Decathlon Case Study
Decathlon, a French manufacturer and retailer for a wide range of sporting goods including sports equipment and sportswear, began on 27th July 1976, when Michel Leclerq opened the first store in Englos, a small city near Lille in France. The company is still privately owned today. About 43 % of the stocks are controlled by the Mulliez family and 42 % by the Leclerq family. Company employees control the remaining 15 % of stocks. As of 2015, Decathlon runs 884 stores with more than 63,000 employees in 21 countries. The top three countries are currently France (288 stores), Spain (129 stores) and China (115 stores).
Decathlon’s business approaches are always sticky to it’s tenet: products for every type of sport are offered under one roof at attractive prices. There is no sport specialization or discrimination against less popular sports.
Decathlon differentiates itself from competitors
Products for every type of sport are offered under one roof at attractive prices
The range of the assortment and size of each store’s selling area are key factors in Decathlon’s economic success and major areas of differentiation from the competition. Unlike its competitors, Decathlon focused on attractive prices, with products to match every budget. Decathlon consolidates all sorts of sports supply into one place, making it the Walmart or Big Bazaar for sports. It is a new concept since most brands specialize in manufacturing certain things such as Head manufactures Tennis Racquets.
Instead of making products matching it’s prices, Decathlon offer customers not only low price yet a good quality of products. To realize this business model, Decathlon’s main stores located out of the town, usually sit in the industrial area with a low rent. Hence, they shrink the cost by playing the role of both distributor and producer. They launches more than 20 passion brands which occupies more than 60% sales of the business map. The twenty passion brands channel their expertise into developing simple, yet fully functional and appealing products, at the lowest possible prices to reach a maximum number of customers. Apart from the private labels, they also carry top major sports brands such as Nike, Puma and Reebok mainly because of their attractiveness and the ability to use their pull- and image-effects to attract customers.
Main success factors of Decathlon’s core store-based retailing concept
Omnichannel approach
Decathlon’s online shop introduced in late 1999, it can be seen as an add-on to the classical stores as a convenience service and a move towards a cross-channel experienced. This approach refers to a customer-centric approach in which all channels are integrated so the customer has a unified and consistent experience whether they are at a physical store, using an app, or on a website.
Enhanced connection with local communities
The unique R&D process allows Decathlon maintains a high level of standardization throughout the chain, while still responding to localized needs. Its headquarters analyze each store’s catchment area and decide on the appropriate breadth of all product categories and sub-categories.In addition, each store also offers a broad range of services to complement the products sold. For example, it launches a very innovative service called Trocathlon, which lets people trade second-hand sports equipment inside a Decathlon outlet. This concept not only locked the current customers up, but also monetize the potential customers who shopped the second-hand products.
Some French and international locations directly connected to Decathlon stores host a Decathlon Village fitness park. Entry to Decathlon Village comes with a fee, but Decathlon offers free training sessions and activities organized by store employees in the village area. Although the entry to the park comes with a fee, Decathlon hold free teaching sessions in a regular basis, which allows people to try on their products in person, which further enhances the brand concept: to let customers try out new sports at Decathlon and buy the necessary equipment.
Outlets
Decathlon’s most successful diversification so far has been the launch of a discount retail format, based on the brand Koodza. Like the main brand, the Decathlon easy shops emphasize their wide range of sports equipment, while stressing the attractive prices even more. This is a good strategy, because it lets Oxylane isolate the sale of their own products from the main Decathlon stores and can appeal to other groups of buyers with lower budgets.
Specialization
While Decathlon had covered the whole spectrum of sports, each passion brand focused on a particular sport (i. e., category-specific) and received a unique name. The goal of this strategy was clear differentiation across the brand spectrum. This helps Decathlon labels position themselves more strongly against their competition by operating specialized stores to attack competitors in each field.
By offering stores specializing in certain sports, they can better meet customers’ needs, e. g., by offering more precise advice by specialists in stores for a particular sport or an ambience which better fits different clienteles like in Decat’. Unlike standard Decathlon stores, they are mostly located in town centers. Decat' stores sell hardly any of the equipment available in standard Decathlon stores, focusing instead on clothing and other sportswear articles.
Decathlon expanded its store-based retailing paving for internationalization process
Except in a single case, Decathlon could understand the foreign country's market condition since they already had production processes set up in these countries and hence paving for their successful setup in regions like Latin America and Asia.
For example, Decathlon already had a three-year experience of the Brazilian market thanks to their domestic production facilities, and it exploited this knowledge when setting up its retail activities. Not limited to Decathlon label, the discount brand Decathlon easy (formerly Koodza) has also been developed outside France, with presence in eight countries as of May 2015. This format may still be a strong tool to reinforce the company’s strength in countries where Decathlon already has a presence. In addition, the format is easier and cheaper to develop due to smaller sales area requirements.
2023.11.10