XXL, Sport 1 | The price grip gives conditions for Black Friday in XXL

When Norway closed last spring, things turned out very well for the sports networks. “Everybody” was going to start exercising at home, and the exercise equipment almost flew out of the stores.

Unlike last spring, stores and malls in various parts of the country are closed. This also applies to the XXL sports chain, which now has 20 of its 37 department stores closed. It affects the stores in Oslo and Viken, Bodø, Sandefjord, Tønsberg, Haugesund, Skien and Porsgrunn. These department stores account for almost 60 percent of XXL sales in Norway.

– Now more than half of our department stores in Norway are closed and therefore we are intensifying the battle for online customers and offering free shipping nationwide, XXL manager Pål Wibe tells Nettavisen.

Although it is still possible to choose to click and withdraw, they still see that both free shipping and home delivery are attractive.

Advertising: Sports stores empty warehouses of winter goods.

Also read: Home training takes off completely: – Huge impact

– Price war

They’ve already tried free shipping and home delivery in Oslo and Viken after stores closed once again this year, and it has paid off.

– E-commerce explodes when we do this. The numbers we see are similar to what we see on Black Friday, he says.

Wibe says that nearly 90 percent more of Oslo customers have shopped online in the last week. The number of home births has increased from 3 to 4 percent to 40 percent in Oslo and Viken.

– We have the largest online sports store in the Nordic region, but our online margins are generally lower, partly because shipping costs have a negative effect. When we accept the entire invoice for shipping, it’s almost like a price war, says Wibe.

However, he points out that the chain must be attractive and have the best price at all times, but they also want to build reputation and acquire more customers from all over the country, even where they do not have department stores.

– We see that free shipping triggers purchases and we get sales from customers who would not otherwise ask us for anything. Shipping shouldn’t be a barrier to buying now, says Wibe.

It says that they cooperate and dialogue with the shipping company, but they do nothing with the prices of the merchandise to the customers, even though they offer free shipping.

Also read: Strong growth in online sports and leisure sales in the crown era

Sport 1 doubled sales

XXL competitor Sport 1 is also focusing on generating revenue from online shopping when 70 of its 230 stores are closed due to local coronary restrictions.

– We especially focus on clicks and recoveries, and we accelerate it thoroughly, says Sport 1 boss Ole-Henrik Skirstad to Nettavisen.

Stores that have closed can deliver prepaid products, giving customers free shipping and the opportunity to get products quickly after ordering.

– Last week we had more than double e-commerce sales than in the same week last year. Demand is very high now towards Easter, says Skirstad.

This also includes clicking and retrieving orders.

Advertising: Sports stores empty winter goods stores

Avoid 200 layoffs

Although XXL loses money by offering free delivery, investing online means they can keep more employees working. Now the chain has around 900 laid off, while around 200 employees don’t have to be laid off because they have been assigned new job duties.

– We need more people in the central warehouse to collect the products and we need people in the department stores to collect the orders. We prioritize picking products from closed warehouses when we receive orders from the online store with no central stock, says Wibe.

At the same time, XXL is accelerating a series of strategic projects for the chain, so that we can use people in the closed warehouses who would otherwise have to lay off.

– Among other things, we will begin implementing product identification labeling, electronic price signs and category reorganization in department stores to make them more “customer logical,” explains Wibe.

In addition, they will keep employees working by maintaining bicycle service in closed stores.

– We work daily in a contingency group to look for new tasks that we can take advantage of those laid off so that as many employees as possible have a job to go to, he says.

Fewer laid off this year

Sport 1 also sees that they manage to keep multiple employees at work even if the stores are closed.

– There are far fewer layoffs this year compared to the same period last year, he says.

Although brick-and-mortar stores were open at this time last year, customers were more hesitant than now. Therefore, there were also more employees laid off than now.

– Now customers are there, and online shopping helps us keep the wheels moving, he says.

Also read: Reacts strongly to the closure: Large chains warn of massive layoffs

Skirstad will not come out with the exact number of layoffs or how many will be laid off due to the increase in online shopping and click and choose.

Sport 1 does not have free shipping, except for orders through antonsport.no, but they see that many customers prefer clicks and recoveries.

I think it is positive for the chain.

Tor Wallin Andreassen, a professor at the Norwegian School of Management and an expert in innovation, believes that the XXL movement is positive for the chain, although it is nothing new.

– There are no kiosk evenings and a news that an online store offers free shipping. This has become an industry standard and is something that customers expect. At the same time, I find it hard to believe that they make a profit, because shipping costs have to be covered, he says.

If XXL assumes the cost itself and foregoes profitability in this period to, among other things, take care of employees in a difficult period, as they say themselves, they believe that it helps to build the brand by assuming social responsibility.

– It is also an investment to create a volume of online purchases, says Andreassen.

Andressen believes that one of the reasons why XXL assumes the additional cost itself and does not release it for customers in part or in full, may be because the chain is being built and becoming a platform within sporting goods in Norway.

– Like Amazon, they can become a retailer where other suppliers, for example of special equipment for fly fishing and alpine skiing, can sell their products, he says, noting that XXL now sells more “standard products” to families.

– XXL can be the place where people go to buy sports equipment online, says Andreassen.

Marginal profitability

In the long run, though, online stores can’t offer free shipping without bearing the costs in other ways, Andreassen believes.

However, he believes that the corona pandemic is accelerating the focus on online shopping and we are learning to shop in a new way.

– Therefore, XXL must solve this problem quickly, says the teacher, adding:

– Home delivery is marginally profitable and will quickly hit the red if volume increases.

Andreassen believes that the solution is a new technology, which reduces collection and logistics costs; otherwise, customers will have to bear part of the costs in the form of higher prices.

So far, the online newspaper has failed to get comment from Intersport.

Advertising: Check the best offers in XXL

Advertising

The ingenious hammocks you should check out