Sports Authority: killed by Amazon and minimum wage increases.

I’m more or less quoting analyst Phil Lempert in the title there.

“With the minimum wage going up to $15 an hour and more people turning to online shopping, more stores are going to close,” Lempert said. “It’s fine to say that everyone should have a living wage. But the money has to come from somewhere.”

Lempert said a growing number of retail outlets have fallen victim to “showrooming,” where customers will walk into a store, try on the shirt or jacket they like and then order it online at a significant discount.

“These stores have to look at not at how they will compete with other brick-and-mortar stores, but how they will compete with Amazon,” he said. “It’s become a holistic environment where people can buy things on their mobile phones and then have the products delivered by the time they get home.”

…Am I the only person who can see the answer, there? Which is: if Sports Authority got killed by showrooming, why didn’t they just duplicate the effect? If people will buy clothes online, then sell them the clothes online yourself. Or, heck, partner with Amazon and have them handle the distribution. I know of more than one used book seller that has happily embraced Amazon’s digital marketplace in that regard.


OK, there’s probably a good reason why Sports Authority couldn’t do that. Or several reasons. But we have created what is now effectively a countrywide, instanteous communications network.  That particular genie isn’t going back into the lamp, absent a series of EMP pulses or other symptom of the collapse of global civilization. Companies are going to have to deal with it somehow.

Moe Lane

PS: Mind you, minimum wage increases didn’t help matters there for Sports Authority at all.

9 thoughts on “Sports Authority: killed by Amazon and minimum wage increases.”

  1. IIRC, Modell’s, Sports Authority, and Dick’s all contracted out their online presence to what was GSI Commerce (then became eBay Enterprise and was just recently split four ways). They WERE doing online, and contracting it out to a third party to handle all the logistics, etc. There was a darn good reason the stock, pricing, and look/feel/UX was pretty near identical on the big sporting goods retailers’ sites — they were run by the same company on the same hardware using (largely) the same software.

  2. This is a problem in the (non-video) games industry. Game makers like brick and mortar stores because those stores (at least in the US – I know it works differently in some other countries) make it easier for people to find others who are interested in playing the same games. If you know people are playing the game, then you’re more likely to buy into it yourself. But the brick and mortar stores can’t compete with online discount pricing.

    So some of the game makers have responded by basically announcing, “If you sell our stuff online at a discounted price, then we’re going to stop selling to you.” Because it’s the manufacturers that are upset in this case, the on-line sellers are forced to sit up and take notice. The howls from players who were using the online vendors is predictably noisy, but the manufacturers that have done this so far aren’t backing down.

    1. This selfsame thing is going on in the boardgaming industry right now. Asmodee has been buying up game companies left and right and recently announced that anyone wanting to sell their games online MUST have a brick and mortar side (or have a special relationship otherwise *cough*Amazon) and must abide by their pricing/discounting scheme (think: price floors/% off MSRP lest your supply be cut off in the future). Board gamers are HOWLING in anger and several of the bigger game pod/videocasters and even one of the BoardGameGeek muckety-mucks have weighed in with editorial supportive of Asmodee.
      We’ll see what happens. I, for one, think $50 for Small World is asking just a titch too much and restrain myself to Amazon Gold Box deals for my bigger boardgame purchases.

    2. Interesting. I know that the RPG companies have been doing two-tier pricing with some success, but then they have the advantage of being able to sell digital versions of their books at attractive, but still profitable, prices. Well, that and crowdfunding now allows them to reliably fund their print runs ahead of time.

    3. It seems to me that it must be an awesome time to become an indie board games maker. I wonder if the board games industry will be as resistant to figuring out the implications of this as the big five publishers are?

      1. Actually, I think the manufacturers are in the right here, Skip.

        The thing about games is that the brick and mortar stores play an important role in the US. If you’ve bought into a new game, then the first thing that you want to do is to find some people to play with. And the way that’s typically done in the US is to go down to your FLGS, find out what night(s) people gather to play your new game, and show up on the appropriate night with your game stuff (and if no one is playing, then you start a play group yourself).

        A good FLGS will support that behavior by providing a nice play area. But they won’t make any money off of the play area. Use of the area is typically granted for free. The FLGS makes its money when you realize that you do indeed like the new game, you’re playing it regularly, and you’d like to try something new by buying more stuff for the game (generally books, miniatures, or cards).

        The problem, of course, arises when the FLGS provides the play area, people gather to play, and then the bulk of the purchasing is done through online vendors that heavily discount their product. The FLGS goes out of business, because no one is buying the store’s products. Players have more difficulty finding opponents, which means that fewer games are played, which means that less product is purchased, which means that the manufacturer loses money over the long run.

        Note that this is not the model everywhere, though. There’s also the “gaming club” model, in which a group gets together to play regularly at a non-store location. These do exist in the US, but my understanding is that they’re much more common in Great Britain. There’s apparently not much FLGS play in the British Isles. When you’re using that model, then purchasing from an online discounter makes a lot of sense.

        1. No. Just, no. The majority of folks buying these games play them with their normal game groups I would wager. Price-fixing cartels are always bad.

          The only reason that they haven’t been disrupted out of business yet is that cheap 3D printing on demand isn’t quite here.

        2. Those in my region make as much on sales of drinks and snacks as they do on games. Maybe more.

  3. Saw EMS ( Eastern Mountain Sports ) is in the tank too : Could not happen to a nicer set of folks . Only dealt with them when I absolutely needed ST before a trip and they were all so helpful ,not , had to tackle a clerk to get them to take your money . So F’em all and back to Amazon .

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