It’s long been heralded as the race that stops the nations but, as past years have shown, the Melbourne Cup is a prime opportunity to get the economy and local businesses racing too.
According to independent research from IER, commissioned by the Victorian Racing Club (VRC), the glamorous sporting event contributed $387.8 million in gross economic benefit in 2015, a 3.6 per cent increase on the previous year. Drilling down into these figures, the ‘value-added contribution’ – a measure of money spent by visitors to Victoria – saw a new record, with the 2015 Carnival figure at $202.7 million, a 4 per cent increase on 2014.
It’s clear to see that the sporting event initiates a boon period for businesses in Victoria, and event organisers insist that’s only set to increase. The question for the State’s small business owners, of course, is how do you best leverage the economic impact?
Plan for increased footfall
Last year saw a 7.7 per cent increase in the number of out-of-state individuals who attended the Melbourne Cup Carnival. To put that into numbers, that’s the equivalent of 74,635 people who travelled to Victoria – injecting a not-insignificant $29.1 million into the accommodation sector.
Visitors are looking for new places to eat, sleep, drink, shop and more, which puts local businesses in the spotlight. Ask yourself if your business is in a prime position to embrace the additional footfall across the four-day period, and more. Should you extend your opening hours, employ more staff, increase your supplies, improve your signage, trial race specials, or otherwise find ways to make your business stand out and engage racegoers?
That’s exactly what microbrewer Modus Operandi did last year. Owner Jasmine Wearin recalls that a big screen and an abundance of fresh craft beer on tap ensured the brewery was packed to the rafters, despite being based in Sydney.
“We are usually closed to the public on a Tuesday so we would assume we will have more of a profit increase than usual. To avoid penalty rates we, the owners, work this day as we would work any normal Tuesday,” she said.
Capture your data
It’s likely you’ve sussed out some fairly standard patterns of trading – your busy periods, stock cycles, monthly profitability, and so forth – and these measurements are invaluable when forward planning in business. Annual events like the Melbourne Cup, though, cause unpredictable selling spikes.
Joel Gray, manager of Left Bank, a bar and restaurant on Melbourne’s Southbank that will be hosting an Oaks Day Lunch and Melbourne Cup Lunch, says that data played a crucial role in planning for this year’s events.
“We use the data from previous years to get a gauge on how busy the restaurant or bar will be at certain points and to make sure we’re prepared. The sales figures help to give us an idea as to what’s worked previously, or what we should probably stop doing.”
Look at your own facts and figures from the same period last year, if you have them, and don’t forget to engage your bookkeeper and accountant once the Melbourne Cup is through. Once you understand the true effects on your business, you can truly make the event work hard for your bottom line.
Adjust your selling strategy
Research from last year’s Cup told us that people are prepared to spend. In 2015, attendees of the Melbourne Cup Carnival spent more than $49.7 million on retail in Victoria over the event period.
The fashion industry enjoyed a big slice of the pie, of course, with 327,591 fashion items purchased last year – that included a massive 54,000 pairs of shoes, 53,000 dresses, 16,000 suits and 68,000 hats and fascinators. And while fashion businesses will no doubt have been fine-tuning their Cup strategy since last year, retail outlets of all kinds can tweak their sales focus to suit the different buying conditions.
With lots of bars and restaurants offering Melbourne Cup deals, Joel Young at Left Bank knew they had to do something a little different. “I think it’s important to run with the theme of what the city is doing, and then find your own point of difference.”
“Don’t be scared to put an event on for those people who aren’t heading to the race course. Make it special.”
Left Bank aren’t just hosting viewings of the Melbourne Cup, they’re also allowing punters to put their money where their mouths are and place bets; they’re hosting sweep competitions; and they’re rewarding those fashionistas that go above and beyond.
Consider the cost
Not every smart business decision means opening for longer hours or bringing in more hands on a public holiday. Consider the additional cost of hiring staff during expensive times, and seriously assess whether the outgoings are worthwhile for your business.
This was an issue faced by Aireys Inlet Hotel manager, Tim Wood. “Public holidays are always our busiest times given we are in a holiday destination. Profitability wise they can be challenging due to the extra loadings,” he said, adding the mid-week holiday gives the hotel a nice boost.
If you’re business is not in an applicable sector, don’t be afraid to strategically make the most of the downtime, and come back fresh.
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Image (sourced): Left Bank