Dick’s Sporting Goods Inc. (DKS) is working to double sales to more than $10 billion, and to help it get there it’s taking a page from PepsiCo Inc. (PEP)
To become an even bigger national presence, the largest U.S. athletic chain plans to re-shape its advertising to get consumers to think of Dick’s as more than a place to go shopping. Dick’s Chief Executive Officer Ed Stack started by hiring 14-year Pepsi branding veteran Lauren Hobart as chief marketing officer a year ago.
That change begins tonight as a nationwide “Untouchable” campaign debuts with a 90-second commercial on ESPN. Aiming for an emotional connection, the ad features amateur athletes and music from the movie “Rudy,” a 1993 drama about an underdog college football player. While consumer product companies such as Nike Inc. (NKEE) and Pepsi have used lifestyle advertising for years, the concept is foreign to big-box retailers like Dick’s, which had previously focused on Golf-a-thon sales events and pro athletes promoting shoes.
“It was paramount to demonstrate that we understood the physical, mental and emotional challenges the athlete faces,” Hobart, 42, said in an interview. “We’re trying to establish, and amplify an emotional connection between our brand and our customers.”
Dick’s is introducing the campaign at a time when sales in the sporting goods industry are growing faster than other parts of retail. Shares of Dick’s and competitors such as Foot Locker Inc. (FL) and Finish Line Inc. (FINL), as well as manufacturers such as Nike and Under Armour Inc. (UA) reached 52-week highs in the past month.
21 Percent Gain
Dick’s, which was founded in Binghamton, New York, and has the majority of its stores in the Midwest and eastern U.S., rose 1.3 percent to $45.34 at the close in New York. The shares have gained 23 percent this year.
The retailer, which reports fourth-quarter results on March 6, boosted sales 9.2 percent to $5.12 billion in the 12 months ended Oct. 29. Dick’s has also added stores when many chains in the U.S. are slowing growth or reducing locations. The Coraopolis, Pennsylvania-based retailer added about 40 stores in the past year, giving it 480.
The company, started by Stack’s father Dick in 1948, is working to expand its store count to 900 in the U.S. by putting more focus on Dick’s itself rather than only highlighting the well-known brands it sells.
“As we looked toward our goal of becoming a truly national footprint, we recognized that we wanted be more deliberate about building our brand,” The 57-year-old Stack, who took over the then two-store chain from his dad in 1984, said in an e-mail. “As a result, we made key decisions to infuse new marketing leadership into our team and to develop a new approach.”
That shift begins with a commercial devoid of sports celebrities and logos that are hard to spot. While a popular ad from Dick’s last year featured NFL star Clay Matthews demonstrating Nike cleats by smashing up a store, this spot follows the natural progression of athletics. It starts with empty fields, shows practice and playing games. Hands are taped. A lineman makes a pancake block. A team celebrates.
“The goal is that when people think of sports, they think of Dick’s Sporting Goods,” said Hobart, who oversaw soft drink branding for Pepsi in North America. The company wants to “keep evolving as we become a national brand.”
Evaluate the Brand
When Hobart arrived in February of last year, she decided the company needed to evaluate the brand. She hired brand strategy firm Redscout, based in New York, to conduct research that included monitoring consumers as they shopped at Dick’s and at competitors.
Those insights led Dick’s and ad agency Anomaly, which has created ads for Budweiser, to craft a campaign focused on the fundamental goal of sports achievement while also reinforcing its long-time tag line of “Every Season Starts at Dick’s,” Hobart said.
“We just felt we wanted to come out in a big way,” Hobart said. So consumers could see “what Dick’s is really about.”
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