Businessmodel of Dick’s Sporting Goods

Customer Segments

Dick’s Sporting Goods operates a chain of retail stores that sells products directly to the consumer market.

The Company’s core retail chain stocks a catalogue of products targeted at consumers that participate or have an interest in various sporting activities, offering relevant equipment, apparel and footwear. Its catalogue includes products for men, women, and children, with some sports suggesting that the Company in particular targets families, as families typically purchase more sporting goods. Additionally, Dick’s Sporting Goods operates retail chains dedicated to the sale of golfing, and hunting and fishing products, that specifically target consumers interested in these pursuits. Dick’s Sporting Goods also caters to corporate sales, fulfilling bulk orders of equipment and apparel for schools, teams, and community events.

Dick’s Sporting Goods’s principal market is its native US, which accounts for the vast majority of its sales. The Company also an international presence, with subsidiaries in Canada, Hong Kong, and China.

Value Propositions

Dick’s Sporting Goods provides value to its customers in the following ways:

• Its industry standing and reputation, with the Company established as one of the leading sporting goods retailers in the US, and having one of the most recognisable brands in its industry;
• Its domestic sales reach, with the Company operating an extensive retail network, its flagship chain spanning 644 stores across 47 US states, and its other chains operating a further 92 outlets across the country
• The breadth of its product offerings, with the Company stocking an extensive range of sporting products, including apparel, equipment, and footwear, as well as hunting and fishing gear, from well-known brands and private brands; and
• Its accessibility, with the Company operating digital sales channels, including its various websites, and its mobile applications. ### Channels

Dick’s Sporting Goods operates a website at www.dickssportinggoods.com, through which it provides information on its various products and locations. The Company also operates an online sales channel, through which customers can browse products, place orders, and schedule deliveries. The Company’s Field and Stream and Golf Galaxy chains also operate similar online sales channels at www.fieldandstreamshop.com and www.golfgalaxy.com respectively. Additionally, the Company offers mobile applications for its stores on iOS and Android devices.

Dick’s Sporting Goods makes the majority of its sales through its network of physical retail outlets, comprising 644 Dick’s Sporting Goods stores, 73 Golf Galaxy stores, and 19 Field and Stream stores across the US. This includes combo stores, whereby the Company operates two adjacent stores on the same property with a pass-through for customers. The Company employs a large sales force across its stores that serve customers directly, including telephone sales staff. Dick’s Sporting Goods has the capacity to ship online and telephone orders directly from its retail stores, primarily through third-party distribution companies.

Customer Relationships

Most of Dick’s Sporting Goods’s products are available to consumers on a self-service basis. Customers are able to browse products, place orders, schedule deliveries, and manage account information through the Company’s three online stores without interacting directly with members of the Company’s sales and support staff.

Across its multiple retail chains, Dick’s Sporting Goods employs well-trained sales staff that are able to assist customers directly, advising customers on various products, handling complaints, and answering questions. The Company seeks to provide high-quality customer care, with a view to encouraging repeat business.

Dick’s Sporting Goods also provides support and information to customers through its website, including details of the Company’s returns process, FAQs, and sporting tips. Customers are also able to contact members of the Company’s support personnel over the phone and via an online chat service, as well as through the Company’s various social media accounts, including with Facebook, Twitter, Pinterest, YouTube, and Google+.

Key Activities

Dick’s Sporting Goods is an omni-channel sporting goods retailer. It sells a catalogue of sporting goods, spanning sports equipment, apparel, footwear and accessories, primarily through its specialty retail stores in the US.

The Company also owns and operates Golf Galaxy, Field & Stream and other specialty concept stores, and operates online and mobile sales channels for its flagship Dick’s Sporting Goods chain, as well as for its Golf Galaxy and Field and Stream chains, which respectively sell golfing equipment, and hunting and fishing equipment.

Dick’s Sporting Goods operates approximately 640 Dick’s Sporting Goods stores across the US, 73 Golf Galaxy stores, and 19 Field and Stream stores. Each of its Dick’s Sporting Goods stores includes footwear, team sports, outdoor lodge, golf, fitness and athletic apparel.

Key Partners

Dick’s Sporting Gods has partnerships with a number of companies and organisations that support and supplement the Company’s operations. These partners can be broadly categorised as follows:

• Supplier Partners, comprising merchandise suppliers that provide products and services for resale across the Company’s retail outlets, and non-merchandise suppliers that provide goods and services for use within the Company’s stores, distribution centres, or store support centres;
• Distribution and Delivery Partners, comprising various third-party package delivery providers and distribution companies that assist the Company in completing online and telephone sales; and
• Community and Social Partners, comprising various non-profit and charitable organisations with which the Company collaborates on joint social and community projects. Dick’s Sporting Goods serves as the Official Sporting Goods Retail Sponsor to the USOC and Team USA teams, and is the Official Sporting Goods Retailer and Tournament Sponsor of Michigan State Youth Soccer Association. The Company has also agreed an exclusive retail partnership with CALIA, a sporting apparel brand backed by Carrie Underwood.

Key Resources

Dick’s Sporting Goods’s key resources are its catalogue of products and supply chain, its physical network of retail outlets and distribution centres, its online and mobile sales channels, its intellectual properties, its IT and communications infrastructure, its partnerships, and its personnel.

Dick’s Sporting Goods owns and leases numerous properties, including 741 retail outlets, four distribution centres spanning a combined 2.86 million square feet, and a store support centre that occupies approximately 670,000 square feet.

Dick’s Sporting Goods owns number of registered service marks and trademarks with the US Patent and Trademark Office, including marks for “Acuity”, “CALIA”, “DBX”, “Dick’s”, “Dick’s Sporting Goods”, “Field and Stream”, “Fitness Gear”, and “Golf Galaxy”, among others. The Company also has a number of registered domain names, including “dickssportinggoods.com”, “DICKS.com”, “golfgalaxy.com”, and “fieldandstreamshop.com”.

Cost Structure

Dick’s Sporting Goods incurs costs in relation to the procurement of products and supplies, the operation and maintenance of its physical retail outlets, the development of its online and mobile platforms, the maintenance of its IT and communications infrastructure, the distribution of its goods – including through third-parties, the management of its partnerships, and the retention of its personnel.

In 2015 Dick’s Sporting Goods accrued cost of sales in the amount of $5.09 billion, principally comprising the acquisition of merchandise. The Company recorded selling, general, and administrative costs – including the payment of salaries and benefits to its workforce of 13,100 full-time and 24,100 part-time associates – totaling $1.61 billion.

Revenue Streams

Dick’s Sporting Goods generates revenue through the sale of sporting goods across its flagship Dick’s Sporting Goods chain, as well as its Field and Stream, and Golf Galaxy chains. The Company’s sales are organised into four product categories:

• Hardlines, including items such as sporting goods equipment, fitness equipment, golf equipment and hunting and fishing gear;
• Apparel, comprising sports clothing and accessories;
• Footwear, comprising various forms of athletic footwear; and
• Other, comprising non-merchandise sales categories, such as in-store services and shipping revenues. In 2015 Dick’s Sporting Goods recorded net sales of $7.27 billion, up on the $6.81 billion generated by the Company in 2014. Approximately 45% of the Company’s net sales were attributed to the Hardlines category, with 35% attributed to Apparel. Footwear accounted for 19% of net sales.