RBTE 2017 interview: JD Sports on its outdoor store strategy

Stores remain integral to the future of the outdoor division at JD Sports, which operates the Blacks and Millets fascias, as the group develops a multichannel strategy driving complementary growth across the channels.

From an earlier total of 400 outlets the JD Sports outdoor estate has been reduced down to a selected 170 stores across the country, with massively varied footprints ranging from 1,000 sq ft to 50,000 sq ft.

Lee Bagnall, managing director of outdoor at JD Sports, says this has given the company a “tighter store estate”, which makes it much easier to run, while providing the confidence to expand the numbers of units up to a possible 220.

This belief in physical square footage stems from the fact the stores are integral to the group’s multichannel strategy, which has seen online driving in-store sales. “Blacks and Milletts previously struggled because of the cost of being on the high street. Only recently we’ve balanced it off through multichannel whereby driving up of online sales [through the likes of promotions] is now also increasing our store sales,” he says.

The smartphone phenomenon

This mutually beneficial situation is highlighted in the improved sales data, which shows online sales are higher in areas where there is a physical store. At the heart of this is the growth in the use of smartphones by customers – often in the stores, according to Bagnall. Three years ago, he says, search on mobile was 50% of traffic in contrast to sales that were a modest 20%, but this has shifted to the point whereby search and sales have both hit the 50% mark.

The use of their own technology by customers in-store is a beneficial trend because it potentially reduces the capital expenditure needed on the stores, which Bagnall says can amount to significant sums when you are dealing with a large estate of shops. However, he remains unsure about employees in stores using their own devices at work. 

When building the multichannel capability at the outdoor division, Bagnall says it has been very beneficial to be part of the larger JD group because he has been able to utilise the likes of technology, warehousing and the distribution infrastructure that is used elsewhere in the business.

“We pay for it as an outsourced service, but because it’s part of the same group we don’t have to worry about it. Because there are a large number of stores in the company we know that its [infrastructure] is pretty robust," he explains. "The warehouse management systems and tills are going to be robust. It’s a solid infrastructure.”

These are certainly being put to the test as the outdoor division develops its multichannel capabilities. Bagnall is grappling with the challenge of delivery and returns when selling a wide variety of sized products – some of which will not be handled by certain carriers.

The problem of returns

Returns are presently free to customers if brought back into a store but he questions whether this should not be changed and goods instead returned back to a central location by carrier: “The store has to handle these returns so there is a cost involved. It is hidden in the stores costs, but it’s still a cost. Maybe we should use a carrier and just say this is a cost to the overall business.” 

He acknowledges that there will continue to be such challenges ahead for the company but equally Bagnall is excited by the many potential opportunities. “People always do outdoor things so we just need to be their first choice when it comes to this area. We sponsor various shows and we’re still the number one and number two most recognised brands from a consumers perception point of view [in the outdoor category],” he says.


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