just about the product, but about moments of inspiration.

21:58So you can watch a game and you can be amazed by a goal or a save or something, but the opportunity to understand more about the players that you like is certainly a big, big part of it. So, you know, we have a big social media presence with, you know, millions and millions of followers. And, you know, we engage with them every day where they're looking for specific information or wouldn't it be great if, and I think you see trends, you know, on our TikTok or on our Instagram or on our Snap, which are very relevant culturally to what's happening in that sort of 14 to 24-year-old market. So a lot of, you know, playing games and word association and, you know, pitting players against each other from a more humorous lifestyle perspective is the ability to, again, connect and then give people an opportunity to understand, you know, that player that, of course, they're going to talk about their shoes, their gloves, their shin guards, their favorite teams.

23:09It plays very easily there. Are you finding that there's a specific social platform that you find the most ardent fans are? Like you mentioned TikTok and Instagram. Is TikTok great? Is it Instagram? Is it YouTube? What are you seeing on that front? It's all age-related. I think that we find that those that just want the sound bites, TikTok is amazing. Like it's very shareable. It's between class. It's when you have a moment, you can sit down and go through the reels. And it's all about entertainment. I think when we look at the YouTube, it tends to play a little bit older. It's a little more long format.

23:52People are looking for information. They're looking to go deeper into understanding how a product is made or enjoy sort of the long format. If you really love a particular athlete or a team, YouTube is a great spot to get as much information as you possibly can. Instagram sort of plays well in the middle. It's not as young as Snapchat and TikTok. Has sort of the real element to it, but it's very, very shareable. And because of the way that it's set up, I think what we find is if our content is relevant and interesting, it's shared well beyond just our customer base or the people that follow us.

24:40I mean, they're able to sort of put things out. And I think people talk all the time about this broke the internet or a massively viral moment. And it's true. I'll talk to the guys and I'll say, why was this so much better than something that had a lot more polish to it? And they're like, you never know. You never know. Right? Yeah. I actually wanted to ask that because when you are a soccer or a sports retailer, I should say, and especially when you have a social platform, it's all about those bite-sized moments, sharing an insane play that someone did or they hit something and it was crazy. And then it gets shared a million times, but does that necessarily directly translate to sales for you?

25:24Like when soccer.com posts something on TikTok that goes viral because so-and-so did a crazy play, how much does that help the flywheel of the business? Or is it just about making sure that you have that following and they know who you are and that inevitably will help the business continue to grow? Same answer as the earlier one. Sometimes yes, massively. Totally catches you off guard. You have no idea why. And other times where you think this should be straightforward, you know, the players are they're smart. They're they're wise. They have limited amount of resources. They're going to spend it where they think is most important.

26:01You know, recently, you know, there's been all this hype about, you know, the Gallagher brothers coming back and Oasis playing. You know, the dates just keep increasing, increasing. You know, from 12, you know, I don't know how many we're up to now, but it just keeps going. But Man City was releasing an Oasis inspired replica jersey. And, you know, again, wasn't necessarily designed to coincide with the announcement of definitely maybe, but it did. we would normally just sell that jersey as part of the man city and then boom it's it's everywhere and everybody's searching for it and everybody wants a piece of it and it's a you know short window you sell everything you can and you know you move on so yeah there's as much as i'd like to be able to say kail i could predict it and you know we would be the smartest ones there are moments that probably just from a lifestyle and interest perspective, extremely well.

27:04And I think you would expect Argentina winning the World Cup to drive a lot of interest, which it did. The benefit was, is there was one particular player that we've talked a lot about that continues to have these amazing moments. And every time he does, we see an increase in sales from both Argentina and from Miami. You actually brought something up I wanted to talk about with the Oasis Man City thing. How much do you or have you ever, I should say, tried to, I guess, manufacture a quote unquote drop? Because I feel like you see that a lot with other sports or with other sort of high profile players where there's a cultural moment happening.

27:46We only have a limited supply. We can participate in this, but there's a certain scarcity associated with that. Is that something that you have tried to do with Soccer.com with certain players or certain moments? Or does it just happen when there is not enough Man City jerseys to go around? No. I mean, I think that we look at key moments in a player's career. And, you know, maybe it's, you know, recently with Cristiano Ronaldo, 900 goals. Or with Messi, there would be a time where he will have had his thousandth game. And so you can see it on the schedule. You don't know the exact day it's going to happen, but you can build product around that and you know it's going to happen in a certain window.

28:27So you want to basically embrace it in a way that's meaningful. It used to be a lot around birthdays, around certain particular anniversaries, but there are so many other places you can share milestones. You know, and I think, you know, we recently had Alex Morgan's retirement game, which was broadcast on multiple networks. And, you know, that moment is going to happen. So you can really build around that in a meaningful way. Even if the planning for that was a month, not months, you tend to try to maximize that to bring as much interest value, hype, excitement, and where there's an opportunity for sales.