While Intersport's retail partners started piloting its updated store concept (see the article in this issue), Intersport International Corporation (IIC) has been making rapid strides with its international digital retailing platform, which went live in the last few days in Denmark and the Netherlands.

The platform was launched by IIC's digital hub in Amsterdam, Intersport International Services (IIS), which got started in Amsterdam in February. Under the leadership of Mia Ruotsala, chief digital officer since April, the team has built an online retailing platform and some of the infrastructures required to support it. IIS has developed in-store kiosks and a staff app that allows store employees to check product details and availability on a portable device, making it easier for them to engage with the customers.

The Dutch and Danish Intersport licensees who have adopted the international digital platform had already established an online retailing platform for their own retail members. They have agreed to switch to a customized version of Intersport.com in order to make their online operations more efficient, and to take advantage of international resources and partnerships.

The central platform developed by IIS is meant to provide improved quality at a lower cost than the countries could achieve on their own. It allows Intersport to automate contents across all sites and leverage partnerships with brands and key platforms for digital marketing, such as Google and Facebook. It makes use of customer relationship management, artificial intelligence and other technologies provided by Salesforce Commerce Cloud, the system previously called Demandware. In exchange for the use of the platform, national organizations will pay a revenue-based fee to IIC. The central organization is currently investing ahead of the revenue inflow. It will pump the fees back into the platform in order to continuously improve its quality.

Ruotsala told suppliers at a meeting in The Hague earlier this month that there was outstanding potential for Intersport's online operations because the retail group already has a strong brand and 3,500 stores trading under the same banner. She estimated that the click-and-collect function could easily make up 20 to 30 percent of Intersport's online sales as a surprisingly large proportion of people buy online but prefer to pick up in store - even more so when the store can actually provide service and advice.

Currently, purchases made by the final customers over the internet make up only about one percent of Intersport's total retail turnover, with wide differences from one country to the other, but the target is that online sales through intersport.com alone should account for 10 percent of the turnover generated by Intersport stores by 2020. IIC estimates that this fits with the current development of online retail sales in the sporting goods sector – with many of the leading brands and sports retailers nearing a rate of 5 percent, and pure e-tailers like Amazon, eBay or Zalando taking up another significant share. The rate is much higher for Intersport retail members like Sport Scheck in Germany, which has been supported by a big retail and e-commerce pro like the Otto Group.

Jan Willem Juffer, managing director for the sports retail business at Euretco, the Dutch licensing partner for IIC, said that the move has been supported by retailers running all 75 Intersport stores in the Netherlands. Its previous national intersport.nl platform made up about one percent of the sales of Intersport retailers in the country. Adding sales generated by the individual online stores operated by the retail members, the share amounted to 3 percent.

With the new platform, Euretco continues to deliver online orders from its warehouse in the south of the Netherlands, and the online shopper is requested to pick one of the affiliated Intersport stores, which will then get a fee on the purchase. This allows all of the retail members to potentially share in the revenues from the online platform, and it encourages them to build relationships with their consumers, notably through loyalty programs. The system underscores the importance of the physical stores, as about 40 percent of all of the online orders placed with intersport.nl have been subsequently picked up in the stores.

Euretco is holding talks with its retail members to move toward further omni-channel integration by unlocking their inventories for the common online platform. The Intersport store in Nunspeet should be the first in the Netherlands to do so later this month, with others to join in the months ahead. The integration process will be possible following Euretco's investments in the last few years to align the inventory system of the buying group with those of its members. Separately, Euretco is also launching a nationwide customer loyalty app.

Preparations for talks are underway to get IIC's digital platform going in several other European countries. Spain, which was one of the three pilot countries together with Denmark and the Netherlands, will switch to the IIC platform in the first quarter of 2018. Intersport Sverige is apparently considering a switch around the end of next year. France and Germany are both in the process of upgrading their online stores, so far with their own platform, but with the same strategic approach. IIC will work out the way forward once it has evaluated results in the three pilot countries.

Ruotsala acknowledged that IIS has received plenty of support from suppliers. Some of them have dedicated employees working at Intersport's digital hub in Amsterdam. Intersport is also holding talks with suppliers to gain access to their warehouses.

Victor Duran, IIC's chief executive, reiterated during the presentation of the new program in The Hague that Intersport is targeting sales approaching €14 billion through affiliated retailers in 2020, compared with sales of €11.2 billion in 2016, which would imply average compound annual sales growth in the range of 5 percent. The retail turnover increased by only 2.6 percent to €8.15 billion for the first three quarters of this year.

The international retail organization wants its retail members to achieve a realized margin of at least 47 percent and an operating profit (Ebit) margin of at least 8 percent. IIC is also aiming for the affiliated retailers to generate about 30 percent of their turnover through Intersport's exclusive brands.

Duran called for suppliers to support Intersport's upgrades by providing the products most suitable for its multi-specialty positioning and by developing joint category plans, including the related marketing investments. The brands were encouraged to become partners in Intersport's digital efforts by contributing resources for the development of omni-channel retailing.

After the rapid expansion of the Intersport network driven by his predecessor, Franz Julen, in recent years, Duran wants to focus on the implementation of the updated store concept and omni-channel integration. He said IIC is taking a pause in terms of new market openings, although bolt-on franchising agreements are not excluded in the short or medium term.