Dick's Directs Tech Improvements to the Store
Trying to optimize the omnichannel experience in its stores is “top-top of mind” these days for Dick's Sporting Goods. The company is investing heavily on improving its store experience, including bolstering its technology.
“We’re extremely focused on the experience that athletes will have when they come to the store, the service that our teammates provide to athletes when they come to the store and making it just the hub of a big omnichannel wheel,” said Dick's president Lauren Hobart in an earnings call.
Enhancing the athlete experience in stores is “critical” for Dick’s long-term growth, according to chairman & CEO Ed Stack. The retailer’s stores generate approximately 80% of its total revenue.
Dick’s plans capital expenditures to be around $200 million in 2019, which will be concentrated on improvements within existing store technology and e-commerce fulfillment, as well as expenditures for seven new Dick’s stores and two new Golf Galaxy stores. This is up $30 million from the cap ex of $170 million it spent in 2018.
The retailer’s investments will have an approximate $60 million on EBT in 2019, according to CFO Lee Belitsky, and include $35 million to enhance the athlete experience in stores, $15 million to improve e-commerce fulfillment capabilities, and $10 million for technology.
Dick’s has already transformed its technology group into a “very agile organization that is focused on product teams that are enhancing the experience across almost every aspect” of how Dick’s does business, from the website and the athlete experience to the productivity of its support center and stores, according to Hobart.
“It's a change in approach to how we actually implement technology,” she noted, “becoming an enormous strategic weapon for us and they are focused on absolutely every aspect of our internal and external experience.”
In addition, the company plans to deliver more robust training and education for store associates. One way it’s doing this is with an upcoming new multi-day footwear training summit to elevate associates’ product expertise and selling skills. The company also said it recently delivered an app, dubbed “merch search,” to all Dick’s stores nationwide, which provides real-time product information including detailed product descriptions, inventory availability, and alternative product recommendations. The app enables associates to guide shoppers through their shopping experience.
Enhancements to the store experience include space reallocation efforts, rollout of HitTrax technology and batting cages, expansion of strike point presentations, and investment in the company’s product development teams.
To make stores more experiential Dick’s tested the addition of HitTrax technology in batting cages in several stores, later expanding the tech to 150 stores.
“This fun and interactive experience allows our baseball and softball athletes to determine the best bat for them by testing and measuring their launch angle, exit velocity and distance,” Stack explained.
The retailer is also investing significantly in its fulfillment capabilities, including building two new dedicated e-commerce fulfillment centers in New York and California, which are slated to open during the company’s third quarter and will enable Dick’s to deliver the majority of online orders within two business days. The company is also investing in robotics to drive automation and optimize Dick’s cost per shipment in the New York fulfillment center.
Online, Dick’s is working to improve the functionality and performance of its website, with updates like faster checkout, improved page responsiveness and new content through its Pro Tips platform. In addition, later this year, Dick’s will re-platform its mobile and tablet sites, which Hobart said will allow Dick’s to “control our own mobile destiny.”