Inside Retail about the organisation’s retail plans in the region, and how it is seeking to harness the success of, and huge support for, Australians in the NBA. She also discusses the NBA’s sustainability agenda, and how it’s embracing new and emerging trends and technologies Inside Retail: Can you tell us about the NBA’s decision to open retail stores in Australia? Are there plans to expand and open more locations, and is the NBL seen as competition in this space? Lesley Rulloda: Opening our first bricks-and-mortar NBA Stores in Australia reflects our continued commitment to engaging our fans in Australia, and it was a natural progression for us to build on our existing collaboration to introduce the NBA’s first bricks-and-mortar NBA Stores in Melbourne and Sydney. For the operations of said stores, we looked to retail giant and [store operator] Lids, who in addition to having a great deal of physical retail expertise, also have experience operating NBA Stores. We recognize the enormous and still growing appetite for all things NBA in Australia. In fact, “The NBA” was the most searched term on Google in Australia in 2021, and Australia remains the number one country in NBA League Pass (our premium live game subscription service) [in terms of] revenue and subscriptions outside of the US. While we currently do not have plans to open additional locations, our stores in Melbourne and Sydney offer extensive physical retail experiences for our fans to come together and celebrate their shared love of the game, and shop at the widest range of NBA and WNBA products in the market. Regarding the NBL, we certainly don’t view them as competitors. We have a positive working relationship with the NBL, having collaborated on several initiatives over the years, including hosting NBL teams as part of NBA preseason games. We are strong supporters of the NBL and all they’ve done to grow the game of basketball in Australia, and we look forward to our continued collaboration as we work towards our shared goal of elevating the game of basketball in Australia. IR: Australia has a strong history of producing NBA players. How has this impacted the NBA’s brand in Australia, and have you noticed any trends in merchandise sales related to these players?  LR: Australia truly punches well above its weight in the NBA. With 12 Australian players currently playing in the league, Australia trails only the US and Canada as the most-represented country. Australia’s success at producing NBA players correlates with the country’s growing interest in the league, and the sale of jerseys reflects that. In February, we released our annual list of the top-selling jerseys based on sales from NBAStore.com.au, and while the expected names are present (Stephen Curry, LeBron James, and Giannis Antetokounmpo rank first, second and third respectively), the list also features local hero and NBA Champion Patty Mills, and NBL alum LaMelo Ball. Our NBA Stores in Melbourne and Sydney both feature a wide assortment of official NBA and WNBA team and league-branded merchandise and memorabilia, including exclusive hyperlocal NBA products like “NBA Melbourne” and “NBA Sydney” tees and hoodies. The stores also offer on-site customisation services for fans to personalise jerseys and hats – a signature feature only available at select NBA Store retail locations. Our store in Melbourne in particular features a dedicated section showcasing artwork created by a local artist.  IR: Can you discuss the split between e-commerce and physical retail sales, and whether there are distinct strategies in place for each channel? Do you think the physical locations are or will enhance online sales? LR: We don’t view online and offline as disparate strategies. Our goal is to ensure that we not only deliver a cohesive and seamless retail experience to our fans in Australia, but we are offering them the products that they are looking for, whether they choose to shop online or in-person at one of our physical locations IR: Can you discuss how NBA and WNBA merchandise is performing across the Asia-Pacific region? Where is it particularly popular, and/or performing well? LR: Asia-Pacific is a region with massive potential, and fandom for the NBA and basketball continues to grow. We have dedicated online and bricks-and-mortar NBA stores across Asia-Pacific to ensure that our fans across the region have access to the largest selection of NBA and WNBA merchandise. The Philippines in particular is a thriving basketball market, and one where we continue to experience great fan interest. In South Korea, we have a longstanding partnership with Hansae MK, who currently operate more than 140 NBA Shops across the country with its own unique take on NBA products. Overall we’re thrilled with where we are now, and we will continue to bring more unique products and experiences to our fans in the coming years. IR: How do you see Web3 and other technological initiatives impacting the merchandise industry, and are there any plans to incorporate NFTs in the NBA’s merchandise offerings? Is that being done already? LR: The future of basketball and the NBA will be defined by digital innovation and our ability to reach fans on their preferred platforms. Innovations like Web3 seem almost tailor-made for a global league like the NBA, and have saturated the league’s culture to a greater extent than other professional sports. Sports are inherently communal and with immersive technology, we can create more shared virtual experiences that foster and connect a global community of fans, making NBA fandom more accessible than ever before. We have long prioritised the importance of a multiplatform strategy to meet fans where they are, a strategy that the circumstances of the pandemic really underscored. We are focused on using advancements in technology to make the fan experience more interactive and personalised.  This past year, we signed a handful of partnerships and renewals that have reinforced the league’s commitment to digital innovation and our eagerness to meet our fans where they spend their time. We have seen a continued presence in virtual worlds on emerging platforms (i.e. VR, AR) that give fans interested in gaming, music, fashion (i.e. digital merch) new ways to connect with the league and each other. Examples include: We launched “NBA All-World” earlier this year, in partnership with Niantic and the National Basketball Players Association. NBA All-World turns the “real world” into a virtual basketball game where no matter where you are in the world, you can find unique basketball game experiences via your mobile device.  This past January, we announced a multi-year extension with Meta. The renewal features a new virtual reality experience for fans through Meta Horizon Worlds via Meta Quest, the official VR headset of the NBA and WNBA. The partnership extension also introduced NBA-licensed apparel in the Meta Avatars Store, which launched in February. Earlier this year, we signed a licensing deal with VR basketball application Gym Class. The game allows users to play on team-branded courts and adorn their avatars with official digital apparel and accessories. NBA 2K is a perfect example of our continued presence in virtual worlds, leveraging digital merchandise offerings and providing our fans with more opportunities to express their fandom year-round. In celebration of All-Star, NBA 2K23 released NBA All-Star merchandise collections in-game from multiple NBA licensee brands, including NBA All-Star 2023 jerseys from Nike and apparel from Pro-Standard, Just Don and Jeff Hamilton. IR: What steps is the NBA taking to ensure sustainable and ethical practices in its merchandise production and distribution, and are there any plans to incorporate more sustainability-focused merchandise into the NBA’s offerings? LR: We take a number of measures, both externally and internally, to strengthen our sustainability measures. Firstly, we’ve assembled an NBA Sustainability Committee, where we identify opportunities to find greener initiatives throughout the NBA, including in our merchandise group where we continually look to explore opportunities to eliminate unnecessary waste and carbon emissions from shipments. We also regularly donate finished products as a result of IP and logo changes to community organisations and those in need. We also have NBA Green, which we launched in collaboration with the Natural Resources Defense Council in 2008 to promote sustainability and conservation. In 2019, we joined the United Nations’ Sports for Climate Action Framework by pledging to undertake systematic efforts to promote greater environmental responsibility, reduce overall climate impact, educate for climate action, promote sustainable and responsible consumption and advocate for climate action through communication. As part of league events, the NBA has worked to measure, reduce and offset the carbon footprint of certain aspects of marquee events since 2012.  NBA Green initiatives have included fan education, electronics take-back programs, recycling programs and additional support of important partners such as the Student Conservation Agency, NEEF, SandSI and the Arbor Day Foundation. Sustainability is an area we remain focused on, and we are fully committed to promoting environmental sustainability in the communities where we live, learn and play.