What can retailers do to push back against the rising tide of online shopping and declining physical store visits? For Sport Chek, the answer is clear: fight fire with fire.
The sports gear and clothing chain is in the midst of transforming its presence across Canada with new mega-stores that make heavy use of gadgetry, telemetrics and sensors, all of which are designed to entice shoppers out of their homes and back into the malls.
To that end, the chain opened its second flagship store in the Metropolis at Metrotown mall in Burnaby, B.C. last week. It’s a giant space – 48,000 square feet, or nearly a football field full of skis, golf clubs and jerseys.
The store incorporates more than 190 screens, 60 tablets and 100 computers, with a five-foot-wide interactive “community hub” touch-screen at the entrance. Through an in-store community manager, customers can sign up to have their local events – say a ski or running club – advertised on the hub. They can also share photos of their events or competitions for display on monitors throughout the store.
“We want to move away from a transactional relationship toward a much more interactive relationship with the consumer,” says Eric Watt, flagship lead for Sport Chek. “Consumers today are much more informed. Online is their first point of reference. For us, flagships are a support to that.”
It’s getting increasingly tough for many bricks-and-mortar retailers to compete with e-commerce. Better prices online and the time savings in not having to go to a mall are resulting in what many analysts are calling a long-term, irreversible trend.
Online is expected to result in 11 per cent of all U.S. retail sales by 2018, up from 8 per cent in 2013, according to Forrester Research, with similar trends in Canada. In the United States, physical retailers got only half the holiday traffic in 2013 that they did just three years earlier, according to analytics firm ShopperTrak.
Many retailers are enacting defensive strategies as a result, such as in-store pickup of online orders or the reverse – “showrooming,” where customers can try products before buying them online.
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Sport Chek executives don’t believe their approach is defensive given the nature of the products they’re selling. Besides flashy screens and efforts at community building, the flagship mega-stores – such as the first, an 80,000-foot space in the West Edmonton Mall – are also geared toward product performance and customization.
The new Burnaby store, for example, has a treadmill with high-speed cameras that can measure a customer’s running gait and then recommend the proper shoe. Driving and putting simulators can also help suggest correct golf clubs and balls, while silicon foot molds can make custom ski-boot insoles.
“It’s about what are you creating that consumers can’t get online?” says Paul Reid, vice-president of operations for Sport Chek. “It’s about how you can differentiate yourself from those true-play retailers or e-comm retailers that are just going to sell you a product and get it to you quick.”
The approach seems to be working so far. Same-store sales have seen double-digit increases for five years, with most of that coming since the 2011 acquisition by Canadian Tire of Forzani Group, Sport Chek’s parent.
Some of the improvement is the result of the shuttering of several of Forzani’s others sports-oriented retailers, such as Athlete’s World, which has consolidated sales into the Sport Chek brand. But executives – who decline to say how much of an investment the new stores are requiring – are convinced the move toward bigger and more technological outlets is also the right one.
Sport Chek is planning to grow to 300 stores from its current 190 over the next few years, with 17 slated for next year. Many of the new outlets will be of the giant flagship variety, with a focus on Ontario and British Columbia.
Next up is an attempt to reinvent online delivery. The chain’s virtual store in Toronto’s Maple Leaf Square – essentially an online ordering kiosk – is experimenting with faster delivery times. The idea is to supply customers who order products before 1 pm with same-day delivery.
“There’s no reason why the pizza industry has the market cornered on half-hour delivery. We have to figure that out,” Reid says.
“If you’re solely about product, you’re replaceable in the minds of consumers,” adds Matt Dellandrea, manager of product training.