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SportScheck is one of the largest sporting goods retailers in Germany with an offering that runs the full range from tennis, soccer, and running, to yoga and fitness. In the market for almost 75 years, SportScheck started out as a brick-and-mortar retailer and then moved into catalog retailing. Today, it has evolved into a full-fledged omnichannel retailer with 17 stores in Germany, an online store that generates about half of their revenue, and a mobile app.
As with most of retail, the expansion into digital and pressure from large players entering the market are forcing the sporting goods industry to figure out a new way forward, with a sustainable business model. Margins on product are slim to none today, and customers can find the gear they’re looking for at hundreds of stores, or directly from the brands themselves. Running the business as usual doesn’t pay the bills anymore.
SportScheck realized that to continue to grow, they needed to shift their perspective. What if, instead of trying to differentiate through product, they found other ways to monetize the traffic on their site?
SportScheck has adopted a very interesting perspective on their business: they see product as content, much like an article on a publisher site. The publishers don’t make money on the consumption of the article, but rather, on the ads they sell around that article. SportScheck realized that they might be able to do the same thing.
Jan Kegelberg, SportScheck’s Chief Digital Officer explains, “So the people still come to your shop and they still buy, but it’s not enough to make a profit. So, we have to figure out new ways to monetize the traffic that comes to have that content.”
SportScheck wanted to build an ecosystem for a sportive lifestyle by offering products, services, content, and events. And while part of their solution involved offering valuable, in-store experiences, another crucial part was Criteo Retail Media.
Retail Media is a turnkey solution that enabled SportScheck to sell native ad space on their website to their brands and create a win-win-win solution.
This is because brands boost their product visibility with personalized ads based on real-time behavior and AI-driven optimization. Customers see unobtrusive, hyper-relevant ads that improve rather than impede their journey. And SportScheck adds a new revenue stream by acting as a publisher.
Jan elaborates, “With retail media you get the consumer when his mindset is on purchasing a product, so it’s less obtrusive than other things. And we see the results and we see that the consumers are really happy about it. The consumer actually appreciates us showing him additional products, which they might have not thought about.”
SportScheck launched Retail Media with a strong belief that it was something that their brand partners wanted — and the response was overwhelmingly positive. The campaign results were extremely positive as well, generating a return on ad spend anywhere between 600% – 1000%, depending on the specific campaign.
“It’s a great advertising opportunity compared to other advertising solutions out there. And so, we are happy because our clients like it, the consumer likes it. And for us it’s a very efficient way of connecting our brands with our consumers” says Jan.
Jan sees huge potential for the sporting goods industry, particularly in the athleisure space. He also sees opportunity in building and embracing a larger sports ecosystem, including things like classes, sports travel, sports insurance, and the technology that could connect it all. The key will be finding your unique point of differentiation.
As for others considering retail media, Jan says get started now.
“People have to think about, why am I here? What’s my reason why for being in this market? And I think we will see a lot of interesting concepts coming up in retail in general, not just in sporting goods, but in all the other different retail sectors as well.”
-Jan Kegelberg, Chief Digital Officer, SportScheck