Sport Chek tackles digital disruption

23 September 2014

TORONTO: Sport Chek, the Canadian sporting goods retailer, is actively seeking to address the "value chain chaos" which could potentially result from making effective use of digital marketing.

Duncan Fulton, svp/communications and corporate affairs at Canadian Tire Corp – the owner of Sport Chek – discussed this theme at a recent conference.

"Most of Canada's companies are not properly equipped to be making decisions on digital, because we don't understand the implications," he said.

When outlining the specific implications that might come from leveraging digital, Fulton cited the example of increasing bicycle sales through the heightened targeting offered by new media.

"So, here's what's going to happen," he asserted. "We're going to sell 6,000 bikes instead of 4,000 bikes." (For more details, including how the flyer can be transformed for the digital age, read Warc's exclusive report: Sport Chek and the supply-chain downside of digital growth.)

One major problem, however, is that Sport Chek's orders have to be placed months in advance, meaning that the company will not be able to easily meet this spike in demand.

And that fact could have a knock-on impact for customer satisfaction ratings, as "they're going to come in looking for a bike" and it may be out of stock.

Even the option of waiting out the current purchase cycle and ordering more bicycles next year does not fully resolve the broader issue, according to Fulton.

"Guess what's going to happen?" he said to the DX3 audience. "We're going to show up at the distribution centre where we've been storing bikes for 30 years."

And at this point, the company will face the challenge of identifying precisely where to store the additional inventory.

Such an example, Fulton reported, is illustrative of the "entire value chain chaos" that can result simply "because we marketed one bike digitally."

Extrapolating that trend across a whole product portfolio indicates the shift now facing businesses, both in Canada and beyond. "Digital is disrupting everything," is how Fulton described this situation.

Data sourced from Warc