Bass Pro Shops (BPS Direct, LLC) Essay Assignment

Headquartered in Springfield, Missouri, BPS Direct, LLC is a privately held brick-and-mortar retailer of hunting, fishing, camping, and related outdoor merchandise. BPS Direct owns Cabela’s, White River Marine Group, and Tracker Marine Group. Founded in 1972, Bass Pro Shops recently opened up its new Angler’s Inn in Springfield, Missouri. BPS Direct is similar to Dick’s except BPS offers a full line of boats and boat motors.

Big 5 Sporting Goods (BGFV)

Headquartered in El Segundo, California, and founded in 1955, Big 5 Sporting Goods operates about 425 stores in the western United States only. The company has an e-commerce platform at the www.big5sportinggoods.com website. Big 5’s product mix is almost exactly like Dick’s, including athletic shoes, apparel and accessories, a range of outdoor and athletic equipment for team sports, fitness, camping, hunting, tennis, golf, winter and summer recreation, and roller sports.

Like Dick’s, Big 5 stores carry products from brand name manufacturers, such as Adidas, Coleman, Columbia, Everlast, New Balance, Nike, Rawlings, Skechers, Spalding, Under Armour, and Wilson. Additionally, Big 5 offers private label items including shoes, apparel, camping equipment, fishing supplies, and winter sports equipment. Big 5 sells private label merchandise under its own trademarks (Golden Bear, Harsh, Pacifica, and Rugged Exposure) and offers licensed trademarks brands (Beach Feet, Bearpaw, Body Glove, Morrow, and The Realm).

Hibbett Sports, Inc. (HIBB)

Headquartered in Birmingham, Alabama, Hibbett Sports is engaged in operating athletic specialty stores in small- and mid-sized markets primarily in the South, Southwest, Mid-Atlantic, and the Midwest U.S. Founded in 1945 and very similar to Dick’s except considerably smaller, Hibbett provides sportswear apparel, footwear, equipment, and accessories. Hibbett’s Sports Additions stores provides fashion-based merchandise assortment of athletic footwear, caps, and apparel. The Hibbett Team Sales, Inc. is a supplier of customized athletic apparel, equipment, and footwear primarily to school athletic programs. As of Fall 2018, Hibbett operates about 1,000 stores consisting of about 990 Hibbett Sports stores and 10 smaller-format Sports Additions athletic shoe stores in 35 states.

Industry Analysis

Sporting goods stores have outperformed many other retail stores in recent years as there is a growing number of health-conscious people. Participation in sports and exercise activities has slowly risen over the last 5 years and is expected to rise about 2 percent annually through 2023. A key group for the industry is children and young adults under 21 years of age. This group has experienced robust demand, likely creating a strong market of customers well into the future. In fact, about 50 percent of the market is customers 45 and under in age. However, even older people are significantly more active than their predecessors in years past.

Consolidation through acquisitions or bankruptcies within the industry has helped firms, like Dick’s, by eliminating competition. A reduction in the number of wholesalers who used to supply firms like Dick’s with many of their products are fewer in number, now allowing all firms in the industry to cut out this middleman and do business directly with the manufacturers. Overall, the industry is valued at over $50 billion annually.

The United States has a whopping 40,000 sporting goods businesses, including Dick’s and Bass Pro Shops, but also thousands of mom-and-pop bait and tackle stores located on small creeks, rivers, lakes, and coastal areas across the United States. The Internet is also a major player now, as many people purchase sporting goods and fishing equipment directly from China on eBay and other websites, often at bottom line prices.

The main drivers of revenue in the industry are not footwear or athletic apparel but rather sporting equipment such as exercise stuff, golf, team sport items such as football and baseball gear, hunting, fishing, and camping gear. In total, about 64 percent of industry revenues are derived from sporting equipment, while 17 percent is derived from athletic apparel. and 12 percent from athletic footwear. The remaining revenues are derived from various items including furniture and other items not directly used in sports or physical activity.

Omnichannel Strategy

Dick’s mission statement mentions its omnichannel strategy discussed. The term is simply a fancy way of stating the company sells its products through its website and through brick-and-mortar stores and has exposure to social media. Omnichannel strategies require that firms ensure they have excellent inventory tracking systems in place, ensure products are well described online rather than simply having a picture, use advanced data analytics to predict customer habits and desires, and finally ensure an efficient supply chain.

Online sporting goods sales are increasing rapidly, up 15 percent in 2017 by some accounts to over $400 billion in the U.S. alone. A recent study reported that 33 percent of men and 25 percent of women indicated they are considering purchasing their sporting goods and apparel exclusively online. In total, online purchases of sporting related goods is expected to increase 7 percent per year through 2021. Customers are increasingly using the internet to research products as well, not always purchasing online.

Dick’s partly relies on customers researching products on their website then coming into their stores to talk to sales staff and hopefully purchase the item. Firms like Amazon, who are still predominantly online, have the distinct advantage over firms with brick-and-mortar locations in being able to operate at higher margins and charge lower prices. Retail stores such as Dick’s, though, have the buffer in that many of their products customers want to try on before they buy including shoes, apparel, baseball gloves, bats, golf clubs, and even test out exercise equipment and bicycles, so maintaining an omnichannel strategy is vital for such retailers.

Shift to Markets Outside the United States

Although Dick’s is located 100 percent within the United States, many retailers are pushing their products and markets overseas as a growing middle class is developing in many emerging markets. Amazon for example earns over one-third of its revenues from outside the United States, and even legacy firms such as Staples, earn about 20 percent of its revenues from outside the U.S. However, despite robust sales from overseas markets, profit margins are generally significantly higher in the United States, and many firms struggle to turn a profit in their overseas operations.