Falcons, Broncos score despite different tactics

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It was november, and the Atlanta Falcons' online store had only been open a few weeks. But Greg Beadles already knew he had created a monster.

He had set up a small area on the Falcons' site in October to unload merchandise from a retail store in a hotel that was owned by the team and had recently shut down. He didn't expect much.

The Falcons were 7-9 during the 1997-98 season and usually ranked "down towards the bottom of the list" in NFL team merchandise sales, Mr. Beadles said. No one thought twice about letting him--a 30-year-old senior accountant for the team--open the store.

He chose Yahoo! Store because it looked easy to manage. He took digital photos of the merchandise and uploaded them to the Yahoo! Store server.

1-MAN E-COMMERCE MACHINE

Then something unexpected happened. The Falcons started winning. And winning. And winning, culminating in the team's first-ever trip to the Super Bowl. And Mr. Beadles suddenly became a one-man e-commerce machine.

He answered up to 200 e-mail messages a day from store visitors. He placated hundreds of shoppers who wanted to buy authentic Falcons jerseys that his supplier couldn't produce fast enough. And in four months he sold twice as much merchandise online as the retail store sold the entire previous year.

On the other side of the country, the Denver Broncos were gearing up for what everyone expected would be another winning season. Steve Harbula, the team's marketing services specialist, wanted to find a new way to sell team merchandise to fans outside Colorado.

In October he contracted with ProTeam.com, a Secaucus, N.J., provider of direct marketing services to pro sports leagues. ProTeam.com set up and managed the Broncos' entire online store. It, too, was anchored on Yahoo! Store.

By the time the Broncos and the Falcons met in Super Bowl XXXIII on Jan. 31, the Broncos` store was getting more than 4,000 visits per day and had generated nearly $350,000 in online orders.

While each team set up its online store very differently, the end result was the same: a successful, profitable season, both on and off the field.

3,400 COMPANIES SET UP SITES

One of the key selling points for Yahoo! Store is that it's easy to use.

Everything is built from forms and databases. So far, more than 3,400 companies have set up stores, said Yahoo! Store Producer Paul Graham.

"I've done HTML and I know how much time it can take," the Falcons' Mr. Beadles said. "With Yahoo!, if I had a new item I wanted to add, it only takes five minutes and you can start taking orders."

But since everything was programmed to come to him, he had to download the orders every day, process credit card payments and arrange delivery. "I willed myself to come in" the few days he was sick, he said.

Packing the orders was another challenge. Using a ballroom at the shuttered hotel as a distribution warehouse, Mr. Beadles and a part-time assistant pawed through dozens of boxes of T-shirts, sweatshirts and other paraphernalia to fill orders.

Things were quite different in Denver. By outsourcing the store, "ProTeam takes all the risk," Mr. Harbula said.

CATALOG, DIRECT BACK ONLINE

In addition to the online store, ProTeam.com markets a print catalog for the team. It also created a direct marketing program aimed at Denver fans, said Mitch Rothschild, ProTeam.com VP-brand management.

ProTeam.com in November struck an alliance with Yahoo! to offer shopping and sports promotions on Yahoo! Sports. It uses Yahoo! Store as well as its own proprietary technology to create its sites.

Mr. Harbula said he wouldn't think of building an online store on his own. "We weren't interested in the upfront investment it would have taken" to staff the site, acquire an e-commerce engine and fill the orders.

Yahoo! charges no setup fee and as little as $100 per month to host a 50-item store.

FALCONS PAY ZERO

But the Falcons paid nothing for their store, Mr. Beadles said, a fact Yahoo! Store officials would neither confirm nor deny.

The Broncos also paid nothing to ProTeam.com and earn a 15% royalty on net sales from the online store. For the fourth quarter, that translated into a payout of exactly $13,260.60 on net sales of more than $88,000, Mr. Harbula said.

The Falcons declined to discuss store revenue or net sales, but when asked if the store is profitable, Mr. Beadles responded, "Very."

The biggest problem with Yahoo! Store was its inability to handle real-time credit-card processing, Mr. Beadles said. That's something Yahoo! is fixing, said Mr. Graham, the producer, who added that only 50 of the more than 3,400 Yahoo! stores use real-time processing.

Building a Yahoo! store also means trading technological freedom for the massive promotional power of Yahoo!.

Sites that use Yahoo! technology are automatically part of Yahoo! Shopping, where consumers can use a single checkout procedure. Yahoo! was responsible for 20% of the Falcons' store traffic, Mr. Beadles said.

But the tradeoff means sites have limited creative freedom and can't customize things like an

e-mail response thanking consumers for their order, Mr. Beadles added.

CYCLICAL TRAFFIC

The good news for the Falcons and the Broncos is that their business is highly cyclical. Traffic to the Falcons store dropped from 110,205 visits in January to 19,829 in February (losing the big game may have had something to do with that).

It also gave Mr. Beadles a chance to catch his breath. The team is planning to hire someone to manage the online store full-time and recently held talks with ProTeam.com. But the Falcons decided to go it alone next year, and plan to continue using Yahoo! Store.

The Broncos, meanwhile, have a two-year contract with Pro-

Team.com. ProTeam.com sees Yahoo! more as a promotional channel than as a technology, and ProTeam.com is considering revamping the Broncos store with its own technology.

Neither team got rich from its online store last season, but neither lost money, either. In 1999, that's still a laudable accomplishment.

Debra Aho Williamson is a Seattle-based writer focusing on Internet business issues. Send Internet case study ideas to her at debrawilliamson@earthlink.net, or Interactive Editor Kate Maddox at kmaddox@crain.com.

Copyright March 1999, Crain Communications Inc.

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