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Play It Again Sports

The most successful businesses start because of someone else trying to solve a simple problem. The same was true for Martha Morris. The year was 1983. She was attempting to sell her brand new backpack at $200. To solve her own problem she founded Play It Again Sports in Minneapolis. It was a consignment store of used athletic equipment and equipment. In the initial year, Morris sold $120K in used sporting equipment, giving her business model a boost. What she didn’t realize was that this model would become the foundation of the multi-million-dollar franchising powerhouse, Winmark.

In recognition of the opportunity, Morris enlisted help by Franchise Business Systems Inc. Business partners K. Jeffrey Dalhberg and Ronal G. Olson were veteran franchise experts and took Morris on to help her break into franchising. In just about 18 months the chain grew to 19 franchises spread across six states. This resulted in Morris to explore franchising as a method to grow her business.

In the year 1990, Dalberg and Olson were able to see the opportunity and bought Play It Again Sports from Morris. They continued to expand their involvement in franchising , by purchasing the rights to Once Upon A Child. In the mid-90’s the business partners had established the franchising business. They went public and, through a few name changes, became the modern day Winmark Corporation.

Sporting Goods Stores industry

Between 2015 to 2020, between 2015 and 2020, Sporting Goods Stores industry in the US declined at an annual rate of 2.6 percent. One of the primary contributors to declining revenues is pressures from mass merchandisers and online retailers. Both of these groups benefit from economies of scale that allows them to offer similar products for less. In turn, companies that are in the business must compete on price. This can be difficult for traditional sporting goods stores to do since they have very few economies of scale comparision to big retailers. This means they have to streamline their processes while impacting profitability. [1] Another reason to this is Corona virus. The industry is not able to attain its goal of revenue as non-essential stores have closed and customers stay at home.

In the coming five years, industry outlook is optimistic. The market is projected to expand at an annual rate of 1.2 percent through 2025. It will be caused by the increase in disposable income as well as healthy lifestyles. As people of all age groups begin to incorporate healthier lifestyles into their lives as a whole, the market expects the number of sports participants to increase by 1.5% each year. The bulk of the growth in revenue will be due to the demand for athletic apparel, because participation in less intense as well as individual activities like walking and swimming, will grow.

Customers and competitor

The competition and intensity in the Sporting Goods Story industry is moderate. Stores like Bass Pro Shop and Dick’s Sporting Goods each contribute between 12 – 15% of the percentage of market shares, their main attention is on new items that are designed to keep up with the latest trend in fitness. [2] For Play It Again Sports, their unique position allows them to take on a smaller share of the market, but with a target group of customers that have a higher long-term value. To put that into perspective, their direct competitors are businesses offering a similar value offer, such as SidelineSwap, the online sporting equipment purchase and sell business. The company distinguishes itself by offering equipment that was previously owned by amateur athletes.

Parents of children enrolled into sports programs opt for resale as it is cheaper than purchasing brand new. As kids progress through their sport, they can keep shopping on Play It Again Sports by trading in their equipment for the next size. This will increase the lifetime worth of the customer.

Play It Again Sports’ business model

Play It Again Sports’ generates revenues as a traditional buy and sell retailer. They buy gently used or new items at a cost and sell them to consumers at a price that is higher. Given the moderate competitive landscape within the Sporting Goods Stores industry, companies such as Play It Again Sports are profitable by managing the costs and encouraging customers to stay loyal. The longer they are able to build relationships with their clients more benefit they can receive from their existing customers since they will become repeat customers, driving both their inventory and purchases.

Play It Again Sports’ Success Factors

The one among Play It Again Sports’ most important factors for success can be attributed to the high-value proposition it offers its target market. Parents looking to sign their children up for (sometimes several) sports are faced with a number of obstacles as new equipment can be expensive. Being a retailer of gently used equipment for sports, franchisees can reduce the cost of participation, allowing parents to engage their kids in multiple activities.

Additionally in its position as a seller and buyer in sports equipment Play It Again Sports can help to realize the entire lifetime value of the client. As the children get older, they can dispose of their equipment, their parents can return the equipment to Play It Again Sports. Furthermore, they are incentivized to help reduce costs for purchasing another set of gear.

Looking Ahead

With the threat of pandemic, Play It Again Sports will have to reconsider the needs of its target customer in order to identify the best product mix. The team sports program may not be reinstated for the young athletes. This will significantly affect the value proposition of the company to their current customers. Play It Again Sports should engage with customers in an open dialogue in two ways. It will first serve as an opportunity to understand how parents are occupying their children’s leisure hours. Second, Play It Again Sports can be a partner for parents by coming up with creative alternatives for pastimes and physical fitness. This will help keep customers loyalty and also create new ways to increase the value of existing products.

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