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Retail Media Breakfast Club
Why Dick's Sporting Goods Is Rejecting the Retail Media Playbook | Dave Young's Bold Strategy
00:11:33
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Dave Young counts how many times he says retail media network during our interview. By his own Tally, it's about 10, which he says is about as many times as he says in a month internally, and that is deliberate. Dave Young, who joined Dick's Sporting Goods as vice president of retail media in late 2024, has decided that the category that that he nominally leads is described by a term that he would rather avoid. He calls what he's building a commerce enabled sports network. And that relabeling is positioning partly, but the argument underneath it holds up. The standard retail media playbook was built around strengths that most retailers don't have, and copying it is a sure way to lose. And he is not the only one landing in that place. Lisa Valentino at Best Buy ad said that she recently floated dropping the retail media name internally too. So there's just two executives at unrelated retailers that have independently decided that the category's defining term has become a liability. Today I'm going to read from a profile piece that I published to my column at the Drum back in June of this year. Let's listen. So in this case with Dave, his case starts with the question of where this whole playbook came from originally. RMN version 1.0, as he puts it, is based on recreating a shared playbook that others drafted. Reading between the lines, that is the Amazon, Walmart, eBay roundels of the world. And that format which dominates retail media, the sponsored product ad listings on an E commerce site is the format that those companies happen to be exceptional at because they have the search volume and the transaction density to make all of that work. So when a specialty retailer like Dick's stands up a retail media network by running the same sponsored product motion, it has volunteered to compete on the exact axis where the incumbents are strongest. And here's what Dave says. If I'm just trying to be meta, meta is going to do meta better than me. Amazon, you could go down the list. If I'm just pulling their playbooks off the shelf, they're going to be able to do it better. And this is similar to what I've shared in the past around the retail media doom loop that traps a lot of mid tier networks. It all comes back to this commodity format which is prone to routing spend towards whoever has the most scale. Differentiation is not a nice to have layer on top of sponsored product ads. It's a matter of survival. And so the differentiation that Dave Young is betting on at Dick's is a data asset that doesn't look like A typical retailer's Dicks sits on signals that span what he describes as roughly 45 million athletes that are addressable via Dick's Media. Key to the retailers universe is Game Changer, the youth sports app that has covered more games in a single spring weekend than what is played in the entire history of major league base baseball. Now it's worth being skeptical about what that actually buys him because we can predict what you'll buy next is a claim that pretty much every RMN makes. Kroger can see sunscreen and travel sized toiletries in your basket and conclude you're going on vacation. Amazon's entire recommendation engine is predictive as well, so inferring a bit little a life event from purchase. History is table stakes, not a moat. But what's different at Dick's is the specific kind of input that they're getting. Game Changer produces a life stage signal that isn't a purchase. It is a sports season that's starting a roster changing, a family moving its team registration from Seattle to Chicago. A grocery loyalty file can infer a move, but generally once you're already in the process of doing so. But Game Changer sees the team change before any related purchase happens because it sits in a part of these families lives that have nothing to do with shopping. So whether that signal actually outperforms a smart read of transaction history is what the next few years will show at the end. Sticks.
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breakfast now when I'm talking with retail media network leaders, I'm always interested in who they report to. And in this case Dave reports to the chief marketing officer and he says that that is part of what has let him live in the art of the possible, not just the P and L. He says if you report into a cfo, the conversation defaults to profit. If you report into the merchant organization, the aperture narrows to vendor relationships. Sitting under the CMO is what lets him frame a campaign as how is this going to drive outsized return for a partner like Adidas in addition to incremental return for Dick's Sporting goods? But where an RMN reports is a choice that comes with a cost as well. And Dave's framing is all upside. The reason most retail media networks don't don't sit under a CMO is that they're built as profit engines and reporting into a commercial or finance organization is what keeps them accountable to the revenue that they were stood up to produce. Creative latitude is exactly what gets squeezed when a network has to defend its number every quarter. Dave is betting that that latitude pays for itself, that the brand led the differentiated work generates revenue that the sponsored product motion can't or gets commoditized, and he's upfront that his team still has to hit their number. Now the clearest and most timely expression of that thesis is the World cup work that Dick's did with Adidas. A full omnichannel campaign with shared creative broadcast tv, ctv, E Commerce, social programmatic media, full store takeovers at Dick's House of Sport flagship stores, and Dave describes the in store piece as building soccer culture in America. Now a sponsored product ad network structurally cannot sell that kind of campaign. It's also a labor intensive end of the business. Most of it runs as managed service today, and Dave is candid that self service is still a few years out. He's not dismissing that potential scenario, but he's sequencing it behind this kind of differentiated campaign, and only where some feature is going to be actually worth a login rather than one more system becoming self serve that an agency ignores amongst 100 other ones. And that is a defensible read for a newer network. But it's worth setting up against more mature specialty networks like the Home Depot's Orange Apron Media, which has grown from roughly 30 people in 2020 to more than 400. And I talked about this a few months ago at its upfronts this year it made self service the through line of nearly every announcement on the explicit logic that the next phase of scale can't come from adding headcount. Now those two aren't in disagreement, they're simply at different stages of maturity. Both believe managed service alone doesn't scale. A future question at DIX will be whether that differentiated model survives the transition to self serve intact, or whether the same scaling pressure that pushed Home Depot towards automation eventually pulls Dicks into the commodity formats that he is currently defining himself against. Now there's a section of this piece I'm not able to cover off in our 10 minutes today talking about the non endemic bet that Dick's is making. If you're interested in hearing more about that definitely click through to the full post that that is shared in the show notes here. But I want to just fast forward but I'm just going to wrap it up here. It's a fool's errand to believe that you can beat Amazon at its own game. I've made that argument before and Dave makes it from the inside of Dick's Sporting Goods. The networks that win will be the ones that lean into what they actually have as retailers. The category expertise, the stock footprint, the love that a generalist marketplace can't manufacture but a specialist can. And as media networks, a model genuinely shaped to fit the retailer behind it, rather than a borrowed wholesale playbook from the companies that were there at the beginning. Now, what that fit looks like is different at every retailer. And for Dave at Dick's, it's the CMO reporting line and the youth style sports data. For another network, it could be the scale of the ambition and the speed that its internal targets demand. The retailers who are successful media networks know who they are and they build a media operation that reflects their strengths and limitations. And that is what Dave's relabel is really conceding Commerce Enabled Sports Network isn't a cleverer name for retail media. It's a signal that following the category template won't work here. Dick's knows who it is and how it can compete. It's running its own playbook, which for a retailer that isn't Amazon, is the only one worth running. Thanks for tuning in. I'll catch you tomorrow.