Why Can Decathlon Become The Leader Of Sports Brands?

　 　 Decathlon Known as "IKEA" in the sports industry, In the era of e-commerce, Its entities have been able to grow steadily, with a global annual turnover of more than 80 billion yuan and a domestic turnover of 10.5 billion yuan. At present, it has more than 1300 stores around the world, becoming the leader of sports brands.

In 2017, Decathlon opened 52 new physical stores in China, with retail turnover exceeding 10 billion yuan, hitting a new high after entering China. According to its financial report released in February this year, Decathlon's global retail turnover in 2017 reached 11 billion euros, an increase of 11% over the previous fiscal year. At present, it has 1352 physical stores in nearly 40 countries and regions around the world.

Before Decathlon, there were two models in China's sports goods industry. The first one was manufacturers like Li Ning and Anta, who managed from design, production to dealer channels. The other one was brand agents like Taobo and Cross World, who operated multiple foreign brands at the same time, and improved channel value through the layout of terminal stores. In recent years, with the nationwide fitness craze, new brands such as Pathfinder, Kellogg and Sanfu have emerged, but their operation modes are nothing more than the above two.

Decathlon is a "professional sports supermarket". It has controlled both ends of the industrial chain, put product design, raw material procurement and store operation in its own hands, and the manufacturing links in the middle are completed by OEM manufacturers. Like IKEA, it uses unique design, reduces supply chain costs and self built malls to form brand competitiveness.

Why Decathlon can do so successfully? Today we will talk about its "physical warfare".

　 A slightly "wonderful" company

This is a company that seems a little "wonderful" to the outside world. If you don't pay much attention to sports, you may have never heard of it, because it really doesn't advertise on TV, which is too low-key for a sports brand. Those who can understand it may spend the whole day with their families every weekend to enjoy the relaxation and fun brought by sports.

It is known as "IKEA" in the sporting goods industry. When many retail enterprises were closing their physical stores, Decathlon China opened 52 new physical stores in 2017, with retail turnover exceeding 10 billion yuan, hitting a new high after entering China. According to its financial report released in February this year, Decathlon In 2017, the global retail turnover reached 11 billion euros, an increase of 11% over the previous fiscal year. At present, there are 1352 physical stores in nearly 40 countries and regions around the world.

If you look at the performance carefully, it is not worth paying attention to. There are many companies with better performance growth than Decathlon. But there are two points that have aroused people's interest in it.

　　 First, Decathlon is a full industrial chain company integrating production, design, R&D, brand, retail and logistics. It is a truly "traditional" enterprise with both supply and retail at the same time. Because such an enterprise is large in scale, it is also difficult to organize and manage. It is not easy to operate, but its performance is growing steadily, which is commendable.

　 Second, under the impact of e-commerce, the life of physical stores is not very good. The closure and layoff of stores in China by giants like Wal Mart are not new in the sun. How did Decathlon maintain its performance growth against the trend?

Since it is against the trend, if you want to be independent in the case of unsatisfactory environment, you must have a special way. Decathlon has several unconventional practices in retail that deserve attention.

　 Open a large store and "sacrifice" the efficiency to experience

Decathlon currently has 204 stores in China, which is still increasing. These stores are basically far away from large commercial centers (there are also a few shopping center stores, with an area of about 1500 square meters). The average store area is about 4000 square meters, with free basketball courts, football courts, parking lots and related supporting facilities, And about 15% of the indoor use area must be reserved for customer experience.

The cost of opening a large store is very high. In order to reduce the cost, Decathlon usually adopts the mode of developer cooperation lease and land purchase self construction, with lease accounting for the majority. Decathlon usually chooses to sign a long-term contract, which lasts for 20 years at a time. Because of the high cost of land in China, the proportion of self built stores currently accounts for only 13% of all stores in China.

In the past, physical stores were located in prime locations. Because every inch of land is worth a lot of money, it is impossible to leave a lot of space for consumers. Go to the exclusive stores in the shopping center, and the goods are fully displayed, so as to expect more opportunities to purchase and achieve higher efficiency.

Decathlon uses all means to build itself into a preferred place for family weekend leisure and entertainment. Their stores are generally required to be equipped with free basketball courts, football fields, parking lots and related supporting facilities. And about 15% of the indoor use area must be reserved for customer experience.

　 All categories cover 100% private brands

The mode determines that Decathlon does all kinds of coverage. Decathlon China currently provides 80 kinds of sports, and about 3000 new products are launched every year, with a total of 20 private brands. From outdoor sports, running to equestrian and fishing, no small number of sports enthusiasts will return empty handed.

Decathlon expects to provide more than 100 sports within five years. However, product categories under the same sports category are subtracted to make shopping choices more simple and accurate, forming the scale effect of individual products. Through continuous optimization of production process and supply chain management, automatic order and inventory control, the average turnover cycle is significantly shortened.

In the retail industry, self owned brands have always been regarded as the commanding heights of enterprise development. Wal Mart and Carrefour are vigorously promoting self owned brands, but none of them is like Decathlon. More than 96% of the goods in the stores are self owned brands (the goal of 100% self owned brands will be achieved soon).

In the past two years, with the help of efficient management and cost control of the whole industrial chain, Decathlon's average single product sales price in China has decreased by 8%. For Decathlon, a long-term stable low price can reduce the cost of sports and really promote more people to contact sports.

　 Not low price, but cost-effective

Low price has become Decathlon's survival strategy. Decathlon will even limit the gross profit margin of products to ensure the competitiveness of prices. If the gross profit rate of a product looks good, the management will try to reduce the price. For this counterintuitive approach, Decathlon's relevant responsible person said that "Decathlon is not concerned with short-term interests, but provides users with really high-quality, inexpensive and competitive products."

Decathlon products, quick drying clothes of 29 yuan, 129 yuan Climbing shoes 19 yuan lightweight backpack... Decathlon's most attractive thing is that it is really cheap. These cost-effective products recommended by Decathlon are called blue goods. They are placed in the most prominent position in the mall, and their prices are at least 20% lower than those of similar products on the market.

In China, peers try to raise prices and compete High end market Decathlon firmly grasped the main line of mass consumption.

But low price is not Decathlon's magic weapon. Decathlon can't win Taobao and Shanzhai just by low prices. Even on Tmall, the sales of Decathlon flagship stores are still among the best.

　　 Advertising expenses only account for 1% of the turnover

The sports industry is a big market, and the total scale of China's sports industry currently exceeds 3 trillion yuan. Many football stars spend hundreds of millions of dollars every year on commercial endorsement. But these advertising expenses will undoubtedly be passed on to consumers.

and Decathlon Lin Zhitong, media manager of China, said that Decathlon hardly advertises, and its promotional expenses are strictly controlled within 1% of its turnover. Word of mouth marketing is its main marketing method. Its front-line sales staff may be a sports star you know; 50% of the customers are brought by word of mouth. The saved advertising costs will be directly transferred to customers. For an enterprise, the terminal is the best platform to display products and services, and the investment in the terminal can bring intuitive and good feedback to the enterprise's marketing. The most important part of Decathlon's word-of-mouth marketing is in the mall.

Among all new customers, the new customers brought by this word of mouth marketing model account for more than 50%. These saved advertising costs are directly transferred to consumers.

　 Put user value first

Decathlon's performance can grow steadily. Under the impact of e-commerce and the macro economic environment, many physical stores can still open so many stores. It must be the first to put user value first.

　　 First, Decathlon In the way of large stores, Decathlon has left enough space for consumers to experience. Decathlon has opened a flagship store of Tmall since 2010. However, the experiential marketing on which it relies most for survival has not been lost because of e-commerce. This is one of the reasons why it dares to open stores all the time and its performance grows steadily.

　　 Second, Decathlon focuses on mass consumption. How to impress consumers with low price and high quality products is the key. Because it is a company with a whole industrial chain, there is no intermediate link cost in the chain from production to retail. In addition, no advertising, simple packaging and other practices are based on the value of users and make this part of the cost to consumers.

　　 Third, Decathlon attaches great importance to the relationship building in the transaction process. If this is not done well, it is impossible to bring new customer flow with word of mouth. Decathlon attaches great importance to the service to consumers. In Decathlon's large stores, you can experience all kinds of sports you can think of, and there are special people to guide you.