Why Can Decathlon Become The Leader Of Sports Brand?

IKEA, known as the "IKEA" in sports, has been growing steadily in the era of electricity supplier. Its turnover is over 80 billion in the global year and 10 billion 500 million in the domestic market.

At present, it has over 1300 stores all over the world, becoming the leader of sports brand.

In 2017,

China's newly opened 52 shopping malls, with a turnover of 10 billion yuan, set a new revenue after entering China.

According to its earnings report released in February this year, Decathlon's global retail sales in 2017 reached 11 billion euros, an increase of 11% over the previous fiscal year, and now there are 1352 shopping centers in nearly 40 countries and regions around the world.

Before Decathlon, there were two modes of China's sporting goods industry. The first one was Lining and Anta manufacturers, from design, production to distributor channels, and the brand agents such as Tao Bo and cross world. They also operate multiple foreign brands in the hand, and enhance the channel value through the layout of terminal stores.

In recent years, with the nationwide fitness craze, there are new brands such as Pathfinder, Keller stone and Sanfo, but the operation mode is nothing less than the two mentioned above.

It is a "sports professional supermarket".

The two ends of the industrial chain are controlled, and product design, raw material procurement and shopping malls operation are grabbed in their own hands, and the manufacturing links in the middle are completed by OEM manufacturers.

It is very similar to IKEA, which uses unique design, compressed supply chain costs and self built shopping malls to form brand competitiveness.

Why can Decathlon do so successfully? Today we will talk about its "real war".

A company with a few "wonderful flowers"

This is a company that seems to be slightly exotic in the outside world. If you are not very concerned about sports, you probably haven't heard it, because it really doesn't advertise on TV very much. It's too low-key for a sports brand.

People who can understand it may spend a whole day with their family and enjoy the relaxation and fun of sports every weekend.

It is known as the "IKEA" in the sporting goods world. When many retail businesses are closing their own stores, in 2017, Decathlon opened 52 new shopping centers in China, with a turnover of more than 10 billion yuan and a record high after entering China.

According to its earnings report released in February this year, Decathlon's global retail sales in 2017 reached 11 billion euros, an increase of 11% over the previous fiscal year, and now there are 1352 shopping centers in nearly 40 countries and regions around the world.

If you look closely at the performance, it is not worth noting, and there are many companies that grow better than Decathlon.

But two points have aroused interest.

First, Decathlon is a production company.

R & D, brand, retail, logistics as one of the whole industry chain company, at the same time master

And the two ends of retail are the "traditional" businesses.

Because such enterprises are large in scale, difficult in organization and management, and difficult to manage, and their performance is growing steadily and commendable.

Second, by the impact of the electricity supplier, the days of the physical store are not so good. The giants like WAL-MART, closing shop in China and laying off staff are not new things in the sun.

How did Decathlon maintain its growth in the face of adverse circumstances?

Since it is against the trend and wants to be independent under circumstances that are not ideal, there must be a special way.

Decathlon has several unconventional practices in retailing.

Opening a large store, sacrificing Ping efficiency to do experience

Decathlon currently has 204 stores in China, and this number is still increasing. These shops are basically far away from large commercial centers (there are also few shopping center shops, with an area of about 1500 square meters), with an average area of 4000 square meters, equipped with free basketball courts, soccer fields, parking lots and related facilities, and must allow about 15% of the indoor area for customers to experience.

The cost of such a large store is very high. In order to reduce the cost, Decathlon generally adopts the cooperative lease of developers and the self purchase mode of land purchase, which accounts for the majority of the lease. Generally, Decathlon will choose to sign a contract, and it will be 20 years at a time.

Due to the high land cost in China, the self built proportion now accounts for only 13% of all the stores in China.

In the past, the location of physical stores was selected in the gold lots.

It is impossible to leave much room for consumers because of the size of the land.

Shopping in shopping centres, and the display of goods is full, so that we can expect more opportunities to purchase higher efficiency.

Decathlon uses every means to make itself the first choice for family weekend entertainment.

Their shops generally require free basketball courts, football fields, parking lots and related facilities.

And about 15% of the indoor area must be left for customers to experience.

The whole category covers 100% of its own brand.

Mode determines that Decathlon is doing all kinds of coverage.

Decathlon China currently offers 80 sports, and about 3000 new products are listed each year, with 20 private brands.

From outdoor sports, running to equestrian and fishing, a small number of sports fans will not return empty handed.

Decathlon expects to provide more than 100 sports in five years.

However, the product category under the same sports category is subtractive, making shopping choices more simple and precise, forming a single product scale effect.

Through continuous optimization of production processes and supply chain management, automatic order and inventory control, significantly shorten the average turnover cycle.

In the retail industry, independent brands have been regarded as the commanding heights of enterprise development. WAL-MART and Carrefour are pushing their own brands, but none of them has done Decathlon, and more than 96% of the stores are private owned brands (to achieve the target 100% own brand immediately).

In the past two years, with the efficient management and cost control of the whole industry chain, the average selling price of Decathlon's single product has been cut by 8%.

For Decathlon, long-term and stable low prices can reduce sports costs and really promote more people to engage in sports.

It's not low price, it's performance price ratio.

Low price has become Decathlon's survival strategy.

To ensure price competitiveness, Decathlon even limits the gross margin of products.

If the gross margin of a product looks good, management will try to lower the price.

For such a violation of intuition, Decathlon responsible person said, "because Decathlon is concerned about not short-term interests, but to provide users with truly inexpensive, competitive products."

Decathlon's products, 29 yuan fast drying clothes, 129 yuan climbing shoes, 19 yuan lightweight backpack...

The most attractive thing about Decathlon is that it is really cheap.

These Decathlon's cost-effective products are called blue goods, they are placed in the most prominent position in the shopping mall, and the price is lower than at least 20% of the similar products on the market.

Chinese counterparts are trying to raise prices and compete for high-end products.

At the same time, Decathlon firmly grasped the main line of mass consumption.

But low price is not a magic weapon for Decathlon.

Decathlon can't win Taobao and Shanzhai only by low price. Even Tmall's sales in Decathlon flagship store are still at the top.

Advertising costs account for only 1% of turnover.

The sports industry is a large market, and the total scale of China's sports industry is more than 3 trillion yuan.

Many football stars earn hundreds of millions of dollars per year for endorsement of light business.

But these advertising costs will undoubtedly be passed on to consumers.

Lin Zhitong, Decathlon media manager in China, said that Decathlon hardly advertised its advertising expenses and was strictly controlled within 1% of its turnover. Word of mouth marketing is the most important way of marketing.

Its first line salesperson may be a sports star you know, and customers who rely on word of mouth mode account for 50%.

The saved advertising cost will directly give profits to customers.

For an enterprise, terminal is the best platform to display products and services, and investment in terminals can bring intuitive and good feedback to the marketing of enterprises. The most important part of Decathlon word of mouth marketing is inside the shopping mall.

Among all the new customers, the new marketing model of oral communication accounts for more than 50% of new customers.

These saved advertising costs directly give profits to consumers.

Putting user value first

Decathlon's performance can grow steadily. In many stores, under the influence of the electricity supplier and the big economic environment, there are still many shops to open.

First, Decathlon uses the way of big stores to keep consumers' experience space. Decathlon does not have no wading electricity supplier. In 2010, it opened Tmall flagship store.

But the experiential marketing that it most relies on is not lost because of the electricity supplier.

This is also one of the reasons why it dares to open shop and its performance has steadily increased.

Second, Decathlon is the main consumer, how to use low quality products to impress consumers is the key.

Because it is a whole industry chain company, from production to retail chain, there is no cost of intermediate links.

And no advertising, simple packaging and other practices are starting from the user's value, to part of this cost to consumers.

Third, Decathlon attaches importance to the construction of relations in the paction process. If this is not done well, it is impossible to bring new passenger flow with word-of-mouth.

Decathlon attaches great importance to customer service. In Decathlon's large storefront, you can experience all kinds of sports you can think of, and others to guide you.

(author: Zong he)