Dick Sports Is Trying To Resist The Electricity Supplier Impact And Strategy Storm.

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The impact of the direct camp strategy is not easy for sporting goods retailers in the United States. At present, Dick's Sporting Goods, the largest in the US, is no exception.

According to the world clothing shoes and hats net, in August 16th,

The second quarterly report released in fiscal year 2018 showed that retail store's most valued same store sales rose only 0.1% compared to the same period last year, far below the 1.4% expected by analysts.

Although online sales increased by 19% over the same period last year, this figure accounted for only 9.2% of total sales, slightly higher than 8.5% of the same period last year.

In the same store sales slack and stores continued to discount, Dick sports announced the results of the 2017 financial year earnings forecast.

Immediately after that, the price of the sporting goods retailer fell nearly 23%, and investors worried that Dick sports would face a long-term risk of diminishing profits.

"The retail industry is in a difficult environment and is in a state of panic," said Dick sports CEO Edward (Edward Stack) at the investor conference call on August 16th. "Sporting goods retail is in the midst of this storm."

Edward Stark did not exaggerate. Last year, Sports Authority, the top five sporting goods retailer in the United States, announced that bankruptcy had shocked the industry.

In 2006, Sports Authority was bought for $1 billion 300 million by Leonard Green&Partners, a private equity firms in Losangeles.

Due to the fierce competition and bad operation of e-commerce, in March 2016, when the company declared bankruptcy, it was already in debt of $1 billion 100 million, closing more than 450 stores and firing about 14500 employees.

Not only that, but in February this year, MC Sports, a veteran sporting goods retailer set up in 1946, declared bankruptcy, after which it had 68 offline retail outlets in seven states.

Almost the same period, Eastern Outfitters, an outdoor sporting goods retailer, filed for bankruptcy.

In addition, Foot Locker plans to close 100 stores this year.

Data from us business media Business Insider show that more than 6300 clothing retailers have closed down since 2017.

Traditional sporting goods retailers in the United States are facing panic. The main reason is the continuous improvement of e-commerce environment.

Amazon's market position is increasing, and the volume of offline shopping centers is decreasing.

At the same time, the large and old sporting goods stores on the streets of the United States have become increasingly difficult to attract fashionable young consumers.

As an established brand in 1948, Dick sports has been updating its display and decoration in stores in recent years, and has enhanced the layout of online sales under the electricity supplier crisis.

In the two quarter, the online sales of Dick sports increased by 19% to 2 billion 160 million US dollars, although slightly improved, but the electricity business accounted for only 9.2%.

It is worth noting that in fact, Sports Authority has expanded the platform of Electronic Commerce on a large scale before its failure.

However, due to the late start and the high cost of daily operation, the online sale failed to become a life-saving straw. Instead, it increased the capital burden and accelerated bankruptcy.

How to optimize the operation process of e-commerce business, which is an important factor that must be considered, including a batch of traditional retailers such as Dick sports.

In addition to consumer oriented online shopping, the direct strategy adopted by major sports brands in order to reduce channel costs is also eroding the market share of traditional retailers.

The fourth quarter earnings report released at the end of June showed that Nike, a sports giant, is concentrating its efforts to expand its direct selling business, and its direct sales revenue increased by 12% to 9 billion 82 million US dollars.

The two quarter earnings report released by Adidas in early August was equally dazzling. The German brand's direct business business grew by 66%. In the US market, its electricity supplier sales increased by nearly 80%.

In July this year, Nike announced the launch of a "pilotage plan" cooperation with Amazon.

Nike will sell products directly on the platform instead of selling through third party or unauthorized retailers, and the direct selling business will further expand.

At the same time, Amazon will develop more stringent anti counterfeit measures for the other side and control the number of similar retailers on the website.

In other words, including the largest Dick sports in the United States, whether traditional physical retailers or online distribution stores wrapped up in electric business clothing, their business seems to be getting worse and worse.

Against this background, Dick sports's strategy is to attract consumers at low prices.

In July this year, they launched the "best price guarantee" plan. As long as consumers found that a product in other online or physical shops was cheaper than Dick stores, they promised to match the lowest price.

"We will become more aggressive and beat others at low prices," CEO Edward Stark said. "We will not sit idly by and wait for the tragedy to happen. We have the resources to fight the storm."

Although Dick sports is trying to withstand the storm, the discount strategy will undoubtedly lead to a reduction in profits. The sharp fall in current share prices has shown investors' concern about this behavior.

But for the traditional sporting goods retailers in the US, they seem to have no idea of a better way.

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