When it was outsourced to GSI Commerce, fitness was the largest part of Dick's Sporting Good's e-commerce business. Since bringing e-commerce in house, the retailer is now seeing much more broader-based gains.
“We have really focused our e-commerce business to be more traditional from a sporting goods standpoint,” said Tim Kullman, Dick's SG's EVP and CFO, at Goldman Sachs Retail Conference. “Our footwear business has gone up significantly, our apparel business has gone up, [and] our golf business is up very high in the e-commerce channel. So we feel that the ability to be a multi-channel retailer is really important.”
With the transition occurring over the last 18 months, Kullman said the retailer now has the ability to order product from one of its stores if the website runs out of stock. Also, an item the retailer doesn’t carry can be procured from the vendor and shipped to a customer's home. In a year, customers will be able to buy online and pick up at the store.
“We're really focused on this whole multi-channel category,” said Kullman. “We feel that our next big competitor could emerge from the specialty side of the Internet and we're making meaningful investments at a pretty rapid rate to drive this business.”
Added company CEO and Chairman Ed Stack, “You'll start to see some pretty meaningful comp sales gains coming out of our e-commerce business as we redevelop the site and look to re-market what we are doing from an e-commerce standpoint.”
Providing an overview of departments, Stack said team sports “continues to be an important area of our business,” with baseball, football, basketball, soccer all continuing to grow. Lodge has been hurt by a slowdown in the gun and ammunition business but kayak and camping have been “extremely good” in outdoor. Fitness has benefited from a transition from “high-priced weight machines” to items such as resistance bands and foam rollers providing flexibility and cardio solutions. Said Stack, “This has been a real boom to our fitness business and at much higher margin rates.”
Athletic apparel has been “very good” in both men's and women's.
Stack particularly highlighted the success of its Nike Fieldhouse in-store shops inside its stores. “We have a number of these up and running today; the results have been spectacular,” said Stack.
In Footwear, 80 of Dick's SG's 425 stores will to be converted to a shared-service model by the close of the year and the reconfigured sections are seeing a strong customer response.
“When we were testing this, [the customer] felt that our service was better, because they were able to help themselves kind of get in and out of our footwear area faster,” said Stack. “We also got credit for a broader assortment, when in reality our assortment didn't change.”
Stack said the overall golf business comped positively over the last year, between Dick's SG and Golf Galaxy. Golf is expected to grow in the second half although the category faces tougher comparisons.
Regarding private label brands, Stack said its Reebok partnership “has been great” and Umbro “has been just a terrific success story.” While private label, also including Field & Stream, Slazenger and Maxfli, are expected to become a “bigger part of our business,” Stack doesn't expect any “real meaningful changes” in its PL mix.
Asked about its progress entering California, Stacks said the “timing” was poor when Chick's Sporting Goods was acquired right before the economy and housing collapse.
Remodels were postponed at the time. But recently remodeled stores have performed well. Dick's SG now has 14 stores in Southern California. Overall, Stack expects California to “be a very good market for us” and said the obstacles faced there were similar to those seen in other regions.
For instance, he remarked that Florida is “a great for us now” once Dick's adjusted to initial pressures in the region. Likewise, Texas, as expected, was “the most competitive, most difficult market that we entered.” But Stack said that after some adjustments, Texas has turned into “a very good market for us, where our Texas stores are now comping at a faster rate than the company as a whole.”