The sports retail industry is being confronted with unprecedented change. Technological advances, changing consumer spending patterns and economic turmoil means that the sports retail landscape is changing quicker than some retailers (and brands) are able to react.
Today’s consumer has vastly different and more sophisticated expectations of product, service, value and environment than five or even three years ago.
In the new multichannel reality, the boundaries between virtual and physical space are becoming blurred and retailers are being forced to question the role and function of stores in an environment where their relevance to the connected consumer is increasingly subject to challenge.
Whilst the role of the store is undoubtedly changing most commentators are not predicting the demise of the sports shop, however is is highly likely that the “Sports Shop of the Future” will look rather different from those we see today.
Todays shopper has vastly different expectations from the shopper of yesteryear and, in order to survive, the UK sports retailer must understand and embrace these changing expectations.
The solution will not be the same for every retailer, but those who fail to realise the fundamental transformation required may struggle to survive.
Ian Geddes, Partner, UK Retail for Deloittes comments;
“The store becomes a brand and product showroom – Retailers need to re-define the store proposition and identify how they can best address the changing customer needs within the four walls of the store. Going forward, the store needs to be an embodiment of the brand and a ‘destination’ for consumers where they can do much more than simply browse and transact; it will no longer operate as a silo but as an integral part of the multichannel experience.
As fewer stores are required, the store portfolio needs to be reset – As the traditional retail model changes, retailers will need to reassess their store portfolios. The increasing costs of operating stores, changes in consumer behaviours and the growing online opportunity suggest that retailers will need fewer stores in future. Over the medium to long term we will see significant downsizing of store portfolios. This will vary markedly depending on the retailer’s category but reductions by as much as 30%-40% are foreseeable over the next 3-5 years.
Ripple effects will be felt throughout the organisation – The changing role of the store has far reaching implications both within the four walls of the store as well as for the overall retail organisation. Fundamental changes will need to be made across the organisation in all functions in order to support the operation of the store of the future.
In this new reality, incremental adjustments to the store format and portfolio will no longer be sufficient to survive, a radical rethink of the purpose of the store in the consumer shopping journey and the number of stores required to reach the consumer is necessary.”
So what are those changes likely to be and what will the future sports shop really look like?
In a truly mulitchannel world the sports shop will become a complex relationship between the retailer and consumer looking, perhaps, more like a brand and product showroom with revenues being driven across all retail platforms and channels.
The Sports Shop will need to redefine itself as a destination – think apple store meets the sports trade.
Its is already apparent that those retailers that are embracing this change are seeing the advantages. Specialist retailers offering a wide selection of products, excellent service and the ability to interact through social media and ecommerce continue to perform on an otherwise challenging High Street.
Staff Product knowledge becomes key– Deloitte research shows that conversion rates increased 9%6 when customers were assisted by employees who possess a high degree of product knowledge and demonstrate strong interpersonal skills.
The better the advice the more likely the consumer will (a) return and (b) recommend
In store technology becomes vital – consumers will demand immediate access to product information through their mobile devices through interactive experience such as bar code scanning to augment their product and brand information.
Connected stores for connected customers – with the demands outlined in the previous point the sports shop of the future will need to offer wi-fi as a matter of course as retailers follow the lead taken by coffee shops and hotels.
Independent retailers will face more competition from the sports brands themselves.
As the barriers between retailer and brand become blurred more stand alone branded retail environments will emerge leveraging the brand marketing to maximum effect and allowing the shopper to become fully emerged in the brand experience.
Against this backdrop retailers will need to work hard to drive profitable growth and need to think hard about the demands of their local customer base and how they can maximise their appeal and improve their interaction with them.
Without a local social media strategy the retailer will begin to lose touch with the core market.
New technology will emerge to assist the consumer and the sports shop of the future must keep up with these changes.
The shop itself is no longer the sole touch point for a shopper and the importance of multi channel options will become increasingly vital.
The solution will not be the same for every retailer, but the impact will be felt throughout the organisation.
There are winning propositions out there but, in particular, the sports independent must address these changes now. The rules of the game have now changed and what worked in the past cannot and will not work in the future.