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June 17, 2024
Why Is Dick’s Sporting Goods Gaining Share?
On Dick’s Sporting Goods’ first-quarter analyst call, Lauren Hobart, president and CEO, called out four strategic pillars driving continued market share gains: omnichannel athlete (shopper) experience, differentiated on-trend product assortment, best-in-class teammate (employee) experience, and creating deeper brand engagement.
Comps climbed 5.3% in the first quarter on top of a 3.6% increase last year, driven by growth in transactions and average ticket size.
The gains came despite challenges faced by Nike, Adidas, and The North Face in large part due to promotions required to work down elevated inventories over the last two years because of supply chain disruption as well as the pullback in discretionary spending.
Addressing the pillars, Hobart said Dick’s omnichannel reach is “driving robust athlete engagement.” She added, “We are continuing to enhance service levels across all our digital and store experiences to meet our athletes wherever they are, provide the support and service they need, and get product into their hands faster.”
Hobart explained that the company’s growth has continued to be driven by omnichannel shoppers, who spend more and shop more frequently than single-channel shoppers.
She also said that investing in digital capabilities is “central to our omnichannel success,” but investments in new concepts — including its House of Sport experiential concept, the next-generation 50,000-square-foot Dick’s store, and Golf Galaxy Performance Centers — are all further stimulating omnichannel shopping behavior. She particularly called out House of Sport for “creating an experience that people cannot get anywhere else.”
Eight House of Sport, 16 next-generation stores, and several Golf Galaxy Performance Centers will open this year.
The second pillar, “Differentiated On-Trend Product,” helps make Dick’s the “go-to destination for sport” in the U.S., according to Hobart.
“We’re excited about the product pipeline from our key brand partners,” she said. “For example, Nike’s recent Paris Innovation Summit highlighted several breakthrough products across apparel and footwear that we look forward to bringing to our athletes. Our relationships with our brand partners are stronger than ever and the innovation of performance and style, in our opinion, has never been better.”
She added that Dick’s private labels, led by DSG, CALIA, and VRST, are “resonating very well” with shoppers, with comps continuing to outpace companywide growth on stronger margins. Hobart added, “We see a long runway for sales and profitability growth for our vertical brands.”
Regarding “Best-in-Class Teammate Experience,” Hobart noted that Dick’s landed on Fortune’s Best Workplaces in Retail for the fourth year in a row. She said, “We remain focused on providing our teammates with the tools and technology to help them do their jobs better and driving a culture where they can develop and thrive.”
Finally, Hobart called out investments in “several exciting marketing campaigns,” including one starring actors Will Arnett and Kathryn Hahn and one around the March Madness tournament, helping fuel “deeper brand engagement” with consumers. Dick’s also recently marked the 10-year anniversary of its Sports Matter Program with an investment of $2 million in grants to support youth sports.
In the Q&A section of the call, Hobart said Dick’s is taking share “really across the board,” citing the benefit of an upgraded in-store experience, including full-service footwear departments that have helped gain access to footwear’s hottest brands, HOKA and On, as well as the appeal of its private labels across price points and some consolidation in the marketplace. She said, “It’s across the board and across the industry that we’re seeing share gains.”
Discussion Questions
Who is Dick’s taking share from?
What’s driving Dick’s outperformance and market share gains?
What threats do you see to the company’s continued wins?
Poll
Loading …BrainTrust
Georganne Bender
Principal, KIZER & BENDER Speaking
Lisa Goller
B2B Content Strategist
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
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Dick’s is gaining share across the board, mostly because it has a very strong proposition which makes it a must-visit retailer for sporting goods. However, Dick’s deserves full credit for its culture of constant innovation. Last week I visited one of Dick’s new larger House of Sports formats. It was fantastic! Brilliant product authority, beautifully designed, a great mix of services such as golf simulators, and excellent merchandising. It was just great retail! In building this new format, Dick’s asked themselves: what type of store would we be really afraid of it opened across the street from us? And then they developed it themselves. That shows the challenging thinking that is present within the business. More House of Sports stores will be rolled out, and many existing stores will receive upgrades. This is a retailer that does not stand still, which is why it’s growing share.
It’s also worth calling out the success in clothing – not just sportswear, but casual clothing. In the overall US casual apparel market, our tracking data shows Dick’s has almost doubled its market share since 2019. Over that time it has grown sales by 123.3% (compared to overall market growth of 22.6%). A lot of this share has come from department stores and clothing specialists. Dick’s has benefitted from the casualization of style, but it has also done a superb job in showcasing brands like Free People Movement as well as developing its own private labels. Dick’s often gets higher ratings for its casual apparel offer than some specialists!
It’s worth mentioning that the company’s in-stock position is quite consistent as well. Even during the pandemic. It was headed to out of stock, but had just enough. I think a lot of companies that made hay during the pandemic are continuing to shine. There is a certain amount of trust and loyalty that really does matter.
Yes, agreed. They are pretty good at inventory management!
Cheers to the merchants for great assortment and instock, but woe to the operators who run the stores with 4-5 employees total. Dick’s used to be an aura of expertise where you could learn about the products, which were best for you, etc – now, if you can even get someone’s attention, they just point you towards the most expensive option and walk away. If Dick’s wants to keep growing, this is where they must invest next.
Looks like Dick’s really has developed compelling pillars, along with digital capabilities, cool store concepts, strong brand partnerships and relevant private label offerings. I need to go check my nearby store to see this for myself!
As a consumer I can tell you that a visit to Dick’s Sporting Goods is a positive experience every, single time.
You can buy what Dick’s sells in any number of places, but you won’t get the same level of service. Store associates at Dick’s know what they sell, and that’s key to retail success.
Not to spoil all the fun, but I don’t actually see any evidence of increasing share here; what I see is, in a retail market of heightened inflation, moderate single digit comps (presumably in nominal dollars)https://investors.dicks.com/news/news-details/2024/DICKS-Sporting-Goods-Reports-First-Quarter-Results-Raises-2024-Outlook/default.aspx . So maybe they’re gowing share, maybe they aren’t; and if the former, a more meaningful question would be are many competitors doing the same – and presumably someone’s collapsing – or is it just them?
Dick’s is increasing share. The overall sporting goods market grew by 1.3% in the first quarter. Dick’s total sales are up by 6.2%. Compared to 2019, Dick’s Q1 sales are up by 57.1%; the overall market is up by 41.4%.
Thanks Neil! I thought that might be the case, hence my equivocation. That having been said, the problem of presenting nominal dollar comps and asking us to comment on the “gains” – always an issue, but even more so with inflation above the 2% “normal” the past few years – remains here on RW.
In answer to your other question, Sports Authority was the most recent to die. They were acquired out of bankruptcy by Dicks, but I think it was just for the brand itself. Other sporting goods companies have died as well. The space, like all category killers, is consolidating.
Spacious, sporty and spectacular, Dick’s Sporting Goods stores offer an immersive experience that attracts sports fans and fitness enthusiasts as a community. The interactive features, merchandise and store teams consistently impress customers.
Dick’s is thriving due to its strong value proposition and constant innovation. Its strategic focus on creating unique retail experiences positions the company well to stay ahead in the competitive sporting goods market. Dick’s is likely capturing market share from competitors like Nike, Adidas, and The North Face, who have struggled with inventory issues and reduced discretionary spending. Dick’s enhanced omni-channel strategy and unique product offerings are driving its market share gains. However, the retailer faces threats from economic downturns, shifting consumer preferences, intensified market competition, and the need to constantly adapt to rapid technological changes
Dick’s Sporting Goods has expanded its footwear and clothing assortment, making it more competitive outside of athletic equipment and sports goods. Mass merchants, shoe stores, both online and offline, and other broader category retailers have lost market share to Dick’s.
Since athletics and physical activities have remained strong, Dick’s has not been hit by inflation as much as other retailers. In addition to expanding its market into multi-generations, Dick’s has also expanded its store numbers, at a time when most retail chains are losing store numbers.
Dicks has also focused on investing in technology and developing its e-commerce platform. This has allowed the company to stay competitive and expand its reach. Investments in customer service improvements is a factor, too. – Db
Lauren Hobart and her leadership team have defined and refined a winning retail playbook. The four strategic pillars are each clearly focused, yet superbly aligned with one another, resulting in a compelling and clearly successful commitment to the athlete (customer) experience.
Under Hobart’s vision, Dick’s has shaken up a category that was becoming complacent and ignited a growth trajectory grounded in continuous innovation. The company has disrupted themselves and are rightfully enjoying the well-deserved increased market share and athlete loyalty.
The BrainTrust has commented on Dick’s several times in the few years. Each time, the threads were full of kudos. Dick’s is a smart company with smart leadership and dedicated people. In the sporting goods category, Dick’s has no close second. I imagine if top-of-mind were polled, few would challenge Dick’s position.
As noted in today’s discussion, Dick’s landed on Fortune’s Best Workplaces in Retail for the fourth year in a row. In retail, success revolves around great people on the floor.
The magic is in the mix. Dick’s offers almost everything you need for all major sports and more – both online and in-store. Their selection of merchandise, which includes many major brands, is second to none for major retailers in the sporting goods category. Any retailer – in any industry – must stay on top of trends and the latest merchandise if it wants to remain relevant and popular with its customers.
In general – and I know from unclose and personal, there is a more visionary and progressive thinking within the culture. Because of my association with Theatro, I know that store management is visionary, and that the “teammates” love it and love being able to be helpful to their “athletes.” That’s one important factor, right there.
Focus + Discipline + Curation + Storytelling = EXECUTION. I was in a Dick’s store yesterday. I had a very specific mission, but as I began to walk the store I found myself continuing to just walk the store. Aisle by aisle, pad by pad. The execution was flawless. They actually pay attention to floor space and fixturing. It’s not about fitting in an extra fixture or three. It’s recognizing the space and fixturing for what it is as putting the best assortment possible into that finite space. Sport after sport and brand after brand. The storytelling and ease of shopping are remarkable. It’s very clear that they assort and buy to both the space and rate of sale. And this was in what is probably a “C” store (Hadley, MA). I hate to say it, but that level of planning, merchandising and execution should be the norm for brick & mortar stores, but it isn’t. Discipline and focus are under utilized skill sets in retail. They are clearly embraced as top priorities at Dick’s.
Yes, storytelling! So important and so often overlooked. But Dick’s gets it!
It hasn’t hurt Dick’s that its major big-box competitors have closed their doors or otherwise retreated, and it also doesn’t hurt that national mass merchants (Kohl’s and Penney) simply don’t have the space or resources to be “category killers” in anything.
That being said, Dick’s is doing a lot of things right and keeps getting better. It has the space and the breadth of assortment to please the serious athlete in a variety of sports and outdoor activities, and it also offers plenty of selection for a “casual active” shopper like me. Shopping recently for new athletic shoes reminded me why I like Dick’s, and so do a lot of other customers — from the assortment of styles, sizes and colors to the assistance of a sales associate to the checkout experience. (And I haven’t even mentioned the growth of Dick’s e-commerce business.) Looking forward to the new concept opening in Milwaukee soon!
It’s easy to shop – well merchandised, neat and visually appealing with great product hierarchy. Strong range of “good, better, best options”. And a knowledgable, visible staff. When you go in on a product mission, you don’t come out empty handed. Not a given in many retailers these days. Back to the basics with a modern wrapper.
Dick’s is winning because…well because the store rocks!! Specifically: The selection across categories is GREAT, the merchandise mix, ditto, the layout, easy to understand, and the number of “wide and deep” sports categories is beyond compare. In store support is strong too–there is almost nothing wrong with the experience with the possible exception of the gauntlet of junk you need to walk past while waiting or going to a register…beyond that, a great merchant executing well.
Dicks Sporting Goods is another transformation and turnaround story we have been waiting for. Following a similar playbook leveraged by Best Buy a few years ago, where they shifted their operating models to be an omni always, customer, product, and service-centric strategy, Dicks Sporting Goods has changed the narrative on their go-to-market strategies.
The business results are a positive reflection of Dicks Sporting Goods transformation plans reaping benefits, as comps climbed 5.3% in the first quarter, following a 3.6% increase last year, driven by growth in transactions and average ticket size. Dicks Sporting Goods has once again become the number-one destination for all things sports and specialty lifestyle consumer needs. As a loyal customer, it’s so refreshing to go to Dicks Sporting Goods with my kids to get everything they need for their team sports. We can’t wait to visit a new House of Sports format store.
The Dicks Sporting Goods’ four strategic investment pillars, led by CEO Lauren Hobart, are the right foundation for the company to build upon.
Dicks Sporting Goods’ emphasis on the omnichannel athlete experience is driving robust athlete engagement. They continue enhancing service levels across all the digital and store experiences to meet our athletes wherever they are, provide the support and service they need, and get products into their hands faster.