#76 The Ballketing Letter
Deporvillage´s quest to lead the sport´s apparel & equipment category, more resources to understand web3 in sports, a crash-course on B2B sales & marketing, measuring metrics that matter, & more!
Hey there Ballketers,
Welcome to post #76! This week:
How Deporvillage is becoming one of the prominent sports apparel & equipment retailers in Europe.
A special callout to the resources related to understanding web3 and to level up your B2B sales & marketing game.
And, of course, the resource center is updated with the latest business content, you can find the link below.
Let´s get down to business!
"The most important thing is to try and inspire people so that they can be great in whatever they want to do."
Kobe Bryant
Credit to this week´s quote of the week goes out to “Kraken´s Intelligence newsletter” and it is a great reminder for those looking to lead top-performing teams.
Deporvillage: Their journey towards dominating the sports equipment category
Origins: When “timing” & “skills” combine to create a winning business
Deporvillage was founded back in 2010 by two entrepreneurs from the region of Catalonia, in Spain. Initially conceived as an online retailer that failed to become “everything to everyone,” they decided to niche down and specialize in selling cycling equipment to then expand from there.
Today, Deporvillage has grown to become one of the biggest eCommerce in Europe that sells sports apparel and equipment across pretty much all categories.
Contrary to other examples we have shared in the past, the founders were not particularly as passionate about sports as they were for business. However, they did bring a set of skills to the table that combined with an increasing acceptance of online purchasing by users.
Once again, being able to nail “timing” while building a solid and capable business is at the core of a successful business.
The co-founders invested their first €100K on the web, stock, and marketing before entering a competition through Seedrocket, which would open doors for further rounds of investment.
Revenue Evolution: The Hockey Stick growth curve
The rate of scale behind Depovillage is remarkable. The following graph demonstrates a clear “hockey stick” trend, with a particular focus on how the lockdowns of 2020 catapulted the business to a new level.
As of today, highlights of their current business metrics include:
Revenues of €160 million in 2021 (+40% growth vs 2020) and an objective of €200 million in 2022
Current EBITDA is around 7%-8%
There are approximately 2.5 million customers registered in their eCommerce, with an average of 5K daily orders
Almost 54 million visits to their store
80% of their business is sourced in southern European markets that include Spain, Portugal, France & Italy. From a supply chain perspective, these markets make complete sense for them.
Their portfolio includes 100K products & 600 brands
The pillars of their marketing strategy
In the beginning, their main channel to drive acquisition was SEO / SEM. At a given time, they must have spent somewhere between €100K-€200K in 2018, which was about 20%-25% of their budget and their AVO was around €30 per customer. Hopefully, this provides a good reference for the budget needed in Adwords to create meaningful results.
Facebook did not drive much acquisition for them, as they perceived it as a channel for more “impulse-driven products” and with lower price points. Similarly, in the past they also invested in TV advertising; while they do believe it was a good way to amplify reach, they do not attribute relevant levels of revenue growth in relation to the investment they made.
From a pricing perspective, they never aimed to compete in the lower segments. They would rather have a more “margin” driven approach vs a “volume” driven approach.
As time progressed, they were able to lower CAC through “repeat purchases,” which means they balanced better between “performance” based campaigns and “brand” based.
A key channel for them today is email marketing, which they use to send personalized offers and discounts to several cohorts.
One of the key aspects of their brand-building efforts was their capacity to implement 24-hour deliveries, which helped them achieve high NPS scores. As a matter of fact, they are another example of an eCommerce brand that has implemented AI-powered solutions to forecast demand, based on past purchases, trends, seasonality, etc.
As with any eCommerce, logistics and operational excellence is key for two main reasons:
Ensure a positive customer experience
Drive profitability for the overall business
The future: Creating a titan in the sports apparel space
While the future for Deporvillage looks promising, there are 3 elements that we believe deserve to be highlighted:
In 2021, Deporvillage was acquired by JD Sports, through ISRG (Iberian Sports Retail Group) for €140 million. ISRG is a conglomerate composed of Sprinter (including their merge with Portuguese retailer, Sportzone), JD Sports, and, Deporvillage. While it may seem these brands compete against each other, they actually are complementary:
Sprinter is focused on the “Entry Level” segment of the athletic performance market
JD Sports is more “leisure” oriented
Deporvillage is for customers who want to upgrade their athletic performance
Thanks to this acquisition, they are able to partner with Sprinter to open physical retail stores. Initially, it seems these stores will be centered on offering “cycling-related” products, mimicking their origins and, focusing on cycling as the foundation for future growth.
This was the rationale behind the launch of their own apparel brand back in 2019, Finisseur, which offers apparel and equipment for amateur cyclists. From the looks of it, the launch is a clear success so far, as it was able to achieve €2,7 million in revenues during 2021 (+120% vs 2020).
This strategy reminds us of what we covered in The Ballketing Letter #74, which discussed Futbol Emotion´s marketing strategy. Again we see an example of a business looking to “win” by building their foundation on a fantastic digital service, a physical product, and, an in-person experience.
Moreover, these brands are making huge efforts to own the entire purchase experience. It makes sense; when dynamics push the boundaries of competitiveness, being able to deliver a consistent brand experience across all channels (digital & physical) is key for differentiation. Outsourcing elements of the buyer journey puts the consistency of the brand experience at a risk.
This is one the of key reasons why top sport organizations, including retailers or even professional sports clubs, are embracing D2C initiatives. In the future, we hope to bring you even more examples so you can learn from the best in the industry and apply those lessons to your own strategy.
Fitness industry masterclasses
The two key traits that define SoulCycle´s business model evolution
A complete overview of how SoulCycle is adapting to the current state of the fitness industry on the Fitt Insider podcast. Two main lessons stand out for us:
You need an equilibrium between “staying ready” & “being poised enough to understand the timing of the market”
The key is to be able to read how your brand can fit into emerging customer behaviors; how your core business can add value to the new landscape
Scaling to 100 million users in 4 years
The Breakout Growth Podcast hosts BetterMe´s founder & CEO in a “growth masterclass” for those interested in the fitness industry. There is plenty to learn from a business that has acquired more than 100 million users in a little over 4 years in terms of user acquisition, testing and iterating the business model or “failing fast & cheap.”
More importantly though, given that BetterMe is founded an based in Ukraine, we want to support the hosts’ decision “to share this episode now in the hopes that it could help Victoria amplify her messages to the growth community asking for help and support in Ukraine.”
Understanding how web3 dynamics can help your sports business
How to monetize community in Web3
This episode of Inbound Success covers everything from defining what Web3, crypto, the blockchain, and NFTs are, to explaining why DAOs could be a critical tool to monetize your community of fans or customers.
It even goes into detail using examples from the sports industry, so make sure you check this one out.
Discord: Origins & Growth
It is definitely one of the platforms of the moment, particularly if you are involved with any web3 initiative. So we thought it would be interesting to understand the origins behind Discord as shared by its founder on How I Built This. Perhaps it may provide some insights into how to leverage the platform best
Resources for developing a B2B “A-Game”
A “lead management” masterclass
If you work in B2B sales / marketing, this episode of The Marketing Movement can be of great value. It goes into full detail on “Lead Management;” including what it is, the frameworks, knowing when leads enter and exit the pipeline, the three elements to categorize potential buyers, adapting contact forms to the stage of the funnel or, the best attribution best practices.
A 3 step framework for B2B lead generation
Sculpt shares a simple yet insightful three-step framework for those of you in B2B marketing:
Define the Audience
Define the Offer
Define the Experience
How to calculate 15 business metrics that matter
Hubspot shares a detailed and useful article for those looking to set up or review how you measure some of the “metrics that matter” for the success of your business. It includes explanations, formulas, and examples...
More sport organizations that are helping carry the flag in the fight against climate change
Real Betis is another prime example of a top-tier soccer club embracing the fight against climate change. The Sustainability Report shares the details behind their “Forever Green” match this upcoming weekend which includes using a kit made with recycled materials, planting a tree before the match and even empowering their fans to do the same for 1€.
And that does it for The Ballketing Letter #76! Thank you if you made it to the end of the post and, if you have any feedback, please reach out. If you crave further resources and enhance your learning, be sure to check out our resource center!
Finally, if you believe someone would benefit from reading The Ballketing Letter, do not hesitate to send it over to them!
Keep safe.