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The most successful Play It Again Sports businesses started because of someone trying to solve a basic issue. That was certainly the situation for Martha Morris. The year was 1983. She was attempting to sell her nearly new backpack for around $200. To solve her own problem, she started Play It Again Sports in Minneapolis. The store was a consignment retailer of old athletic equipment and gear. The first year of operation, Morris sold $120K in used sporting equipment, giving her business model validation. What she did not know was the model that would eventually become the basis of the multi-million-dollar franchising powerhouse, Winmark.
The opportunity was apparent, so Morris requested assistance to Franchise Business Systems Inc. Business partners K. Jeffrey Dalhberg and Ronal G. Olson were veteran franchise experts and took Morris on to help her begin franchising. Within about 18 months the chain had grown to 19 franchises across six states. This resulted in Morris to look into franchising as a way to expand her company.
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 buying permission to Once Upon A Child. The mid-90’s saw the business partners owned a franchising corporation. The company went public and, after several name changes, eventually became the modern-day Winmark Corporation.
Between 2015 and the year 2020, between 2015 and 2020, Sporting Goods Stores industry in the US decreased at an annualized rate of 2.6 percent. One of the main factors contributing to the decline in revenue is pressures from online retailers. Both are benefited by economies of scale, which allows them to offer similar products for less. Therefore, businesses in the industry must be competitive in price. This isn’t easy for traditional sports goods stores to compete with because they have only a few economies of scale comparison to mass retailers. Thus, they must to improve their processes, while impacting profitability. [1] Another factor could be the Corona virus. The industry is unable to reach its goals due to stores that are not essential have shut down and consumers are staying in their homes.
Over the next five years the outlook for the industry is optimistic. It is predicted to expand at an annual rate of 1.2 per cent until 2025. The growth will be driven by an increase in disposable income as well as healthier lifestyles. As people of all ages groups incorporate healthier lifestyles into their lives as a whole, the market expects sports participation to increase by 1.5% each year. Most of the growth in revenue will result from the demand for athletic clothing, as participation in low intensity and individual exercises like walking and swimming, will increase.
The competition and intensity within this 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 primary attention is on new products for the latest fashions in fitness. [2] For Play It Again Sports, their position in the market allows them to gain a lower portion of the market however, they have a targeted group of customers that have a higher life-time value. This is why their main competitors are companies with a similar offering, like SidelineSwap, an online sports equipment buy and sell store. The company differentiates itself by selling gear that was owned previously by amateur athletes.
Parents of children involved in sports programs choose for resales because it’s less expensive than purchasing new. As children move on in the sport, they can keep shopping with Play It Again Sports by trading in their equipment to purchase the next size up. This can increase the overall worth of the customer.
Play It Again Sports’ earns profits as a traditional buy-and-sell retailer. They purchase gently used and or brand new products at a discount and resale to end customers at a higher price. Due to the relatively competitive market in the Sporting Goods Stores industry, businesses like Play It Again Sports are profitable due to their ability to manage expenses and gaining customer loyalty. The greater the extent to which they can create relationships with their clients, the more value they will receive from their customer base as they will become repeat customers which will drive their stock and purchasing.
One Of Play It Again Sports’ major factors that have helped it succeed are the benefits that it provides its market. Parents looking to have their children participate in (sometimes more than one) sports are faced with a number of obstacles because new equipment is expensive. As a seller of gently used sporting equipment, franchisees may lower the cost of participation in sports, allowing parents to take part their children in multiple sports.
Furthermore, by positioning itself as a retailer and buyer in sports equipment Play It Again Sports can realize the lifetime value of the customer. As the children age out and out of the gear, parents are able to sell the equipment for Play It Again Sports. Furthermore, they are incentivized to help reduce costs of buying an additional set.
In the face of the pandemic, Play It Again Sports must reevaluate the needs of their target customer to determine the best product mix. Sports for teams may not return for athletes in the early stages of their careers. This will dramatically impact the business’s proposition to current customers. Play It Again Sports should engage with customers to have a conversation for two reasons. In the first place, it can serve as a way to better understand the way parents spend their kids’ leisure time. The second reason is that Play It Again Sports can be a partner for parents by coming up with imaginative ways to keep their kids entertained and increase their physical fitness. This can help retain customer loyalties while also generating new value propositions for existing products.
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