Diehard sport fans don’t shop at Amazon, according to SIGNA Sports CEO Stephan Zoll. Instead, they go to specialist retailers able to provide professional insights and expertise enabling the shoppers to level-up their game.
“Consumers really love that experience,” Zoll says.
Of course, he is speaking from self interest. As the top dog of sports ecommerce company SIGNA Sports United, Zoll is betting that the Berlin-headquartered business will be able to hold its own against the likes of Amazon, Alibaba and eBay because it isn’t offering a one-size-fits-all solution, but a bespoke experience catering to the particular needs of sports enthusiasts.
“We believe that the specialisation in our categories really makes a difference,” Zoll tells Verdict.
That’s also why you won’t find a catch-all online platform a la Amazon Prime with SIGNA Sports United branding splattered across the top. Instead, the German company relies on a network of more than 500 offline stores and more than 1,000 partners, all individually branded with their own identities. This, the argument goes, is to provide consumers with the right service just for them.
All these brands are tied together by the fact that they are powered by SIGNA Sports United’s ecommerce platform. By using the technology, the network members are able to check inventory, conduct online sales and manage online orders. Today, SIGNA Sports United brags that it has over four million customers buying biking, outdoor sports, team sports or athleisure products via its network. Its brands include Fahrrad.de, Bikester, Probikeshop, Campz, Addnature, Outfitter and Stylefile.
In other words, the company has come a long way since it was founded by the SIGNA group six years ago. The SIGNA group is a massive conglomerate headed by Austrian investor Rene Benko. It covers several verticals, including real estate and department stores. SIGNA Sports United first saw the light as part of the company’s retail segment.
“They saw the opportunity in the sports ecommerce world where companies serve customers in a very strong way,” Zoll explains. “And that is a proposition that’s a) defendable against generalists like Amazon, and b) has a lot of growth ahead of it and can be very profitable.”
Zoll himself was recruited to lead SIGNA Sports United in 2018, having previously been the managing director at eBay Germany and eBay Europe. He joined eBay from the Sears retail group in the US, where he’d clocked up experience as president of online.
When Zoll joined SIGNA Sports United, the company was just in the process of creating the platform that today serves as the backbone for its network.
“I basically came aboard to deliver that,” Zoll says.
In the years since, SIGNA Sports United has acquired firms like the TennisPro Group and signed partnership deals with organisations like the ATP and the International Tennis Federation, the later via an exclusive partnership with its subsidiary Tennis-Point.
Having already established a presence in Europe, the company also entered the US market in February by acquiring the Cincinnati-based online tennis retailer Midwest Sports. In May, it inked an agreement to acquire US online tennis retailer Tennis Express.
The company has also made a few tentative steps into the Asian market, with AEON having acquired a 7.5% stake in the company in 2018.
SIGNA Sports United is also rumoured to be considering a public float via a special purpose acquisition company, which is commonly referred to as a SPAC. A Reuters report from April, citing sources familiar with the deal, suggested that the debut could value the company at $4bn. The sources said that SIGNA Sports United was working with several banks, including Citigroup, to make the blank check company float happen.
But when the question of a public debut comes up, Zoll’s press handler quickly cuts off the conversation.
“This we can’t talk about at the moment, I’m afraid, but we can come back to you when we can,” she says.
So instead the topic turns to Covid-19 and what it has meant for the business.
“Online over all has benefited,” Zoll says.
Indeed, the $2.2tn ecommerce market was expected to grow at 40% in 2020 to account for 12.7% of the retail market, according to a GlobalData thematic research report.
“Lockdowns and social distancing accelerated the adoption of ecommerce, with consumers getting accustomed to online shopping during the pandemic,” the report stated. “Covid-19 has led to an unprecedented number of high street closures and caused foot traffic to fall, leaving shoppers with little choice but to purchase items online. Even consumers that had previously been reluctant shop online have embraced ecommerce. Online demand will remain strong post-pandemic”
However, Zoll says that while SIGNA Sports United has benefited overall from this migration online, some sports enthusiasts have not been as willing to go on spending sprees simply because they were unable to enjoy their passion. For instance, football and tennis players in some regions were unable to enjoy the sports because of social restrictions. Despite this, he’s bullish about his network retailers’ chance to survive the coronavirus.
“Good companies are good companies before and after Covid,” he says.