Dick's Sporting Goods 2010 Annual Report Download - page 30

Our advertising is designed to create an “event” in the stores and to drive customer traffic with advertisements promoting a wide
variety of merchandise values appropriate for the respective holiday or event.
We also sponsor professional sports teams, tournaments and amateur competitive events in an effort to align ourselves with both
the serious sports enthusiast and the community in general.
Our Dick’s Sporting Goods “ScoreCard»Rewards” loyalty program is a free program that allows shoppers to earn rewards while
making purchases at our stores. Once registered, a member earns points for shopping and will be awarded a $10 reward
certificate for every 300 points they earn. Program members also receive exclusive deals, new product alerts and insider access
via our direct marketing programs. Customers receive direct marketing programs based upon their sports preferences and past
purchase history. “Game On” is our special member-only magazine sent to our most loyal shoppers at the beginning of each
season.
Our “Advantage Club” customer loyalty program at our Golf Galaxy stores is designed to create a direct relationship with our
customers using advance notice of special in-store events, exclusive offers and information. Membership in our Advantage Club is
free. We target our direct mail catalogs and e-mail offers to this group of customers who generate above average response rates,
thus enhancing our marketing efficiency. Members earn points for shopping and will be awarded a $10 reward certificate for every
300 points they earn.
Information Systems
Our core merchandising, allocation and replenishment systems are from JDA. The data generated by these systems are
consolidated into a comprehensive data warehouse application that was purpose-built to provide near real-time performance
information across a broad spectrum of critical metrics for our business. All functions of the business have access to highly
accurate and consistent information related to the various components of sales, inventory, and margin from department to SKU
level. Our stores are on-line to the corporate data center and utilize high-speed data communications to update sales data
continuously throughout the business day while also enabling our associates and customers to access the internet for additional
sales opportunities on the Company’s websites via POS registers, associate ordering system (“AOS”) kiosks and special services
computers. We utilize a highly optimized and customized version of the Advanced Store POS application software from NCR in
both our Dick’s and Golf Galaxy stores.
The enterprise data center located within our corporate headquarters, which we refer to as the Store Support Center (“SSC”), is
equipped with mainframe and mid-range computers and storage systems from IBM, integrated with voice and data networking
communication equipment from Cisco. This facility has been built to support the future growth of the Company.
Our end-to-end supply chain management suite of software applications is from Manhattan Associates and operates our three
distribution centers from the central computing complex in our SSC. The Company’s Financial and Human Resource Management
systems are PeopleSoft applications provided by Oracle. All third party applications are integrated and enhanced using
state-of-the-art software tools and techniques developed internally.
Purchasing and Distribution
In addition to merchandise procurement, our buying staff is also responsible for determining initial pricing and product marketing
plans and working with our allocation and replenishment groups to establish stock levels and product mix. Our buying staff also
has frequent communications with our store operations personnel to monitor shifts in consumer tastes and market trends.
Our planning, replenishment, allocation, and merchandise control groups are responsible for merchandise allocation, inventory
control and automated replenishment systems. These groups act as the central processing intermediary between our buying staff
and our stores and also coordinate the inventory levels necessary for each advertising promotion with our buying staff and our
advertising department, tracking the effectiveness of each advertisement to allow our buying staff and our advertising department
to determine the relative success of each promotional program. In addition, these groups’ also manage the implementation of
price changes, creation of vendor purchase orders and determination of inventory levels for each store.
We purchase merchandise from approximately 1,200 vendors, and we have no long-term purchase commitments. During fiscal
2010, Nike, our largest vendor, represented approximately 14% of our merchandise purchases. No other vendor represented 10%
or more of our fiscal 2010 merchandise purchases. We do not have long-term purchase contracts with any of our vendors and all
of our purchases from vendors are done on a short-term purchase order basis.
We operate three regional distribution centers: a 725,000 square foot distribution center in Plainfield, Indiana, a 657,000 square
foot distribution center near Atlanta, Georgia, and a 601,000 square foot distribution center in Smithton, Pennsylvania. Vendors
10 Dick’s Sporting Goods, Inc. ¬2010 Annual Report