SBJ/May 22 - 28, 2006/This Weeks News

Rivals.com makes push into e-commerce

Rivals.com, flush with new traffic thanks to recent syndication deals with AOL and Yahoo!, is expanding into e-commerce in hopes of grabbing a share of the fragmented licensed college apparel market.

A redesigned storefront went live last week.
The site rivalsshop.com debuted late last year as a beta test, carrying fewer than 5,000 items and operating with no marketing infrastructure. The company, however, generated $500,000 in revenue in less than three months, fueled in part by the University of Texas’ football national championship, providing Rivals.com with enough comfort to convert the online shop into a full-fledged operation.

A redesigned storefront with the moniker RivalsFanShop.com went live last week. The shop site now carries 20,000 items with an aim to grow to 75,000 by mid-2007. The company projects nearly $2 million in e-commerce revenue this year and $6 million next year, a sum that would be about one-seventh of all Rivals.com revenue.

“We have an opportunity to be a major player in this space,” said Shannon Terry, Rivals.com chief executive. “Right now, there’s not that one major dominant player in merchandise for the college market, like you have in the major leagues. We want to be that entity.”

Much of the fractured nature of the market for licensed college merchandise stems from the large number of licensees: Individual schools often work with their own vendors rather than operating with a pro-style system in which a small number of manufacturers service an entire sport. More than 800 companies hold some type of college merchandise license, according to the Collegiate Licensing Co.

“The Internet has fueled quite a lot of growth in this market, serving to that displaced fan,” said Tim Hawks, CLC retail marketing manager. “Before, that fan wouldn’t buy anything, and now we’re seeing tons of repeat business because of that increased accessibility.”

That said, the foremost underpinning of Rivals.com’s new venture is its own growth in user traffic. The site drew a company-best 2.04 million unique visitors in April, according to Nielsen/
NetRatings figures, 47 percent higher than March and 81 percent higher than its draw in April 2005. Rivals.com signed content distribution deals with AOL in November and Yahoo! in April, moves that exposed the company to thousands of new fans.

Rivals.com’s average user stay last month of 48 minutes, 6 seconds, topped all sports sites, according to Nielsen/NetRatings.

Rivals.com developed the e-commerce site internally and, for now, also will handle its own fulfillment for the college market. The site also offers major league merchandise — an element that will remain a small part of the venture — with assistance from third-party fulfillment agencies.

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