While many retailers got battered in the course of the coronavirus pandemic, Dick's Sporting Goods (NYSE: DKS) had the opposite experience. For the quarter ended Jan. 30, Dick's took in $3.13 billion in revenue, which exceeded Wall Street's expectations.
A big reason for Dick's success was a shift to outdoor exercise and at-home workouts. Gyms were forced to shutter early on in the pandemic, and once they reopened, they largely faced strict capacity limits. At that point, many people had to revert to working out at home. Furthermore, many people took to the outdoors as an escape from the walls of their houses, which also led to an uptick in sales for Dick's.
That said, Dick's may not be sitting as pretty as investors would think. Coming off a quarter of strong earnings, the retailer said it's gearing up for either a decline in same-store sales this year or minimal growth. It's for this reason that Dick's isn't growing complacent at this stage of the game. Quite the contrary -- it's launching a new store concept that could end up appealing to consumers in a very meaningful way.
Dick's latest idea
Dick's just opened its first "experiential" store in Rochester, New York. The store will be called Dick's House of Sports, and it will focus on giving customers a hands-on shopping experience. The store will include an outdoor field for sporting events, a rock-climbing wall, and indoor wellness spaces. It'll also give consumers an opportunity to seek advice from fitness experts who can help them choose equipment and get more out of their workout routines.
In fact, the goal is really to create a fitness community of sorts -- one that appeals to consumers and makes them want to visit. A second store is in the works for Knoxville, Tennessee, and Dick's expects to have it open in May.
In an age when so many consumers have shifted to online shopping, offering a unique in-store experience could really work to Dick's advantage. After all, getting to watch product demos or sample equipment can't easily be mimicked on a laptop -- so consumers may be more motivated to leave their homes and head to Dick's despite having gotten used to pointing and clicking their way to different purchases.
If Dick's experiential store proves successful, we could see more of them -- not just from Dick's, but also, from other retailers that are eager to draw in customers and add value to the in-person shopping experience. And that would, in turn, be a great thing for malls and shopping centers (and their commercial landlords).
The Millionacres bottom line
Retailers have been closing stores at a rapid clip over the course of the past year as foot traffic has been sluggish. Part of that is coronavirus-related, but the reality is that digital sales have been taking consumers away from physical stores for years -- hence the whole retail apocalypse. But if a wave of experiential stores hits, that alone could do a good job of helping mall and shopping center operators begin to solve the vacancy crisis they're already dealing with. It could also help malls and shopping centers better thrive in the long run.