Integrating Online Retailing

Sportsmart

If you are in Victoria, chances are you are sports-mad. So you are likely to spot when one of the top local sports-goods retailers suddenly sports a new look and a new logo. Sportsmart has just overhauled its brand identity and is planning to take advantage of the online sales revolution to increase its presence elsewhere around Australia.

The company’s founder in 1969 started a pro shop attached to tennis and squash facilities at Moorabbin, southeast of the Victorian capital; Sportsmart itself as a brand and retail operation commenced in 1983. Thirty-odd years later the business “is still small – we have just four outlets – but slow and steady growth” is the order of play, according to Director Gerrard Woods. He stresses that expansion needs to be at a more leisurely pace than his customers’ running; “we are hundred per cent independently operated, not part of any other groups, and we control our own destiny.”

When Gerrard took over the reins of Sportsmart eight years ago, a “tremendous amount of work had already been done behind the scenes,” he says, especially in key areas such as stockholding, a traditional bugbear with apparel retailing and the attendant need to carry so many sizes and colours of every item in every store. “We were a lot more advanced than other retailers and that has made it easier for us to plan better around major sporting events that come round each year.” Most of the popular sorts start up around the same time each year – about now – but the planning that had been done a decade ago “enabled us to focus on the day to day running of the business in a relatively straightforward manner.”

Being small brings its own challenges, says Gerrard, “but it does give us a high degree of flexibility as well as the ability to make decisions with our customers in mind – we don’t have to consider other financial stakeholders. We look after our long-term business interest by making sure we are providing relevant and extremely useful solutions to our customers.”

Small in this case means four stores dotted around Melbourne at Kilsyth, Casey and Northcote as well as the original Moorabbin outlet. All are run as a single entity, rather than independent operations, and stock can be quickly moved between stores in case the balance of stock is depleted or there is demand for a particular product across the city; there is a truck service between the stores and stock is all online.

The competition is not merely local, of course, against other sporting goods retailers around Melbourne. It is increasingly online and here Sportsmart is suddenly thrust into global, not just nationwide, competition. “The last two years have seen unbelievable growth in the company’s online business,” in fact. Gerrard predicts that if the online store is taken in comparison with the four bricks-and-mortar outlets, it will probably be the second biggest in turnover by the end of this year. “We don’t have any geographical boundaries and we offer free shipping on many lines,” he explains. “It has been a key strategy with our online store to break down the geographical limits on shopping.” Indeed, there is only one product price – doesn’t matter if you live in Sydney CBD or in the outback.

Growth in online business, however, “will never make the physical store redundant,” believes Gerrard. Sporting goods is still a sector where there is a large variety of products and touching and feeling the various options is an important part of the buying decision, not to mention advice from staff in-store who know of what they speak. But the online shopping opportunity offers customers products they cannot obtain at every sports store. “We tend to find the products we sell online are mainly specialist sports products that average stores don’t carry so most people cannot experience the range locally,” Gerrard shares.

Swimming in the shark-infested seas of online retailing puts Sportsmart head to head with the Amazons of this world, so what about the need to compete on price – which the massive global networks use as their USP? Gerrard acknowledges this – the company has to be price-competitive – but points out that “different pricing around the world depends partly on exchange rates and other factors that are out of our control. There are still a lot of specialist sports products that are particular to Australia – or at least not prevalent worldwide.” He cites cricket, netball and – of course, given the Victorian location – footy as sports that are not as well catered for outside Australia as they can be by a good operation such as Sportsmart.

“People definitely prefer to buy from an Australian supplier if they can. There are some factors that are outside of our control, but I must say that although the internet has opened us up to a whole range of competitors, especially international, it has been a great positive for our business. It has increased our visibility” to people who want to shop not only locally but around Australia. “It has made us easy to find and people looking for the types of products we sell are searching round the internet and finding us. It has been a net positive and far outweighs the increased competition the internet has brought.”

Gerrard says, refreshingly, that learning the online business has not been the horror story told by many other retailers. Sportsmart set out to treat the virtual store essentially the same as the physical outlets, “not cutting corners on staff or stock or anything else, a trap we have see other retailers fall into. We have staff dedicated entirely to our online store which makes it much easier for us to monitor what we need to do to operate successfully.”
In terms of demand – what products and when – the sports industry is “fairly predictable,” says Gerrard. There are five basic seasons, such as the footy or cricket, the Christmas boom and post-Christmas. The biggest challenge is matching Sportsmart’s offering to the changes in consumer demand, which requires well-tuned market antennae. Changes in preferred sports and, more than ever in the current climate, how people exercise, are what drive market demand.

That demand can also be affected by success or otherwise for national teams. It will not surprise readers that this has been a fantastic cricket season, for example. “The biggest influence on our business is probably the participation rate in the sport, which is linked to how well the national team is performing.” But there are other factors to consider. “Basketball is extremely popular now, but that is due mainly to the core demographics or characteristics of the sport itself – how long does it last, how easy is it to pick up, is it played every weekend?” Cricket’s current status is of course linked not only to the Ashes smashing of England but – importantly – also to its prevalence on free-to-air TV during the summer. Visibility is vital too.

So are Sportsmart and its competitors endangered by the fact that kids nowadays spend their time playing computer games instead of real ones? Or is that an old wives’ tale? “It’s not a myth. But one of the big influences for us is the amount of organised sport that young people are playing,” in relation to how much general free time they get. In five or 10 years’ time, however, the effect may be felt in that people may have been living more sedentary lifestyles and growing up with perhaps less ‘play’ time. As you get older, there is generally less access to (and time for) organised sport than when in school. That, says Gerard, could impact the industry eventually, although sport generally is becoming more organised. Older people go on ‘fun runs’ in organised groups more, instead of just taking off across the park on their own, for example.

Sportsmart has changed its logo to ensure it is usable in all formats in today’s marketplace – high visibility in print, online and on screen. The previous logo favoured TV but the makeover reflects the change in the way customers source their information. “It’s highly visible,” says Gerrard. So why not run round and gear up for the coming season!

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June 19, 2018, 10:36 AM AEST