Sportitude Founder and CEO Roumen Staykov talks to Power Retail about transparency, growth strategy and why this isn’t the new normal (yet).
Congratulations on winning the Top Small-Medium Retailer Award at the 2022 All Star Bash! What does it mean to win this award?
The past two years, and counting, have been the most turbulent and unpredictable times in recent history. Many of the usual systems that retailers have in place no longer applied as we were all at the mercy of the state and national responses to the pandemic.
To come out of a period like that with the business in a better position than what it was prior to the pandemic, strengthened our belief in the approach we took in our response. We had to innovate in the services and knowledge we were offering to respond to our customers’ fast-changing needs and take a fresh look at how our team could deliver on those.
Winning this award under those circumstances, with thousands of other retailers facing and responding to those same challenges, was extremely humbling. It has given our team immense pride and confidence in the culture that we’re building and our approach to innovation and business problem solving.
Tell us a bit about Sportitude. What is its history, and what makes it different from other footwear and sporting retailers?
We launched in 2010 as a social networking website for sports teams and clubs. A year later we added an e-commerce marketplace for sports footwear, apparel, and equipment through relationships we built with a few local sports retailers in Adelaide.
The marketplace gained traction quite rapidly, so it wasn’t long before we pivoted our entire business model to focus solely on e-commerce and we continued to expand our product offering.
It took us a few years of growth and category experimentation to really find our niche. Sports performance footwear was by far the most successful category on our marketplace and what we developed a strong specialty in.
Local iconic running specialist Joggers World was our standout performer, thanks to their 30+ year history, deep product knowledge, strong customer and community focus.
We cemented our relationship with Joggers World in 2016 through partnering in the opening of the first Sportitude bricks-and-mortar store in Fullarton, SA. Then in 2021 we merged our operations to supercharge our respective strengths. The Joggers World brand was retired and we opened a new running concept store, Sportitude Running, in Hindmarsh, SA. The store has quickly become a market leader in Adelaide and has picked up a national award for Store Design of the Year.
Sportitude differentiates from competitors through our focus on being the best at helping customers find the right product to achieve a goal or need. It probably sounds simple, but it comes down to a combination of factors. It starts with our team culture and “never settle” mindset, our deep knowledge about the thousands of products we stock, understanding each customer’s unique circumstance, body and goal, and providing a unique customer experience that’s goal driven and not just smoke and mirrors.
Looking back at the last six months, what has been the biggest challenge, and what has Sportitude learned from the experience?
The biggest challenge of the last six months has been supplier stock unpredictability due to lockdowns in countries of manufacture and shipping delays.
We’ve had to navigate key footwear models being cancelled, footwear for key sports being delayed by months, getting four months of orders arriving at once and all things in between.
Our Head of Product has been an absolute wizard at navigating us through this time. Key learnings have been the importance of maintaining positive, honest and transparent relationships with suppliers to get information fast and be able to plan and pivot quickly.
The other learning for us was the importance of having several team members being skilled across different functions of the business to be able to rapidly get internal help for teams that needed it, without being confined by a lengthy recruitment and training process.
It was a monster effort to stay on top of it all, yet we’ve managed to maintain strong growth throughout the period.
The pandemic has proven to be a catalyst for the e-commerce boom these past two years. What changes do you expect to see become permanent parts of the shopping experience in 2022 and beyond?
With e-commerce taking a larger slice of the overall retail pie over the past two years, more competitors enter the market and existing businesses are expanding horizontally in different markets, enticed by the increased demand and market size. The biggest change we’re seeing is the increased competition.
This places more emphasis on not being complacent on the basics of the overall shopping experience – from website usability to drive up conversions through to speed of delivery and outstanding customer service to drive up customer loyalty and repeat purchase. There’s a lot less tolerance from customers for websites that don’t have the basics figured out.
The benchmark of what that customer experience looks like continues to change rapidly as digital customers have evolving expectations. Innovation within business to differentiate from competitors and exceed those customer expectations is critical now more than ever for long term growth.
How different is 2021 to 2022 for Sportitude so far?
In 2021 we were still very reactive to the external factors related to the pandemic and coping with the unpredictable demands caused by different lockdowns in different states.
This year we’ve started to see a bit more normalisation in purchase behaviour online and our sales patterns are starting to match the seasonality that we were seeing prior to 2020. But with stock supply still being the major issue for the start of this year, it’s not yet safe to say that we’re in a new normal.
In our stores we’ve seen solid growth this year as consumer confidence has ramped up with the easing of capacity and mask restrictions. Customers continue to crave the physical retail experience and human interaction that’s now more on their terms than what it has been in the past couple of years.
What do you believe are the biggest challenges for Australian e-commerce businesses right now, and what could be done to address these? What are the biggest opportunities?
Right now I see the biggest challenge being more uncertainty about what the rising inflation and interest rates are going to do to consumer confidence and spending. The last interest rate rise was 15 years ago and that’s before Sportitude existed. It’s another period of unchartered waters for us and most e-commerce businesses.
The last couple of years have been good training in how we approach these types of external factors, so we’ll be continuing to learn, experiment and innovate while maintaining a strong team culture to give ourselves the best chance of riding out potential rough times ahead.
On the flip side, the biggest opportunity lies in the increased uptake of e-commerce in Australia over the past couple of years when physical stores were shut.
The industry has benefited from being on “fast forward” for two whole years. It’s up to every e-commerce business to maintain a high level of customer service and experience to ensure we maintain the trust that new online shoppers have placed in us to keep them coming back.
Last-mile delivery has become a tricky aspect of e-commerce recently. How has Sportitude dealt with the influx of orders, and has there been a change in strategy for last-mile deliveries?
Our approach has been to be as transparent and upfront as possible about potential delays to set customers’ expectations early on and avoid frustrating situations post-purchase.
Through rolling lockdowns and restrictions around Australia, we put up delivery delay stats on our website for customers to see how well our carriers were performing over prior weeks and what potential delays the customer may expect. The aim of this was for customers to make an informed choice about which delivery service level they select at checkout depending on their needs and knowing upfront the chance of there being a delay in delivery.
This led to an immediate 30 percent drop in the number of calls and emails to our customer service team for delay-related inquiries, it had no impact on conversion rates and we saw a significant increase in customers choosing a premium express shipping option which was performing much better at the time.
Our warehouse team were briefed on carrier performance regularly and were adjusting when necessary to get parcels with the fastest performing carrier. If we became complacent and just blamed couriers or the pandemic without providing that extra insight to our customers, we would’ve lost business and would’ve had a very overworked customer service team.
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