Playing in the middle never seems to work very well for corporate brands, and the story nearly always ends with a “Going Out of Business Sale.”
Sports Authority closing its doors reminds me of the days when other once famous retailers announced they were going out of business – customers showed up early the following day waiting in line to buy whatever remained on the shelves at deep discounts. From my experience and from what others have expressed, it would be easy to conclude that the primary reason Sports Authority failed was because of subpar customer service. However, I believe the reason goes deeper.
I believe Sports Authority failed because it had a blurry brand and hence, forced to play in the middle, and didn’t do anything very well, or better than any of its competitors. The company was a small step up from what Walmart or Target offered customers, but it wasn’t as good as Dick’s Sporting Goods or some of the higher-end sporting goods retailers that targeted different specific interests such as REI for camping, biking, scaling mountains and higher-end apparel, and Cabela’s for hunting and fishing enthusiasts that also sold higher-end apparel. Online retailers like amazon.com were also winning market share from Sports Authority.
In the big box sporting goods retail space, Dick’s Sporting Goods would be perceived to be a close competitor to Sports Authority. However, there are some rather significant differences which explains Dick’s success versus Sporting Authority’s failure. Two factors, both focusing on the customer experience were referenced in a recent article published in Forbes:
- Include Store-Within-A-Store-Shops: Dick’s is partnering with major sportswear brands to offer store-within-a-store shops. Its Nike Field House and Under Armour All-American stores not only serve as destinations that increase store traffic, but also offset operating costs, as the brands pay for some of the interior design and fixtures. The approach has proved to be so successful, Dick’s has plans to test Nike Air Jordan and Polo Sport store-within-a-store concepts.
- Open New Store Formats: To address rising real estate costs and declining appeal of big box store environments, Dick’s is experimenting with smaller, specialty stores. It has opened around 20 Field & Stream stores, focused on hunting and fishing gear, next to existing Dick’s locations. And last year it opened a standalone Chelsea Collective store targeting the female customer.
The walk-in retail industry isn’t going away anytime soon, even with amazon.com selling anything one can think of that can now be delivered in some markets on the same day. People still want to walk into a building staffed with knowledgeable salespeople where they can ask questions, touch and see products and have them in their hands as they leave the store. I don’t think that desire will ever go away. What we are witnessing is retailers who have figured out that customers want an experience and a destination, and that they are willing to pay a little extra for the human-to-human interaction with a trained person on the floor. When you reflect on brands that no longer exist, such as Comp USA, Circuit City, Linens ‘n Things and Borders, you will probably recall they didn’t take their game high enough to be able to successfully compete.
I suppose you could think of all these “playing in the middle” retail failures as the natural way for the industry to cleanse itself.