07 Jul DICK’s Sporting Goods Strengthens Omnichannel through Brick and Mortar Planning

An April UBS report estimates that 80,000 US retail locations—or close to 10 percent of total stores in the country—will shutter by 2026, while e-commerce sales will rise to 27 percent of total retail purchases.

But those numbers don’t tell the whole story. Data-savvy retail companies are blending the two modes of shopping into an omnichannel strategy that can spark business advantage. Rather than framing online and physical sales as a zero-sum contest, leading executives recognize that stores and e-commerce can actually boost each other—a phenomenon known as the halo effect.

The largest sporting goods retailer in the US has taken this approach and emerged from the coronavirus pandemic stronger than ever. Bucking what some might think of as conventional wisdom in the era of one-click shopping, DICK’S Sporting Goods is adding to its network of brick-and-mortar stores to complement a growing online presence. Whether customers are browsing aisles of basketballs, lacrosse sticks, and running shoes, or swinging by for curbside pick-up of online orders, DICK’S strategically placed locations act as important customer engagement points in a thriving omnichannel network.

DICK’S Sporting Goods Expands a Thriving Retail Ecosystem

The company’s real estate division supports that network by relying on a geographic information system (GIS) to guide market development and retail optimization. Using the business insight generated by GIS—known as location intelligence—the company’s real estate directors forecast customer demand in new trade areas and analyze the concentration and spacing of stores in developed markets.

For instance, the team cross-references census-based data on sporting goods expenditures against its own loyalty data on online sales to spot areas of high customer demand, signaling strong potential for a DICK’S store.

DICK’S analysts also used location intelligence to plan the geographic footprint of an unprecedented venture: an experiential concept store called House of Sport, opened this March in Victor, New York, with another to open in Knoxville, Tennessee in June. The sprawling New York location is the company’s biggest store ever at 100,000 square feet, equipped with an outdoor track, a putting green, and an indoor rock climbing wall.

Over the past year, the company’s holistic approach to brick-and-mortar stores and digital channels has been instrumental in serving customers. DICK’S e-commerce sales surpassed $2.8 billion in 2020, a 100 percent increase. The strongest growth came from in-store and curbside pickup, as BOPIS sales increased more than 350% over the previous year.

With more than 850 stores across the country, DICK’S Sporting Goods was well-positioned to cater to consumers replacing gym memberships with home exercise equipment due to pandemic restrictions, or jumping into outdoor sports to accommodate social distancing. Acting as mini-distribution centers, the stores helped the company fulfill online orders quickly and efficiently. Since these brick-and-mortar sites had been selected for their accessibility to consumers, they helped cut down on delivery times for online purchases.

The company was, in part, able to capitalize on such trends because it had already established a thriving network of physical stores in trade areas assessed annually by GIS analysts

“The heavy lift of data here is massive,” says Jack Holden, a GIS specialist and market research analyst at DICK’S. “We’re trying to get the result right, trying to get the right site, and help people understand the data to inform very important decisions.”

Fact-Checking Assumptions with Location Intelligence

Five or so years ago, DICK’S analysts wondered whether the relationship between physical stores and online shopping might ultimately be a cannibalistic one. “The traditional thinking then, mostly outside the organization, was that brick-and-mortar was going to be really hurt by  e-commerce, and that we might not need as many stores,” says Bill Grassel, director of real estate market research and strategy at DICK’S Sporting Goods.

One of the benefits of location intelligence is that it checks assumptions against facts on the ground—and this particular assumption ended up being wrong. “A lot of the spatial analysis that we’ve been able to do has said [that] when we add new stores, we actually see our entire omnichannel sales go up,” Grassel says. “Unless we had been able to analyze those customer behaviors at that level, we might have assumed, if we open a store, we’re going to hurt our e-commerce sales and vice versa,” he continues. “But we really found more of a symbiotic relationship between the two.”

Mapping the Unexpected

In addition to guiding the expansion of the retail network, GIS-based insight also helps DICK’S respond to unexpected occurrences.

The onset of the COVID-19 pandemic was one such occurrence. The danger of the virus and the need to gather and share information quickly made maps and dashboards a natural fit.

“As devastating as this whole pandemic has been, opportunities arise out of trying to answer some questions about a very serious subject,” Holden says. In addition to directing colleagues to good sources of data on the pandemic and helping them create maps of their own, Holden produced dashboards showing where DICK’S stores were open, where stores were closed due to shutdowns, and the location of points of interest like testing sites. “We saw that come to life in a map,” Tirimacco says.

The use of GIS to chart COVID-19’s effects showed colleagues how location data could be used in analytics at DICK’S, Holden says. After map-based presentations, he and the team often field requests from coworkers asking if they can access the online GIS platform. “It’s neat to get more people involved and try and educate people a little bit in the geospatial world,” he says.

As markets recover, many consumers are anxious to get out of the house and engage in a little in-person retail therapy, making a fluid omnichannel approach a retail advantage. Thanks to its store-centered, location-smart strategy, DICK’S Sporting Goods will be ready with its doors open and its e-commerce channels thriving—serving customers however they choose to engage.

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