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Store-in-a-Store and Employees’ Strategies

A way to increase the odds of customers actually making a purchase while in the store is through having a highly trained staff. Staffing the store with knowledgeable personnel is a key element to closing a sale. Dick’s, for example, has extremely knowledgeable employees working throughout the store. Similarly, ULTA, formally known as ULTA Beauty, also has knowledgeable personnel selling its products and even has a beauty parlor store-in-a-store concept which forces customers coming to have their hair done to walk through the store. Bass Pro Shops employees, in fishing, hunting, or hiking sections, for example, can talk educationally about the products. In essence, some retail stores are not even selling inventory, rather selling information—as opposed to Walmart who simply competes on bottom of the line price. There are not many Walmart’s in the country where you can receive detailed fishing tips and information from the personnel working sporting goods or what type of wax is best for your vehicle from the people working in the automobile section. Walmart is not in the information business; they compete on cost.

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Customer Loyalty Strategies

Much of the above discussion is around building customer loyalty, but a few additional considerations are included in this section. Unlike a giant department store that sells everything under the sun, specialty retailers have a narrower range of customers. In many ways, they operate under what Porter would call a focused strategy. As a result, specialty retailers must keep their core customers happy and returning because this core group is predominantly the only customers the firm has, as opposed to Walmart, who has many customers buying anything from food to socks—the penalty on faltering on one product category is not as severe. Tactics used to foster customer loyalty include increased marketing, reward cards, private label credit cards, and creating your own private label brands, which often are sold at higher margins for the firm and cheaper prices for the customer. Another advantage of private label brands is customers are not able to compare prices as easily because the store is the only source for that particular product. Dick’s peer and foe, Bass Pro Shops, has done a phenomenal job with its Johnny Morris (the firm’s founder) brand of fishing rods and reels and other items using Morris’ namesake. The only place to purchase is at Bass Pro shops, not Amazon, not eBay, only Bass Pro. To the degree a firm can market effectively and hire the proper personnel to endorse store branded items combined with possibly offering double rewards when purchasing store branded items, significant brand loyalty can be built.

Future

The United States has an extremely high rate of diabetes and hypertension, and by some estimates, the highest rate of obesity among developed countries—34 percent of men and 37 percent of women classified as obese. The U.S. government has introduced several programs aimed at increasing physical activity of its citizens and even promoted them through key figures, including former first lady Michelle Obama. Nike, and other firms, are also encouraging and marketing in a manner to get people more active.

With a growing health-minded segment of the population, increased pressure is being placed on others to conform, which should bode well for Dick’s Sporting Goods. However, smartphones and laptop video games and the like have overall curtailed the prevalence of outdoor activities. Too many young people are hooked on online games and social media communications—to the detriment of firms like Dick’s that want to get you out in the field, in the woods, on the court, or on the water.

Dick’s needs a clear strategic plan going forward to obtain and nurture a loyal customer base.

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