I’ve spent quite a bit of time in Dick’s Sporting Goods(DKS) over the past few months as I’ve coached some teams and played on others. In that time, I’ve seen a lot of empty aisles and workers trying to look busy. I don’t know that Dick’s can stay relevant in the Amazon (AMZN) era.
I know that the company has implemented a more aggressive ecommerce push with store pick up and I’ve seen the in store experience be fairly efficient . The pick up window is immediately inside the store and there is no line so that works. I recently joined the rewards program and I’ve found that to be fairly generous. I’ve even found myself wondering if it is a little too generous. I suspect that they are rewarding away their margins. I did take the bait and use the rewards to buy things that I “may” have purchased on Amazon but still left me thinking.
I’ve turned into one of those people that look at something on the rack and then open the Amazon app and compare price. I found most items to be slightly more expensive at Dick’s. The question then becomes whether or not the extra few bucks is worth not having to wait for two days with the Prime shipping from Amazon. I guess that all depends on the person. Most people are into instant gratification so that would favor Dick’s.
As far as price, I have been watching the Little League World Series lately and see that Dick’s is now offering a price match. I think that plays right into Amazon’s hands as the shrinking revenue from the price matches can’t go on forever unless there are big ticket/high margin items.
Here is the problem that all retailers face in competing with Amazon: If you don’t have EXACTLY what I want at the EXACT moment that I want to buy it, I’m fairly certain that Amazon will. I do t know any large retailer that can offer the same. Dick’s may have a first basemen’s mitt that I would settle for but I know Amazon will have my preferred color, size and probably ten others that I would “settle for” if not in a rush.
DISCLOSURE: This article is for informational purposes only and is based on my own personal experiences. It is not intended as investment advice and should not be relied upon as such. It is not a recommendation to buy or sell any securities listed. Please consult a qualified advisor to determine the best investment plan for you.