Dick’s Sporting Good’s CEO Edward Stack recently told Wall Street analysts, in the second quarter earnings call, that he expects the company’s eCommerce channel will be more profitable than their brick and mortar stores by 2017. He went on to say that they are putting a huge emphasis on their online distribution channel and will continue to do so for the foreseeable future.
Stack attributed the success of the eCommerce channel to the way they leverage it with their 574 retail stores, including their “buy it online, pick it up in the store” program.
Interestingly though, eCommerce represented only 6.3% of their total sales, up from 5.6% in the second quarter of 2013. While there will certainly be a lot of ground for their web-based store to cover, their predictions match overall observations of increased online purchasing.
Overall, this particular case reiterates that large marketing dollars should be spent to optimize your online experience for users. The profit margins are simply too large to ignore. From this we can also learn that if we do have brick and mortar stores, we need to integrate them with our online channel as best we possibly can.