Onsport is catapulting the development of the Aussie online sports arena, its ever-expanding product range and host of customer experience-driven programmes representing a vibrant hub of activity.
INSIDE AUSTRALIA’S SPORTS MARKETPLACE
If 2020 and the coronavirus pandemic have taught us anything as a society, it is the imperative of living a healthy lifestyle.
Disproportionately impacting people with underlying health conditions, COVID-19 has provided a stark reminder that we cannot take our health for granted. Indeed, the vast majority of healthy individuals, including those in older age brackets, will not suffer any serious symptoms from the virus, with many not even realising they have contracted it at all.
The closure of sports facilities as part of wider community lockdowns has not helped – however, the situation has brought out the best in our ability to improvise and adapt.
Homemade gyms and home-based exercise activity have exploded in popularity, with consumers turning to online retail as a means to buy the equipment, clothing and accessories they need to lead a healthy life at home.
For Australia’s leading sports e-retailer Onsport, 2020 has been by far its busiest and most hectic year of operation to date.
“The sports, health and fitness space right now is a very exciting category to be in and is simply going off!” comments Danny Wilson, the company’s General Manager.
“COVID-19 has impacted this market in a very positive way as many people couldn’t access gyms or venture too far with lockdown laws in place, so what better way than to fit out your own home with gym and sports related products.
“Further to this, competing retail stores were forced to close their doors one by one and online shopping took to a new form and, simply put, exploded within Australia.”
Wilson also identifies a shift in mindset among the traditional sports retail supply chain, with brands traditionally reluctant to deal with online-only stores and preferring to see their products in physical shop windows on high streets and in retail parks.
However, that dynamic has changed, and once more Onsport is supremely well placed to take advantage.
“Since March, many of these suppliers have approached us to range their product on our own ecommerce website as well as through many of our loyalty channels,” Wilson continues. “This has created a very positive impact on the business and has assisted us greatly in gaining access to some major brands that have been saying no to us for many years.
“Many wholesalers and brands are investing in their own direct to consumer and ecommerce capabilities which, historically, retailers have not been happy with.
“However, due to the unique mix of sales channels we offer our customers – many of which we are exclusive suppliers to – we have something different to offer brands that are now limiting access of their products to new players in the online retail space.”
The General Manager’s observations are backed up by numbers.
Today the company houses more than 250 sporting, fitness and apparel brands, while online sales in Australia generally now make up an estimated 10.7 percent of total retail purchases in the country. But this is by no means the ceiling of the market’s potential – in the US, for example, online shopping accounts for around a fifth of retail expenditure and the online penetration rate has accelerated during COVID.
It is a shift which has no doubt accelerated in recent years, Wilson himself spending two decades in tech and computing retail, much of this with Australian retail giant Harvey Norman.
His first contact with Onsport came during his time heading up a new B2B venture with Harvey Norman which involved selling technology into education, commercial and governmental sectors, the online sports retailer being a standout client.
“The Onsport business model fascinated me as it had some notable points of difference compared to other traditional ecommerce businesses,” Wilson recalls.
“Loyalty rewards with major Australian partners, coupled with its retail omni-channel strategy, stood out to me as a unique business model in this space and that was when I decided I needed to get involved and help take it to the next level.
“In addition to the sound business model, health and fitness has always been a lifetime passion of mine, so it made sense to pick up all my existing retail and business management skills and drop them into this exciting new space.”
BUILDING A LOYALTY-BASED COMMUNITY
The loyalty reward marketplace angle is something which greatly excites Wilson, and for him is a major differentiator between Onsport and other online sports retailers in Australia.
It operates direct partnerships with some of the country’s largest reward schemes, including Velocity Frequent Flyer (Virgin Australia), Qantas Frequent Flyer, Medibank Live Better Rewards and Commonwealth Bank Awards, programmes which combined reach tens of millions of consumers.
“Prior to COVID-19 we had in the pipeline a further roll out and integration of another nine loyalty and reward programmes for integration,” Wilson adds. “These will come to fruition once there is a lot more certainty in the market and the consumer appetite for such initiatives reappears.”
The numbers, then, look set to grow, both in terms of loyalty scheme participation and Onsport’s brand portfolio.
Of the 250-plus brands on its books, 55 are additions made in the last three months. Another 180 are in the pipeline for launch over the course of the next 12 months, including many from the likes of the US, Europe and Asia, Onsport renowned for its ability to capture a first-to-market position with many sought after products.
But it hasn’t all been plain sailing since Wilson arrived in 2019.
Back then it was at a crossroads in its development, a major threat to the longevity of the business being available cashflow as the company continued to consume money as it swelled in size.
“The business was sound, it had plenty of customers, plenty of suppliers and access to loads of products – however, it never had enough runway to scale at the pace it was certainly capable of,” Wilson says.
“The very first step was to find a major private investor that had a strong appetite for such a unique business and someone that was capable of injecting a significant amount of capital that could be used to increase resources, improve systems and customer experience and purchase inventory that the business so desperately needed.
“In September of 2019, a very successful young private investor who owns one of Australia’s largest online retail digital photography businesses, DigiDirect, invested over $3 million of capital and took on the majority shareholder role. We then moved into the DigiDirect’s 2,000 square metre warehouse operation, located in St Peters in New South Wales, and started our journey of taking over the sports world!”
Moving into the new warehousing space greatly improved logistics capacity and sophistication with the likes of scan, pick and pack platforms being leveraged, while a new ERP system and improved company flow processes have also been enhancements made since Wilson arrived.
Indeed, the General Manager outlines an array of initiatives which have been implemented alongside the injection of capital from the new majority shareholder.
For instance, its brand presence has greatly improved thanks to a logo, colour scheme and website refresh, along with integration of online reputation tool Trustpilot, the company now boasting one of the best reputations in the Australian ecommerce sphere.
User experience has further been enhanced through the addition of live chat and four new payment platforms (with flexible payment terms), and marketing partnerships with other locally based brands have also paid dividends and enabled Onsport to reach even more consumers.
Qantas and Etihad have recently been added to the airline programmes on offer. Under the partnership with the former, Qantas Frequent Flyers who add their membership number to their Onsport account can earn and redeem Qantas points when shopping online with Onsport. This partnership has now also been extended to the Qantas Store marketplace supplying brands such as JBL, ASICS, Bianchi, Lacoste and adidas.
Indeed, adding more (and unique) brands has been key to Wilson’s strategy.
“We have a keen eye on finding products that have not yet entered the Australian market,” he adds. “We have managed to secure three brands so far that have rewarded our sales greatly – Quieton noise cancelling sleeping earbuds, Airofit breath trainer and Skinners, the revolutionary sock shoe.
“At least another 25 new sporting related brands will soon be entering the Australian market only via Onsport or with some form of initial exclusivity.”
Looking into the future, keeping the offering fresh and relevant forms the crux of the General Manager’s plans.
As part of its partnership with Virgin Australia, October and November 2020 will see up to three million Velocity Frequent Flyer Points given away to Onsport customers, one of the largest such promotions the airline has ever carried out with one lucky winner taking a million points.
Arguably the most exciting development on the horizon, however, is what Wilson refers to as the building of a combined sporting, health, fashion, outdoor and fitness marketplace, a first for the industry in Australia.
“Onsport is currently creating a dedicated sports and outdoor marketplace that will bring hundreds, if not thousands, of sporting and outdoor brands together under the one roof, generating the very first one-stop-shop for everything health, sport and fitness related,” he explains.
“We envisage the launch of such marketplace within the Onsport ecosystem will increase our existing 14,000-plus products to well over 50,000 products.
“The consumer is becoming more aware of the sheer range of product that is now available online both domestically and from overseas, so it’s important that we can meet that demand and go beyond what is available in a traditional bricks and mortar sports store where range is limited due to shelf space.”
A key component of the marketplace will be Onsport’s own-brand range of fitness products, named Onsport Fitness.
A direct consequence of supply chain disruption caused by COVID-19, the company has handpicked, designed and branded its own Onsport Fitness portfolio.
This has involved working directly with factories in Taiwan and China, its first 40-foot container of products selling out within three weeks of being on sale. Wilson plans to increase the range to more than 60 strength, training and recovery products, the General Manager highlighting likely stock shortages in 2021 as extra incentive to ensure its own products can plug any gaps in the market.
“We plan to supply Australians with great value, great quality sporting equipment,” he says.
“We will, however, ensure these products are positioned to compliment all our existing big-name brands and safeguard, not cannibalise, the sales and relationships we hold very dear and attribute our business’s total success too.
“Selling the major brands will always continue to be our focus as a business – however, we do now see an opportunity in designing and expanding the Onsport Fitness range into a mid to entry level player across a large number of categories such as women’s and men’s activewear, sporting equipment and the already successful fitness accessories.”
Wilson also identifies the importance of enhancing the consumer experience alongside growing its product ranges.
Here, Onsport is in the midst of a project designed to offer customers ‘sports fan experiences’ directly via its platform and future marketplace. This will enable users to access one off opportunities with their favourite sports stars and teams, all while being able to use their loyalty points as a means of payment (or accrue points through purchasing these experiences).
All of this will be heavily promoted, another ongoing priority for Onsport being the development of its digital marketing platforms.
“We’re especially looking at social media and how it is allowing us to reach specific audiences with specific messages,” Wilson adds.
“We’re also keen to see how other digital marketing technologies, such as voice search, evolve over the next year or so and what opportunities these will bring to reduce friction for online shoppers and enrich the customer experience.”
BUILT ON CULTURE
A physical store presence is the final piece of the experience puzzle that Wilson is eagerly exploring.
Although COVID-19 has brought about dramatic drops in footfall to bricks and mortar shops all over Australia, the General Manager is a firm believer that Onsport’s future involves a balance between online and physical footprints.
He envisions a boutique style experience offering the major brands in the Onsport portfolio, with options to click and collect for marketplace customers, including those buying through third parties.
This will require new expertise to enter the company, which prompts Wilson to describe what he believes is his most important duty as General Manager – getting the best out of the company’s people.
“As the leader of the business, I feel it is ultimately my responsibility to create an environment for the success of the team,” he explains. “However, I also believe each team member is responsible for ensuring that they step up for their own personal success.
“I believe Onsport provides such an environment and is built primarily on these empowered individuals and notice regularly that if any employee feels they truly own their role, they are far more engaged in their workday and require less management.”
And this has been exacerbated by the unprecedented circumstances witnessed in 2020 to date.
For Wilson, it has highlighted the importance of trust in positive staff to management relations, especially as many employees are now working from home and given more autonomy in their roles.
The General Manager is therefore confident about what lies ahead, concluding the conversation with another important lesson that has emerged from the coronavirus challenge.
“These past six months have shown me how important it is to demonstrate vulnerability and truth to the team,” he says.