How Dick's Sporting Goods Became USA's Sports Retailer

How Dick's Sporting Goods Became USA's Sports Retailer

Dick's Sporting Goods, the largest sporting goods retailer in the United States, began with a small shop in Binghamton, New York in 1948. Let’s explore its journey!

Dick's Sporting Goods is at the forefront of the sporting goods retail industry and operates three subsidiaries, including Field and Stream, Golf Galaxy, and Public Lands. The company has made a name for itself by offering an enormous collection of sporting equipment from its vast range of private labels and specialty shops.

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Here are some recent facts from FY2020 that highlight the company’s leading position in the sporting goods retail industry:

  • Generated sales revenue of $9.48 billion
  • Posted a profit of $530.3 million
  • Owns assets worth $7.8 billion
  • Has a current stock price of $116.02
  • Runs 854 stores all across the United States
  • Employs a total of 50,100+ individuals

Dick's Sporting Goods continues to provide the best sporting equipment to athletes and sports enthusiasts all across the country. But, how did it become the largest sports retailer in the country? Let's find out.

A Bait and Tackle Shop is Born

One fateful day in 1948, an eighteen-year-old high school graduate decided to open a small bait and tackle shop in Binghamton, New York. The young man had struggled in his classes in high school and had barely managed to secure a passing grade good enough to graduate. But he was determined to prove himself and make a success out of his career. 

This is his story and the story of Dick’s Sporting Goods.

A Fisherman Turned Entrepreneur

Richard ‘Dick’ Stack found a job at an Army and Navy Supply store that sold all types of military gear from coats and boots to sleeping bags. But as WWII came to an end, the store’s owner Irv Burglass was aware that the demand for military equipment would fall. Hence, he decided it was time to introduce sporting goods.

Burglass knew that young Dick Stack was a fishing enthusiast. Hence, he asked him to prepare a tentative list of inventory that the store could introduce to attract avid fishermen. 

Stack went home and stayed up through the night preparing a list of the fishing equipment that he thought was essential for any fisherman. Unfortunately, when Burglass saw the list, he started crossing off items that Stack knew were essentials. Burglass even went so far as to say that Stack would never make a good businessman.

Well, that was the last straw as far as Dick Stack was concerned. The young man quit his job then and there and marched out. 

He decided to drop in and see his grandparents on his way home. When he told his grandmother what had just transpired, the old lady was so moved that she gave him $300 of her own savings to start an independent fishing gear store. 

That is how Dick's Army and Navy tackle shop was born.

The first shop was a modest affair on Court Street that sold fishing gear. 

Since fishing was one of Richard Stack's passions in life, he was very knowledgeable about the right kind of bait and other equipment. In time, his fishing expertise helped him build a loyal customer base.

Stack would also write all of the advertisements for the store himself and use his earnings to get the ads featured in prominent newspapers, such as the Press and Sun-Bulletin. An ad from 1953 is particularly remarkable and offers a good lesson in the value of some creative marketing. The advert reads like a breaking news story and warns of a fishing epidemic spreading through the town. The cure, of course, was to shop at Dick's and purchase the best fishing rods to indulge one's passion for fishing safely.

Here Come The Sporting Goods

By 1958, the store was doing quite well, prompting Stack to stock more sporting gear. 

The first thing he did was introduce hunting rifles besides the standard fishing equipment. The move widened his customer base, and more people began shopping at the store.

So many people were shopping at Dick's that new customers would find it difficult to find parking spots in front of the store. Thus, Stack moved his store to larger premises on Court Street itself. The new store was about five times larger than its predecessor and had parking for more than 300 cars.

Two years later, Stack expanded the store by purchasing two more plots on Court Street and re-named it Dick's Clothing and Sporting Goods. The new store was 5000 sq ft and had a floor-to-ceiling display window. 

Finally, Dick's went from a small corner shop to a full-fledged store with proper display cases. The revamped store sold fishing and hunting gear and new merchandise such as golf clubs, tennis racquets, bowling balls, and camping equipment. It also had a separate section for work clothes and men’s underwear. 

By the early 1960s, Dick's had become the leading sporting goods retailer in fishing and hunting gear in all of Binghamton.

However, the larger store posed other significant problems for Richard Stack. He needed to find a solution to the high overhead costs, such as the mortgage payments on the store. Hence, he leased a small space inside the store itself to a diner called Sports Mate. The partnership worked well for both entities because combining a sporting goods store and diner into one was rare. Hence, the place began to attract more customers.

In 1962, Stack also partnered with Acme Markets, a grocery store chain interested in opening a new branch in Binghamton. He rented out the eastern portion of his Court Street property to the chain to open a new grocery store. 

Together with the rental payments from Acme and Sports Mate, Stack was able to cover the mortgage payments on his own store.

Enter Edward Stack

Business continued well into the 1970s, but tragedy struck in 1977 when Richard Stack had to undergo emergency heart surgery. His son, Edward Stack, was an accountant at the time, but his father's deteriorating health made it clear that he would have to step in to save the family business. 

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The younger Stack had grown up in the store and had worked there in the summers since he was thirteen. He brought with him a vision: instead of running a single store, he wanted to build a nationwide retailing chain. 

When his dad officially retired in 1984, Edward became the next president and CEO of Dick’s Clothing and Sporting Goods. That same year he opened up another branch to kick-start his plan to establish a store chain.

Edward Stack also made plans to introduce more merchandise. As a teenager, Stack would have to buy his football gear from rival stores because his family store still focused mainly on fishing and hunting gear with a minimal selection of baseball or football equipment. Edward planned to rectify that immediately. 

Key Takeaway 1: Sustainable Businesses Require Smart Cost Management

Richard Stack started with just a small shop and steadily expanded into a proper store over the years. One of the main ways he was able to achieve this success was by effectively managing his costs.

For instance, he tapped into his creative side by writing and designing adverts himself. Along with knowing exactly what would draw customers to his store, it allowed him to save costs that would have been spent on outsourced marketing.

Later on, he also found intelligent solutions to his mortgage problems by striking up symbiotic partnerships with Smart Mate Diner and Acme Markets. It also meant additional space in his stores could be utilized and a more diverse customer base would be visiting these locations.

These strategies helped his business grow sustainably and simultaneously, expand its reach.

The Ambitious Expansion Plan

Edward Stack took some concrete steps to rectify the gaps in the store’s selection of sports equipment. Within two years, Dick's began to sell a complete collection of sporting goods that included everything from sports equipment to athletic clothing and footwear.

Dick’s Store Concept

Under Edward Stack, the new stores were modern and larger - spread over 35,000 to 45,000 square feet. 

The larger stores had a more comprehensive range of products and multiple categories under each product section. Dick's strategy was to keep prices down by ensuring more sales volume. This, in turn, allowed the company to offer the same quality products at a lower price than their competitors.

The interior of the new stores also had a very welcoming ambience with soft lighting and wood paneling. Each store was divided into multiple small stores with distinctive styles and concepts. For example, the hunting and fishing equipment was sold in a mock log cabin called the Sportsman’s Lodge. Aside from the specialty stores, Dick's also displayed clearance stock on highly visible racks in the store to attract bargain hunters to increase sales further.

It was also the first time Dick's Clothing and Sporting Goods introduced its private labels. It launched Northeast Outfitters for hunting and work apparel and Stone Hill Clubhouse for golf equipment. The company also launched DSX and DSXT for cycling gear.

However, the one thing that truly set the company apart from other sporting goods retailers was that Dick’s Clothing and Sporting Goods allowed customers to test the equipment on-site. The company built a driving range for golfers to test out new golf clubs and a running track for athletes in the athletic footwear section. Even the Sportsman’s Lodge allowed customers to test the equipment with an in-store archery range.

The strategy paid off, and Edward Stack's plans for expansion began to go into effect with the opening of two stores in Syracuse and another two in Rochester, New York. By 1992, new stores had begun to pop up in other cities besides New York. The first one opened in Cheektowaga, Buffalo, followed by two stores in Hartford, Connecticut. 

That same year, another store opened in Massachusetts and another in Pennsylvania. The company's growth strategy revolved around expansion in small and medium-sized cities. Consequently, in 1993 the company opened another store in Albany, a mid-sized city in upstate New York.

New Beginnings

While the chain had expanded dramatically from a single store in 1983 to twenty-two stores in four states in 1993, the headquarters had remained in Binghamton, Stack's hometown. 

However, a growing retail chain needs skilled employees and Stack found it challenging to attract fresh graduates to work at the company headquarters in small-town Binghamton. 

Thus, in 1994, Stack relocated the company headquarters to Coraopolis, Pittsburgh. As much as it pained him to uproot his family to resettle in Pittsburgh, Stack knew it was a strategic move that would help the business grow into a national sports retailer.

Hechose Pittsburgh for the new headquarters because of its proximity to international airports. Now, the chain attracted top talent to work at the headquarters. Furthermore, Pittsburgh was home to local sports enthusiasts, and the city had its own national sports teams. These factors would accelerate the growth of Dick’s Clothing and Sporting Goods in the years to come.

The company opened four new stores in Pittsburgh that year, ranging in size from 32,000 square feet to 70,000 square feet. The following year, the company opened six more stores in Cleveland, Ohio, and a few stores in Cincinnati and Youngstown. Dick’s also took advantage of the closure of rivals Herman's World of Sports to open up seven more stores in Ohio, taking the total count to fourteen.

Another strategy that Dick’s Clothing and Sporting Goods used to grow and generate higher sales was to open up stores in big shopping malls. The company opened up three stores in Baltimore, including a 60,000 square foot store in a shopping mall. Dick's preferred launching anchor stores in malls because they generally attract a higher footfall, a sure-fire way of generating more sales.

However, an expanding retail chain required capital. Hence, Edward Stack got busy searching for the right partners to take the chain forward. 

In 1995, Dick’s Clothing and Sporting Goods partnered with Carrefour, a French retail chain, and Donaldson, Lufkin and Jenrette, an insurance firm. These strategic partnerships helped Stack secure the necessary private investment that the company needed to open more stores. 

As a result, the company launched four new stores in Philadelphia and four more in Detroit. By 1997, the company was running 51 stores in total, with each store generating sales worth $10 to $12 million. The company was clearly ahead of its competition with rival stores not being able to exceed the $7.7 million mark in sales.

Key Takeaway 2: Understand What Attracts Customers And Employees

Edward Stack came into the business with a staunch focus on expanding the chain. For this, he undertook several steps. 

First, he identified gaps in the merchandise and worked hard to fill them, even going so far as to introduce the company's own private labels for cycling and golf. Next, he gave customers service that they did not enjoy elsewhere by offering them an opportunity to test the equipment before purchase. This meant that he was attracting customers with a wide variety of products and an unparalleled shopping experience.

Secondly, Stack knew that his growing chain needed a headquarters in a prominent location, so he could attract quality talent to join his company. Thus, he strategically chose Pittsburgh for its proximity to an international airport and sports teams.

Hence, by focusing on both the employee and customer side, Dick’s grew to more than 50 stores during this period.

Establishing A National Customer Base

The company reached one milestone after another, and the chain expanded considerably from that point onwards. 

By 1999, the company was operating 83 stores in the North-Eastern part of the United States in cities such as Pennsylvania, Ohio, and New York with plans to expand into the Mid-West, which would include Louisville, Kentucky, Indiana, and Illinois.

Partnership With Nike

Dick’s Clothing and Sporting Goods teamed up with Nike to launch the Women’s Concept Store, which gave female athletes and women in general more choices in sporting equipment and apparel.

Previously, sporting retailers had exclusively catered to men, providing a minimal range of sporting equipment for women. It was also something Stack had noticed as a teenager at his own family store. It had puzzled him as a teen, and it continued to puzzle him as CEO because women made up half of the customers in athletic stores. Not only were they searching for athletic gear for themselves, but they would often want sporting equipment for their children, so Stack resolved to set things right. 

The result was the partnership with Nike making Dick’s the first company in the entire industry to test this new trend.

Going Digital

Dick’s Clothing and Sporting Goods was also quick to catch onto the growing importance of the digital store as the number of internet users continued to increase in the country. 

In 1999, the company launched its official website on Super Bowl Sunday, which is the time of year when the whole country tunes in to watch the national football championship, so there is a high demand for sporting apparel and other gear. The website offered customers the same experience as the stores. Every product was categorized under its own specialty store, helping customers locate a specific product by searching the inventory by brand name and price. 

Due to the increased interest for sporting goods in light of Super Bowl Sunday and a user-friendly interface, the website could secure orders from cities all over the United States.

The company knew that their website was doing exceptionally well, but the goal at Dick's had always been to be better than before. So they kept refining and fine-tuning their website. They increased the number of products available online and introduced nineteen more specialty stores. The company also featured products from big brand labels such as Nike, Adidas, North Face, and Columbia Sportswear. Moreover, it rebranded itself as Dick’s Sporting Goods, and the revamped website reflected the name change. 

Dick's also ran a $15 million mega-advertising campaign on national T.V channels such as ESPN and CNN and offered discount coupons in a bid to establish a nationwide consumer base.

The campaign was a success, and Dick’s Sporting Goods achieved a higher sales volume compared to the industry average. The same year, it generated a total revenue close to $728 million. Unsurprisingly, Edward Stack was named Retail Entrepreneur of the Year.

Upgraded Stores & Better In-Store Services

The early 2000s was a period in the company's history that holds invaluable lessons on attracting customers and keeping them coming back. 

In 2001, Dick's Sporting Goods introduced the 'Scorecard,' an early version of the present-day loyalty and points system. Under the new system, customers were awarded discounts based on the number of previous purchases. The Scorecard program was so successful that over a million customers signed up for it in 2002. 

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Dick’s also focused on improving the quality of customer service in all its stores. The company simplified the shopping experience for hunting and fishing enthusiasts by offering licenses in stores, effectively turning Dick's into a one-stop-shop for all customer needs, from equipment and apparel to licensing documents. 

The company also invested in new technology to improve its service. For instance, it introduced swing speed analyzers in its golf section so that customers could try out different golf clubs and compare their performance.

The company also launched a new mega-store in Pittsburgh which was spread over an area of 80,000 square feet. The ceiling was 60 feet high, and the walls were lined with red brick to give the store that classic sports stadium ambiance. The upgraded stores focused on providing services and products that would cater to the whole family's needs, including children. The company drastically expanded the women's and children's sections and added a more comprehensive range of merchandise. It also introduced a private label for women’s apparel called Ativa and one for men called Walter Hagen.

Dick’s also continued to play its cards wisely by opening more stores in smaller cities where competition was not as fierce as in larger, metropolitan areas. The company strived to become the go-to store for all sporting equipment in these small towns. 

It also kept its costs down by outsourcing tasks. For instance, it hired a truck service to handle product distribution. It handed over the running of its official website to Global Sports Interactive (GSI), an online platform specializing in sports equipment retail. The partnership proved to be mutually beneficial as Dick’s Sporting Goods received stocks in return for featuring its products on the GSI platform.

Key Takeaway 3: Take Initiatives To Expand Consumer Base

Dick's Sporting Goods believed in being the trend-setter in the sports retail industry by testing bold new ideas. It was the first to introduce sporting equipment for female athletes on a large-scale well before any of the competition picked up on the same strategy. The company also launched a well-designed official website as early as 1999 and kept upgrading it to increase sales. 

Furthermore, Dick's Sporting Goods prioritized the customer by upgrading its stores and services according to customer expectations. It initiated a loyalty program that offered discounts to regular customers making sure they would return time and time again. 

Thus, the company experienced significant growth from its various all-round initiatives and was able to capture the online as well as the female market.

Dick’s Sporting Goods Today

In 2009, the company finally made it to the Fortune 500 by clocking in $4.4 billion in sales. But Edward Stack and his team were just getting started. 

In the words of the top management and Stack himself, “Dick's is not just a sporting goods retailer.” Far from that, the team at Dick's thought of themselves as athletes who are constantly training to perform better than their last game. This competitive work ethic served the company well, especially in the last twenty years when many of its rivals went bankrupt.

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Staying On Top Of Market Trends

While other sports retailers, such as Herman’s and Decathlon, struggled, Dick’s Sporting Goods has always come out on top. The retailer also faces stiff competition from industry giants such as Walmart and Target, which sell sporting gear at highly discounted prices. However, Dick's has always managed to hold its own by sticking to what it does best, and that is pleasing its customers.

The company has always catered to sports enthusiasts' needs with the best customer service and a diverse range of products in each sports category. Moreover, it ensures that it provides merchandise for the whole family, which is why athletes and their families have always chosen Dick's over any other sports retailer.

The people at Dick’s also understand the importance of timing and location and how that influences consumer behavior. The preference for sporting gear varies enormously from state to state. Fishing and hunting enthusiasts in Texas require a specific kind of fishing equipment to reel in bass and catfish. At the same time, fishermen over in the Chesapeake Bay need equipment for saltwater fishing which is an entirely different ball game. Dick's Sporting Goods has always been sensitive to regional preferences and has stocked its merchandise accordingly.

Nothing sits on the shelves for long at Dick's. The company constantly monitors shopping patterns and re-stocks its stores in line with consumer behavior. Customers in Florida buy a lot of baseball gear before winter arrives down south, but in Buffalo, people do not want baseball equipment until Easter. By keeping track of these patterns, the company always stocks just the right amount of equipment at the right time.

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Dick’s Sporting Goods has always upgraded itself with changing market trends. In 2013, the company decided to sell its fishing and golfing equipment at an independent subsidiary named the Field and Stream Store. As of 2020, there were twenty-two Field and Stream stores in the United States.

A Business With A Mission: How Dick’s Has Always Stood Up For Its Community

Dick’s Sporting Goods is not the average sporting goods retailer. The company has always stepped up to the plate and gotten involved with the community. In 2014, Dick's Sporting Goods Foundation pledged $2 million annually to sponsor youth programs through its Sports Matter program. As of 2020, hundreds of thousands of youth athletes have benefited from the youth initiatives led by the Foundation. Dick’s has committed to running a campaign to ensure deserving kids from underprivileged backgrounds have improved access to sports. 

In 2016, Dick’s Sporting Goods became the official sponsor for all sporting goods for the U.S Olympic and Paralympic teams. But Dick’s always believes in going the extra mile and partnered with the Olympics Committee to employ returning Olympians at 89 of its stores across 32 states in the country. So far, the company has recruited almost 200 Olympians and demonstrated how much it values top athletes as a national asset. 

But Dick's commitment to its people does not end there. The company has repeatedly shown that it is not out there to generate profits but also to do what's best for the community. In 2018, Dick’s Sporting Goods announced that it would no longer sell assault-style weapons in the face of increasing mass shootings in the country. It was a move no other company in Dick’s position had dared to take. Edward Stack knew that the backlash would be immense, and he would lose many regular customers. Not only did these customers buy weaponry, but they also purchased baseball bats and gloves.

But the company was determined to take a principled stand on this issue. Rather than fear losing customers, the company redoubled its efforts to win over people by focusing on superior service and revamped stores, and it paid off as customers began to pour in. Many customers supported Dick’s decision to remove weapons and started a ‘buycott’ encouraging their friends and families to shop at Dick’s.

The Future of Dick’s Sporting Goods

So, where is Dick's Sporting Goods heading today? 

The company excels at what it does and has several ambitious plans underway. Although the COVID-19 pandemic has taken its toll on the industry in general, Dick’s Sporting Goods is determined to keep its stores alive by coming up with fresh store concepts.

The company launched it's first 'House of Sports' concept stores in New York and Tennessee in 2021. These stores are a larger version of the standard Dick’s stores and have an outdoor turf and field track which can be used as a skating rink in the winter. 2021 was also the year the company launched its Public Lands stores, promoting outdoor recreation such as hiking and bicycling. The new stores are ideal and provide a safe venue for sports enthusiasts to enjoy their favorite games and test out new merchandise in a socially distanced manner.

Recently, Dick’s Sporting Goods has teamed up with power couple Allison Holker and Stephen tWitch Boss to develop a new line of sports apparel called DSG. The new product line is geared towards families who are enthusiastic about sports. It will feature products that are inclusive and mindful of people of all body types and sizes.

Key Takeaway 4: Establish A Customer-Friendly Brand Identity

Dick’s brand continues to meet new challenges head-on while never forgetting its commitment to its community and customers. 

The company has initiated multiple programs to empower youth through the power of sports and launched a recruitment drive to hire former Olympic athletes. 

It also continues to innovate its store concepts by adding new features and services that help customers have the best sports shopping experience in the whole world.

Summary & Key Strategic Takeaways

Dick's Sporting Goods is the only national sporting goods retailer in the United States that is driven to deliver customers high-quality sports equipment along with superior customer service.

With its own private labels and partnerships with some of the world's leading brands, the company aims to provide the best products to its customers that cannot be gotten elsewhere. 

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Growth By Numbers

 

2020

2010

Sales

$ 9.48 billion

$ 4.87 billion

Net Income

$ 530 million

$ 182 million

Share Price

$ 116.02

$ 27.9 

Employees

50,100

25,200

Key Strategic Takeaways

  • Rebrand With Changing Consumer Preferences

Dick's Sporting Goods has come a long way from being a bait and tackle shop. The company has remodeled itself in line with shifting consumer tastes right from the start. It transitioned away from fishing and hunting gear and introduced sporting goods such as baseball and football equipment. 

In 2013, the company knew that athleisure was a strongly growing trend, and interest was waning in fishing and hunting equipment. Hence, the company allotted more floor space to sports apparel and footwear. However, it did not do away with its fishing and hunting lines and established an independent subsidiary called Field and Stream that would serve the needs of serious hunting and fishing enthusiasts.

By aligning itself with consumer preferences, Dick's has ensured that people are pleasantly surprised when they come into the stores and find out that the company offers products and services that they didn't even know it had. The company knows that the most effective marketing strategy is satisfied customers who will bring in more customers through word of mouth.

  •  Prioritize Customer Service

The customer has always been the first priority at Dick's Sporting Goods. The brand is well aware that its rivals, including Walmart and Target, sell sporting equipment at lower prices, but they have managed to set themselves apart by offering customers impeccable service. 

It builds trust within its customers by hiring staff that is very knowledgeable about sports equipment, such as former athletes. The company also has many in-store services, such as a virtual golf range and a race track so that customers can test out every product before finalizing their purchase.

  • Focus On The Store Concept

Edward Stack has always paid close attention to his store concepts and continued to revamp the layouts and services over the years to provide consumers with a unique shopping experience. 

From building stores that resemble stadiums to stores with their turf and track fields, Dick’s always provides exclusive opportunities for customers and athletes alike. The outdoor fields in the new stores are ideal for hosting multiple community events and sports competitions that empower people, especially the youth, who get to shine at these events and hone their skills to become better athletes. The stores offer multiple sports classes and are the go-to spots for sports enthusiasts in bad weather when they cannot play outdoors.

Another factor that has set Dick's apart from other retailers is that its stores have multiple specialty shops that offer a vast range of products in each sports category. This strategy has allowed the company to compete with more high-end and exclusive specialty stores in the country.

  • Develop Your Own Products

Starting in the 1980s, the company has always focused on establishing its own private labels. Over the years, it has introduced multiple brands ranging from separate sports apparel lines for men and women to its own cycling, golfing, and footwear brands. 

This strategy has allowed the company to decrease its reliance on national brands in favor of its own private labels.

 In 2017, the company reportedly ended 20% partnerships with outside labels to promote its own brands such as Calia, a women's apparel line, and VRST, which is an athletic apparel line for men. The collaboration with the Bosses on the DSG line is the newest addition in Dick's collection of private labels that have been a good source of profit for the company as they generate many sales.

  • Serve The Community

Finally, the company has always aligned its business practices with community needs instead of focusing all its energies on generating profits alone. It has initiated multiple youth empowerment programs through the Dick’s Sporting Goods Foundation by donating millions of dollars so that young people have a chance to grow and succeed by becoming successful athletes.

In line with these community-centric goals, the company also holds sports classes and community events at its stores. It employs athletes and Olympians as brand ambassadors and staff who help customers choose the best sports equipment according to their needs.

Dick’s Sporting Goods has never been afraid to take tough decisions to protect its community, even if it has meant angering certain groups. The company took a firm stance on the issue of mass shootings and stopped selling assault weaponry at its flagship locations to do its part in keeping people, especially children safe from such traumatic incidents.

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