Dick's Digital Strategy is On the Move
Dick’s Sporting Goods is heading into 2017 on the right track. Leveraging a constantly evolving digital strategy, the chain has adopted a fleet of digital solutions that “connect the dots,” and drives an interactive customer experience.
The sporting goods segment has experienced significant upheaval of late, with the bankruptcy of The Sports Authority and the acquisition of Cabela’s by Bass Pro Shops. While many retailers simply try their best to navigate amid market uncertainty, Dick’s Sporting Goods has managed to hit a home run. The omnichannel retailer, which operates more than 645 stores across the United States, recently acquired the rights to more than 30 Sports Authority leases, along with the chain’s brand name, customer list and domain names.
Thanks to its ability to thrive in an uncertain and shrinking market, the company racked up net sales of $7.3 billion in 2015, a 6.7% year-over-year increase. Achieving these goals took patience, planning and the development of a business strategy designed to future-proof the company within an increasingly digital marketplace.
Dick’s initial move toward a digitally-driven strategy dates back several years, at a time when the sporting goods retailer was already well-entrenched in the e-commerce game. It was successfully operating an e-commerce site with the help of a third-party partner, and was enjoying strong e-commerce sales performance prompting Dick’s to double down on its digital efforts.
Its first move was to add a multi-tenant platform designed to support multiple e-commerce stores. The flexible architecture, added in 2014, also underscored the company’s plan for upcoming strategic projects.
Dick’s Sporting Goods launched two proprietary e-commerce sites on its own platform — Golfgalaxy.com and fieldandstreamshop.com. However, in an increasingly mobile landscape, e-commerce is only the tip of the iceberg.
Based on these successes, “We were ready to sharpen our vision around digital,” said Rafeh Masood, Dick’s vice president of customer innovation technology. “What started as having a presence via a channel or website has evolved. Now we want to use digital technology to inspire shoppers to connect with our channels, and have a true omnichannel experience.”
Dick’s Omnichannel Offense is a Good Defense
Dick’s looked within to grow its digital strategy — one that needed to leverage its network of stores, and build next-generation omnichannel capabilities. This included increasing inventory efficiencies, a practice that centered on leveraging regional store inventory and vendor-direct shipping partnerships; in-store associate ordering; and new digital tools designed to strengthen personalization among omnichannel shoppers.
Already seeing success through golfgalaxy.com and fieldandstreamshop.com, Dick’s next move was to gain more ownership of its dicks.com operation. The outsourced site was successful from a sales perspective, but Dick’s needed to keep pace with customers’ demanding more flexibility, which could best be achieved by taking operations in-house. The retailer set a goal to gain e-commerce independence in 2017, and has been working toward fulfilling this milestone for more than two years. By bringing e-commerce in-house, “we expect to significantly improve our profitability,” Masood reported.
Driving Mobile Momentum
The unified platform is the catalyst that will streamline cross-channel data accessibility, and support new features within the chain’s digital strategy. Most importantly, the foundation drives the agility needed to launch new omnichannel solutions and services.
“We need to deliver new omnichannel capabilities to differentiate our brand from competitors,” Masood said. While retailers industry-wide strive toward this goal, not many have the resources that Dick’s can deploy. In order to differentiate the brand, the sporting goods retailer is currently exploring the value of another innovative solution — mobility.
For starters, the company is eager to service shoppers while on-the-go. To do so Dick’s built optimized sites for its two e-commerce businesses, golfgalaxy.com and fieldandstream.com. The company is also focusing on its mobile app as a means to increase its customer base and drive revenue. While the brand is committed to expanding the number of app downloads as a means of increasing mobile commerce sales, Dick’s is eager to go beyond driving sales and is using the new technology to create lasting shopper engagement.
Value was added to the app by piloting beacons that automatically pull up the company’s rewards card — ScoreCard — as a customer approaches the POS. Another focus for Dick’s was to enable the integration of wearables with its mobile app. “Micro-location services are a means to add value and personalization for customers while respecting their privacy,” Masood said. “We need to innovate faster. This requires an infrastructure that not only creates a more robust experience, but supports more profitability, as well.”
It also required Dick’s to structure its mobile category in a more competitive way. Thus, appointing a mobile app team tasked with expediting development for mobility and apps designed for a new level of engagement was critical.
While many retailers are evaluating how mobility can help them differentiate, the mobile team at Dick’s is helping the brand break away from the competitive pack. “With so much content available, we found a way to use mobility to connect our channels, communicate with our loyal shoppers and support our evolving omnichannel experience,” Masood said.
By integrating its mobile app into its golfgalaxy.com division, for example, Dick’s is enhancing one-to-one customer engagement. Mobile shoppers can sign-up for an in-store lesson or schedule golf club fittings, helping bridge the gap between the digital and physical worlds. Meanwhile, interactive videos enable shoppers to improve golf swings and other techniques. “The app also keeps track of search histories, enabling shoppers to review previous lessons and methods learned in-store,” Masood explained.
While mobile applications give retailers insight into customer preferences, loyalty programs still capture the most valuable customer-specific nuggets — especially as retailers make the move toward real-time customer engagement. There is no doubt that loyalty programs boost “stickiness.” However, last year 50% of retailers said they couldn’t effectively use their existing shopper loyalty profiles in the store, according to RIS News’ “13th Annual Store Systems Study.” It was a challenge that has put brands in the hot seat to up their game — Dick’s included. Currently, 52% of retailers are investing in loyalty programs and customer relationship management (CRM) software, according to the study.
Dick’s is giving the concept its own unique twist by linking its mobile app program with consumer fitness trackers as a way to drive loyalty and innovate in the growing wearable space. By integrating its app with consumer fitness trackers, the sporting goods chain had a new way to encourage — and reward — shoppers for their active and healthy lifestyles. Called “Move,” the new functionality enables consumers to sync their fitness trackers. As they stay active and move toward personal activity goals, shoppers can earn rewards, called Dick’s ScoreCard points.
“We are using this as a conduit to inspire and motivate our customers to stay active, and use wearables to get this information,” Masood said. “By rewarding customers with ScoreCard points, we are, in turn, creating an affinity to our brand.”
To move the needle even further, Dick’s hosts “bonus events” to encourage shoppers to stay active. Its most recent — the Team USA Challenge — was a two-week event that coincided with the 2016 Summer Olympics, and rewarded users with extra bonus points. “Consumer trackers or wearables supply users with quantitative information, such as the number of steps or miles covered,” Masood explained. “Our business algorithm converts this information to loyalty points, and importantly, motivates the customer via notifications to achieve the goals to stay active.”
Meanwhile, an integrated synchronization engine synchronizes and tracks activities in real-time so that loyalty points are awarded instantly. The program generated so much interest that 200,000 customers downloaded the app the day it launched, and 1,000 of these consumers connected their FitBit the same day.
Whether leveraging fitness trackers or smart watches, wearables have been a central part of the brand’s digital portfolio since the fourth quarter of 2015. Masood reported that the combination of wearables with the mobile app “keeps the customer at the center of all we do.”
For Dick’s, merging its content with consumer-specific initiatives must stay interactive if it is going to make an impact among users — and the brand. As a result, wearables have helped spur the next level of loyalty: gamification. Retailers are using elements of game design in more traditional settings as a means of driving engagement, and spurring physical activity. For Dick’s, gamification is transparently encouraging shoppers to participate in both actions.
To incentivize people to stay active, the initial rollout encouraged shoppers to sync their FitBit and MapMyRun wearables and apps to the Dick’s Sporting Goods app. “It was a means of taking a transactional process and transitioning toward engagement via our gamified mobile app,” Masood explained.
The app enables shoppers to clearly plot their fitness journey, from tracking progress by enrolling in periodic challenges, to receiving progress notifications and keeping their fitness wearable and app synched in real-time. Positive results of the initial launch not only pushed the chain to integrate Garmin and Apple Health on Apple iPhones and Apple Watches into the mix, but track progress via Android and iOs platforms, all of which the platform currently supports.
Connecting the Dots
Since launching its mobile strategy, shoppers’ engagement levels and integration of their wearable devices continue to rise. Of the 200,000 shoppers that downloaded the app a high percentage remain active on a weekly basis. Of course, wearables are not where Dick’s mobility focus ends.
In 2017, the sporting goods chain plans to have all three websites — golfgalaxy.com, fieldandstreamshop.com and dicks.com — and five mobile sites live and managed in-house. “The first three mobile sites will be customer-facing ‘m-dot,’ mobile-optimized sites and ‘t-dot,’ or tablet-optimized sites for these three e-commerce experiences,” Masood explained. “The other two mobile sites will be associate-facing, including an endless aisle site available on associate tablets, as well as a version that will run on in-store kiosks.”
The five sites will support the company’s anticipated immersive experience, one that ties e-commerce, mobility and wearables. “Our digital strategy is a means of connecting the dots across our customer touch points — both digitally and in-store,” Masood said. “With a conduit to drive communication and have an interactive customer experience, we can unlock more value for our digital customers.”