Intersport and Sport-2000 Unfold On-Line Strategy
MUNICH, Germany – Due to increasing competition from webshops like Amazon, Zalando and others the German sporting goods buyers groups Intersport and Sport 2000 introduced new retail concepts at the sporting goods show ISPO-Munich earlier this month. The concept of jointly purchasing and selling separately isn’t enough anymore to compete with webshops, concluded both organizations.
This strong growth of on-line sales has changed retailing completely and both Intersport and Sport-2000 are aware that they will have to reorganize their traditional structure of a buyers group model into a digitally-minded retail organization.
Disappointing 2016 results
At the ISPO show In Munich both the associated Intersport ‘Sechs-Länder-Verbundgruppe’ (six-nations group) and Sport-2000 Germany reported a minor 1% sales increase last year compared to 2015. A poor result for the ‘event year 2016’ with the Olympics in Rio de Janeiro and the European soccer Championships in France. The Intersport ‘six nations group’ consists of Intersport-Germany and Intersport-Austria with its licensed country markets Czech Republic, Hungary and Slovakia as well as independent Intersport-Poland which is partly owned by the German Intersport head office.
Both sporting goods associations pointed on the slow winter season 2016. The sales drop in the early months of 2016 could not be made up during the rest of the year. Intersport Verbundgruppe chairman Kim Roether also referred to the fluctuations of the euro as well as poor Christmas business. This all led to a disappointing overall result.
Searching for new horizons
The positive news is that these results lead to more innovation. Both Intersport and Sport-2000 announced during ISPO Munich that from now on they are especially investing in digital solutions.
According to Kim Roether, “they will be working on the largest renovation in Intersport’s history for the next 36 months. It’s all about getting digitalization and sharing intelligent data sharing with the organization. We have the power to change and invest in the creation of a digitally-minded retail organization, all for the benefit of our members.”
In this year’s third quarter Intersport will launch a new cooperative dealer platform. The services division will start to promote data-analysis. Moreover a new shop concept as well as a new sales system is being developed. “All in all we are investing a total of approximately 40 million euro in the expansion of our logistics at our headquarters in Heilbronn. In 2018 we want to launch a state-of-the-art high-bay warehouse with a transshipment area of close to 10,000 square meters”, stated Roether in Munich.
Sport 2000-Germanys new strategy goes in the same direction. Sport-2000 marketing manager Hans Allmendinger explained that, “we have to open up for radical changes and transformation. The project is called ‘Digital Shift – Straight Talking’. The traditional dealers must be able to renew themselves and be able to count on their organization.”
According to Sport 2000-Germany GM Hans-Herman Deters, “as a buyers group we have to raise awareness among our retailers for the need of a digital transformation, higher sales price and a higher risk tolerance.” In other words ‘customers expect the same from off-line shops and webshops.’ Deters also pointed on, “current pilot projects like radio-frequency identification (RFID) or digitally recording of customer satisfaction are all for the benefit of the sales in the Sport 2000 stores.”
Social Media Tool
Social media will play a key role within this new strategy of the buyers groups. “Through social media such as Facebook and advertised coverage we can make our marketing efforts more efficient because we addresses each target group on their own interest,” said Allmendinger. “With these social media tools we can make life easier for our dealers, deliver them interesting content and provide locally target group-oriented marketing campaigns.”
Advantage for retailers
Both buyers groups are confident to be able to compete successfully with rising online giants such as Amazon and others as Kim Roether’s stated “to create the online part of our business is a huge step. But for others it is even more difficult to build-up a complete network of ‘bricks and mortar’ shops. This is our main opportunity.”
When the strategy of the sporting good buyers groups proves successful it might also work for others in, for example the bicycle industry. Market leader ZEG already outlined its digital strategy while Bike & Co. will surely benefit from the current transformation process of its partner Sport-2000.