Unveiling Decathlon’s private domain layout: How can sports brands break through?

Decathlon, a brand called "poor man's paradise" by many sports enthusiasts, has occupied a place in the sports retail market with its cost-effective products and unique private domain marketing strategy. Despite price increases and quality disputes, Decathlon has maintained stable performance growth. This article will explore Decathlon's private domain layout strategy in depth and analyze how it breaks through in the fiercely competitive market.

In 2023, Decathlon Group's performance reached 15.6 billion euros, of which 75% of the turnover came from long-term consumer members, and the proportion of repeat purchases from old customers also exceeded 60%.

How did this sports brand, which is called "poor man's paradise" by many sports enthusiasts, a brand that does not launch large-scale advertisements and almost never hires celebrities to endorse it, stand out in the highly competitive market?

1. What are the “unchanging” and “changing” aspects of sports retail?

On April 4, 2024, the official Weibo account of Decathlon Group released its 2023 performance report. In 2023, Decathlon Group's revenue reached 15.6 billion euros (about 122.293 billion yuan), a slight increase of 1.15% compared with 2022. Although this growth rate is not amazing, it is particularly difficult to achieve this result in the context of global economic turmoil. Among them, online sales accounted for 17.4% of the group's revenue, an increase of 0.7% from 2022.

Surprisingly, Decathlon Group's net profit in 2023 was as high as 931 million euros, which is not easy to achieve. Of course, Decathlon believes that the continued high inflation, geopolitical and other unstable factors in 2023 have led to a slowdown in global consumer spending, which has brought considerable pressure on performance growth.

Barbara Martin Coppola, global CEO of Decathlon, also said: "In 2023, global companies are facing unprecedented market environment challenges."

On March 12, Decathlon Group announced the news of global brand renewal. The new "track" logo and the brand purpose of "Move People Through the Wonders of Sport" have undoubtedly injected new vitality into Decathlon. At the same time, Decathlon's new brand strategy "Polaris" was also announced.

Brand renewal is not just a superficial glamour, but also a profound commitment of Decathlon to sustainable development. Around July 10, Decathlon was selected into the 2024 list of the world's top 500 "sustainable companies" by Time magazine.

As the official partner of the 2024 Paris Olympic and Paralympic Games, Decathlon has added a different touch to this globally watched sports feast with its outstanding sports product design capabilities. In particular, the exclusive clothing tailored for 45,000 volunteers and 11,000 Olympic and Paralympic torchbearers has demonstrated Decathlon's profound skills in sports equipment design.

In addition, Decathlon also carefully customized exclusive uniforms for the last torchbearers who participated in the torch relay, including French disabled track and field athlete Nantenin Keita and Decathlon athlete team leader, French judo athlete Teddy Riner. In order to create a good image, Decathlon is also promoting green, low-carbon and circular development, not only focusing on the environmental performance of products, but also integrating the concept of sustainable development into every link such as supply chain management and production manufacturing.

However, "no matter what kind of brand marketing power" cannot be directly converted into "value power" or "brand power". What are the "criticized shortcomings of light luxury" behind marketing and private domain priority?

2. Membership Economy and Community Strategy Behind 75% of Sales

Let’s look at the private domain first.

Fortunately, in 2023, Decathlon Group's performance is equivalent to four Li Nings; and in 2022, its annual sales growth rate is as high as 12%, while Adidas's is only 1% in the same period. Driven by the wave of affordable consumption, Decathlon already has 267 stores in China, covering 100 cities. In 2022, the retail turnover in China exceeded 10 billion yuan.

How can this sports retail giant break through the "marketing" dilemma amid global economic turmoil? The answer is obvious. With its "three-piece white-collar" strategy - private domain traffic diversion, micro-business operation, and community marketing, Decathlon has established a firm foothold in the affordable luxury market in 2023.

Over the years, Decathlon has almost never invited celebrities to endorse its products, nor has it launched large-scale advertisements, but it has been able to stand out in the fiercely competitive market. With such achievements, how can we not be curious about the operating strategy behind it?

Let’s first look at the Decathlon Group’s “three-piece suit for white-collar workers”: one of them is “multi-channel layout online and offline, full-area linkage, and seamless connection”.

Online, clear traffic entrances are set up through social media, official websites, mini programs and other platforms to attract users into the private domain traffic pool like a magnet; offline, store guides become pioneers in private domain traffic diversion, quickly converting customers into private domain users.

However, Decathlon's outstanding performance in attracting traffic in private domains is not without challenges. Over-reliance on manual services may bring cost pressure and efficiency problems. In the future, Decathlon may need to further explore the application of intelligent customer service systems.

Secondly, Decathlon's corporate WeChat account has become another highlight of private domain operations. Here, Decathlon has successfully built a number of IP characters with distinct personalities. They not only represent the brand image, but also establish a deep emotional connection with customers through daily interactions. Regularly publishing content related to sports and health has gradually made these IP characters become sports experts and health consultants in the hearts of customers.

At the same time, Decathlon has also put a lot of effort into the operation of WeChat Moments. They focus on the diversity and frequency of content updates, and achieve personalized content push by accurately positioning the target audience.

As a result, Decathlon's regional communities are known for their high activity. These communities not only attract a large number of local customers to join, but also enhance the interaction and stickiness among community members by regularly organizing offline activities and interest groups. These interest groups are led by store employees, who regularly and regularly organize group activities. In 2023 alone, Decathlon launched more than 50,000 activities. These activities not only get customers moving, but also promote the natural sales of goods.

With the development of user community relationships, Decathlon's market space is also further opening up. For example, after joining the community, users who like running are exposed to new sports such as Frisbee and roller skating and try to participate in them. This cross-border attempt not only allows users to discover new interests, but also generates new purchasing needs. This is the "chain reaction" and "value-added effect".

However, compared with the lively local communities, Decathlon's official live broadcast community seems to be relatively quiet. In order to improve the live broadcast community's activity, Decathlon may try to introduce more interactive sessions and interesting challenges; it can also attract more potential customers to pay attention to the live broadcast content by leveraging the influence of KOLs or celebrities; it can also try to increase sales-oriented live broadcast rooms, and introduce more promotional methods such as preferential activities and limited-time discounts to stimulate customers' desire to buy and increase sales.

Of course, in order to further improve the activity and conversion rate of the community, you can add introductions and links to the community entrances to the video account homepage and mini-programs; at the same time, "keep it fresh" and disband or merge communities that have not been operated for a long time to reduce resource waste and improve management efficiency; deepen the membership system, and increase member participation and stickiness by setting membership levels and exclusive activities. At the same time, strengthen the analysis and mining of member data to accurately grasp member needs and provide a more personalized service experience.

In short, Decathlon uses the decentralized strategy of "headquarters guidance + regional self-help" in private domain operations to organize national activities, allowing stores in various places to flexibly plan and use on demand based on their own circumstances.

Compared with ordinary members, Decathlon's private domain customer unit price is 3 times higher, which is enough to prove the effectiveness of its private domain operation strategy. Moreover, private domain users will also leverage their relatives and friends to make joint purchases. The saying "When in doubt, go to Decathlon" is widely circulated in the sports world, which also reflects consumers' deep trust in Decathlon.

In addition, despite the rugged image of Decathlon and its simple decoration that always reveals a faint masculine atmosphere, its female consumer group is also huge. On a certain red book, the number of notes about Decathlon is as high as 100,000+, and a post about Decathlon A-line pants and skirts has received more than 20,000 likes. In the official flagship store of Taobao, the sales volume of women's yoga pants is also as high as 30,000+. These data are enough to prove that Decathlon is not just a paradise for men, it is also loved by female consumers.

The transaction relationship is immediate. After the commodity transaction is completed, the enterprise and the user basically lose contact, which is difficult to maintain in the long run. "Consumer brands" can learn from Decathlon and successfully break this dilemma through private domain operation strategies. Although private domains are "powerful", Decathlon has recently "been in a lot of trouble".

3. Quality or marketing?

From the "king of affordable products" to the "controversy over affordable luxury", when the "price increase" and "quality controversy" come one after another, we can't help but ask: Is this the inevitable fate of the affordable luxury consumption era, or is it the result of Decathlon's own unbalanced strategy?

The word "price increase" is like a stone thrown into a lake, stirring up ripples in the hearts of consumers. A mountaineering skirt that cost 99.9 yuan has risen to 129.9 yuan; a sports insole that cost 49.9 yuan has risen to 59.9 yuan; a fleece jacket that cost 249 yuan has risen to 499 yuan; a children's backpack that cost 14.9 yuan has risen to 39.9 yuan. The prices of Decathlon's products have quietly risen, causing many consumers to exclaim that "affordable prices are no longer there." "I never thought Decathlon would become a financial product," one consumer joked on a social platform.

Is this really the inevitable result of light luxury consumption? Is the value really decreasing while the price line is rising? "A small increase is actually acceptable, but if it increases too much, I won't buy it." Some consumers said that they can understand the price adjustment of individual styles, but consumers actually have many choices "around" Decathlon.

At the same time, with the increasing personalized needs of consumers, traditional large-scale advertising bombardment is no longer effective. The rise of amateur KOCs is a vivid reflection of this trend. They are closer to consumers and know how to touch people's hearts. However, even in this context, Decathlon has not been able to completely get rid of its dependence on large-scale marketing, which has to some extent limited the further improvement of its brand image.

It is undeniable that Decathlon's private marketing is one of the keys to its success. Through diversified means such as corporate WeChat, community operations, and friend circle interactions, Decathlon has built a huge membership system and achieved precision marketing and efficient conversion. However, when the light of marketing is too dazzling, does it cover up the problems of the product itself?

When Decathlon first entered the market, it attracted attention with the labels of "affordable", "diverse" and "people-friendly". However, if we delve deeper into the model behind it, it is not difficult to find that in order to reduce costs to the extreme, Decathlon has almost abandoned all intermediate links and formed a "self-sufficient" model for the entire industry chain. From product design to production, to logistics and distribution, every step is firmly in its own hands. In this model, although the products go directly to consumers, there is also less market testing and feedback. This is undoubtedly an "alternative" choice in today's market. Is it courageous or too short-sighted?

Consumers are calling for "light luxury", a term that combines high-end and affordable elements, to not mean "high price and low quality". It means to provide a value experience that exceeds ordinary goods on the basis of ensuring quality. In the process of trying to become light luxury, Decathlon obviously did not grasp this balance well. The frequent exposure of quality problems has greatly reduced consumers' trust in the brand.

In the tide of consumption upgrading, consumers are no longer satisfied with the functional needs of products, but are more pursuing emotional value and experience value. Decathlon strives to continue the good experience of customers in the store through online private domain operations. However, when product quality becomes a hurdle in the minds of consumers, these efforts seem to be somewhat pale and powerless.

IV. Conclusion

Xiang Shuai is right when he says, "The importance of consumption will only increase, not decrease. The consumer industry will always be young." Looking back at Decathlon, what other "important" opportunities are there in the "new consumer market" in 2024?

First, consumers have diverse personalities and different needs, and the glory of one advertisement conquering the world is no longer there. The traditional combination of TV, celebrities, and advertisements has become dull and monotonous, and brands and businesses urgently need innovative thinking. The rise of amateurs has become a new trend, and the "Wen Shen" phenomenon is a clear proof of this. Brands have realized that amateur KOCs are closer to the people, and they also need their help to create hot-selling products. How to cleverly use amateur marketing to create a hot-selling miracle has become a topic of common exploration in the industry. Miniso is an example. It selects sharing experts from 50,000 private domain fans, and marketing content emerges in an endless stream, hot-selling products appear frequently, and profits soar.

After the epidemic, neighborhood communities have become popular, and business opportunities in the 15-minute living circle have surged. Faced with numerous competitors, how can small community stores break through? A community maternal and child store in Foshan has won trust with its private domain services, and has a constant stream of repeat customers, proving that returning to the essence of transactions can also open up new business opportunities.

Consumers' pursuit has shifted from "functionality" to "emotional value" and "experience value". Brands and merchants need to keep up with the times and provide services even after customers leave the store. For example, Decathlon has supplemented the out-of-store experience through online private domain operations, continuously stimulating customers' enthusiasm for sports, and achieved a gratifying revenue of tens of billions.

In the "e-commerce era", shopping channels are diversified, and traditional supermarkets and stores are losing customers. For brands that rely on offline distribution, how can they transform? While taking into account the interests of channel dealers, "traditional" Yili has also explored a "win-win" private domain model for brands and channels, which has not only accelerated the sales of goods, but also achieved a close connection with consumers.

In short, Decathlon's attempt to achieve "brand sales transformation" by raising prices is "too wrong". On the scale of price and value, Decathlon needs to find a new balance point! This not only means improving product quality and service level, but also requires reflection on the real "brand power".

Faced with the dilemma, Decathlon needs more than just a response and explanation. It also needs to reflect on whether it has neglected quality control while pursuing high-end products and market expansion. In the process of marketing innovation and brand upgrading, has it forgotten its original intention and the real needs of consumers?

No matter how the market changes, quality will always be the lifeline of a brand; no matter how innovative the marketing methods are, they should always focus on meeting consumer needs.

Editor｜Yang Yong This article is written by the author of Operation Party [Li Jiaman], WeChat public account: [Hydrogen Consumption], original/authorized to be published on Operation Party, and reproduction is prohibited without permission.

The title image is from Unsplash, based on the CC0 protocol.