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What to Learn From Dick’s and Hibbett’s Winning 2021 Playbooks + How They’re Keeping Nike Happy

2021 has been an outstanding year for sporting goods retailers.

Hibbett Sports, Dick’s Sporting Goods, and Academy Sports and Outdoors all saw outstanding in-store and digital sales in 2021. In their most recent quarters, all three retailers reporting strong sales growth and raised their full year outlooks.

In a time of record high inflation and supply chain slowdowns, these retailers have managed to benefit from a surge in both the outdoor and athletic categories, driven by a consumer interest in activities such as hiking and running. They have also figured out how to best use their physical stores and have leveraged strong relationships with leading brands.

According to experts and analysts, other retailers in similar categories should take note of these strategies driving the growth.

For starters, sporting goods stores are seeing sales across in a range of footwear and apparel, thanks to a general wellness boom. However, in addition to clothes and shoes meant for sports and activities, these stores also sell comfortable apparel and athleisure items that can be worn at home as well, which is helpful for meeting all types of consumers on the activewear spectrum, said Neil Saunders, managing director of GlobalData.

In other words, these stores have managed to become a destination for the hiker as well as the stay-at-home worker who wants to be comfortable.

“For categories like sneakers there is also a strong element of fashion and desirability which is fueling growth – plus there is a very strong resale and trading market which is also boosting sales,” Saunders added.

Publicizing this wide array of offerings with an inclusive and diverse marketing strategy is also important, something Liza Amlani, principal and founder of consulting company Retail Strategy Group, said both Dick’s and Hibbett have excelled in.

“Other retailers in the athletic footwear space can learn from Dick’s and Hibbett by implementing a customer-centric strategy from merchandising to marketing,” Amlani said. “Getting closer to the customer by staying relevant and meeting the customer where and how they want to shop is critical. Aligning on values like diversity, inclusion, and sustainability will keep customers coming back.”

Another key advantage for these retailers is strong relationships with key brands such as Nike, Adidas, and Under Armour. This is even more important, as many of these leading brands end certain retail partnerships in favor of focusing on DTC channels.

For example, Dick’s — FN’s 2021 retailer of the year — has a strong connection with Nike via a supplier relationship and a new digital partnership.

“Dick’s is on the good list of most, if not all, key vendors,” said Williams Trading analyst Sam Poser in a note. “As such, Dick’s is getting key product well in a more timely manner than competitors, and will continue to do so into 2022.”

Hibbett also leverages a strong relationship with Nike and Adidas by focusing on selling to “underserved markets,” where there is less competition. This strategy, which helps it win over consumers that have fewer shopping options available to them, also drives value for its key vendors.

“We like that business model a lot,” Hibbett CEO Michael Longo said in a call with investors. “We prosper in that environment and we’re incremental and complementary to the major brands’ business as a result. And we think that’s a big part of what we do.”

In a call with investors discussing the company’s Q3 results, Academy Sports’ chief merchandising officer called out the company’s businesses Nike, Adidas, Under Armour, Columbia and The North Face, which he said “all had strong performance which would attribute to improving inventory positions, better content and more controlled distribution in the marketplace.”

On the other hand, retailers that fail to provide enough value to their key brands will likely lose share, as brands are more likely to allocate product to higher performing partners amid inventory shortages due to supply chain slowdowns.

“Only the most relevant and important players still in the game and retail partners must prove they are valuable by working closely with brands that have a very clear message,” Amlani said.

In discussing Foot Locker’s latest earnings, Poser said that Foot Locker is losing market share, as companies like Dick’s Sporting Goods, Hibbett, and JD Sports “appear to be getting more love than FL by the major vendors.”

“In the long term, we believe that Foot Locker will continue to shrink, and lose clout with Nike,” Poser said.
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