Dick's Sporting Goods has come a long way from its founding in 1948 by Dick Stack as a bait and tackle outpost in upstate Binghamton, NY. There are now some 600 Dick's stores nationwide, and counting.

And from the perspective of retail, it’s actually come quite a ways in recent years and months, too, thanks to a concerted all-channels effort and a close watch on merchandising.

Shifting categories

Mid-century bait-and-tackle retailers had a limited, but focused, range of goods. Shoppers knew exactly what they were looking for, and a good store would have it. These days, sporting goods retailers like Dick’s have a wide range of products on offer, from guns to yoga pants. Even the biggest stores have to decide how to divvy up the space.

Dick’s has mostly moved away from its outdoorsman roots, as gun, ammunition, and hunting gear sales taper off somewhat. It shifted many of those sales to Field and Stream specialty stores that first opened in 2013 and has since slowly expanded. The retailer acquired the naming rights from the iconic Field and Stream magazine, seeing it as a way to compete with stores like Cabela's that are focused on hunting, fishing, and outdoor gear.

"Dick's Sporting Goods originally began as a bait and tackle shop," said president and COO Joe Schmidt then. "The Field & Stream store will build upon both brands' heritage to provide an excellent customer experience for outdoor enthusiasts."

Sports: winners, losers, and kids

But the greatest action, really, and the greatest need for nimble adjustments to changing trends, is in the area of sports. The retailer caters to serious athletes, weekend warriors, and kids at all levels of play. It's a huge market, with a projected value of more than $63 billion in 2014, which doesn't even include bigger ticket equipment items like bicycles and kayaks.

On the losing end for Dick's in recent months along with hunting sales has been golf, in which sales, including at its specialty Golf Galaxy stores, have plummeted. Indeed, 2013 was the eighth straight year that more golf courses have closed than opened, according to the National Golf Foundation.

But, on the winning side, it’s also recently joined the so-called alth-leisure boom, driven largely by women, with yoga gear and yoga-inspired clothing — including a line by Carrie Underwood exclusive to Dick’s —  that isn’t necessarily worn just to exercise in.

“The strong performance across the remaining categories validates our merchandising and space allocation strategies that we put in place during this past year," Stack told analysts earlier this month. "The fourth quarter was a more promotional environment, as expected.”

Dick’s EVP, COO and CFO André J. Hawaux also noted that kids and moms have a lot of power to change the retailer’s focus.

Kids were inspired by the World Cup last summer, spurring soccer sales. He noted that, due to evidence that concussions can cause severe health issues, fewer moms are allowing younger kids to play football, so those sales are likely to increasingly be tempered. Lacrosse is great because it’s very popular among both girls and boys. The retailer is keeping a close eye on all of these trends so that it can anticipate shoppers' needs, he said.

Stores and concept stores-within-stores

Dick’s has spent most of the 21st century largely ducking the Amazon effect, which some observers attribute to its ability to sell firearms — one of the rare categories in which Amazon doesn’t compete. 

But it could be that the retailer’s close scrutiny of its merchandising needs, as detailed above, is also keeping customers coming through the door. Chances are that Dick’s has what most people are looking for when they need footwear, apparel, or gear for their sport or fitness activity. Right now, Stack and Hawaux say that new Dick’s stores are enjoying productivity of 94.7%. 

Dick's has had success with its hit store-within-a-store concept, an approach recently emulated by Best Buy in electronics. Dick's Sporting Goods stores feature "Nike Field House" and "Under Armour All-American" concept stores within them. Not only are those concept shops a draw, but the brands also help foot the bill for some of the interior design and fixtures, according to Christopher Svezi, an analyst at Susquehanna Financial Group​.

“Stores with these stores-within-stores have higher returns on investment and sales per square foot, and the margins are better as well,” Svezi told the Pittsburgh Tribune. 

E-commerce

And that is happily bleeding into its e-commerce performance: Hawaux says that 80% of the retailer’s e-commerce sales come from zip codes in or near areas with stores. That is, the retailer sees online sales jump wherever a new Dick's store opens; the retailer plans 45 new namesake stores in 2015. Dick’s saw 14.4% of its total Q4 sales come from online sales, up from 12.2% year over year.

Not surprisingly then, Dick’s is all in when it comes to omnichannel. The retailer has embraced sales and fulfillment efforts like ship from store, buy online-pickup in store, in-store returns for online purchases, and “endless aisle” initiatives that, for example, allow staff to place customer orders for anything not in on the racks. All of that blurs the lines between brick-and-mortar and e-commerce, using stores as warehouses and showrooms and using e-commerce capabilities to meet the needs of customers in stores.

It’s the kind of approach that has led New York University Stern marketing professor Scott Galloway to warn of the end of pure-play retail of either stripe. Galloway, in fact, puts Dick’s at the top of his top-10 list of "retailers playing offense" when it comes to their e-commerce efforts.

“We’ve found that these incredibly flexible robust warehouses are called 'stores,'" Galloway told Bloomberg. “People want access to products everywhere. This is the cross-fit of industry, it’s a warehouse and a store.”