Food and gift basket sales increased 4.7%, but total e-commerce, which includes online and telephone orders, increased less than 1%.
On a September afternoon when he’s supposed to be on the mound for his company’s softball team, Fogdog Sports CEO Tim Harrington was huddled in his office, pitching something far bigger for the fledgling e-retailer. Just how big becames clear when the news broke a few days later. In a double play, Fogdog announced an exclusive, six-month deal to sell the full line of Nike Inc. sports gear at a discount. What’s more, Fogdog unveiled plans to go public, backed by Nike’s 12% stake in the company.
The moves put Fogdog into position for reaching Harrington’s goal-becoming the Web’s next category killer, a $1 billion company in five years. “We want to be the first-ever global brand in sports,” he says, “a collection of authentic specialty stores all under the Fogdog umbrella. It’s retail sports as an all-encompassing concept.”
A seasoned pro
That’s a bold strategy for a company that set up shop only a year ago in a line of business with no dominant retail players, hundreds of closely guarded specialty brands and a distribution channel with more twists and turns than a Barry Sanders blast. Well-known brands like Nike have been wary about letting e-stores sell their goods. But Harrington comes to the job a seasoned business pro. He spent 20 years climbing the ladder at International Business Machines Corp., where he gained deep experience in corporate strategy, operations, sales and marketing.
IBM also gave Harrington the time and place to make a career switch, sending him off to Stanford University’s graduate school of business in 1995. There, he indulged a lifelong passion for athletics by researching the sporting goods industry. After finishing his degree, Harrington decided not to return to IBM. He signed on at Cobra Golf Inc., as director of national accounts, a dream job for an avid golfer like Harrington. “I wore two hats there,” he says, “developing the entire corporate strategy, setting up a string of accounts and a sales force, and getting into an Internet strategy.”
After just six months, Harrington was on the move again. He left Cobra for an Internet pure-play, GolfWeb, an information site based in the Silicon Valley. As general manager, he continued building up the site and soon negotiated its sale to CBS SportsLine, putting himself out of a job. But not for long. Since his days at Stanford, Harrington had been building a wide network of contacts in both sporting goods and the Internet. In June 1998, he joined Fogdog, a timely intersection for both, he says: “I know the industry, I know the Internet, I know big business and the importance of dealing with customers.”
The Stanford connection
Fogdog was the brainchild of three Stanford graduates-Brett Allsop, Andrew Chen and Robert Chea-who met while living in the university’s Cedro dormitory. Allsop remains the e-retailer’s chairman and heads its international division, based in London. Chea and Chen hold vice president posts.
The three got their start in site development. In 1994, they formed the Cedro Group, which created Web sites for more than 100 sporting goods companies and trade associations. Eager to make the leap to e-commerce, in June 1998 the trio revised their business model and launched SportSite.com, Fogdog’s forerunner. Their first round of funding netted $5 million from J.H. Whitney & Co., Draper Fisher Jurvetson, and Marquette Venture Partners. A second round last spring included new investor Intel Corp. and brought in another $20 million.
Harrington came to a company flush with cash but lacking a clear game plan. One of his first acts was to dump the site’s old moniker, which he found functional but flat and generic. Harrington argued that name recognition on the Net is a make-or-break proposition. So he and his colleagues pored over hundreds of names tossed out by consultants, choosing one, ironically, that has nothing to do with sports. Even the dictionary definition-a bright or clear spot in a fog bank-lacks the allure the name generates on its own, though it’s consistent with the company’s philosophy. In short, Fogdog has cachet, says Harrington: “It’s a name we thought we could build soul around-and it had 100% recall in focus groups.”
Reborn as Fogdog.com last December, the site introduced a raft of new interactive features and a whole lot of products-15,000 to be exact, representing 500 brands and 60,000 SKUs.
“First movers have an advantage that is absolutely essential,” Harrington says. “Yahoo! was a first mover, and Amazon.com has built a brand name for itself. Name recognition like that gives you the advantage in moving a brand.”
Equally important is keeping the storefront spruced up and changing with customers’ needs. Makeovers occur regularly, and the under-50K site loads at a speedy rate. It now logs about 40,000 visits a day, up from 3,000 a year ago. Recent innovations include “Fogdog Fetch,” a retrieval service that finds equipment based on the shopper’s level of skill and experience, and “My Fogdog,” a profile builder that suggests products tailored to a shopper’s interests.
Selection and service
Fogdog aims for depth as well as breadth. The site features merchandise in more than 15 sports, and six prominently displayed specialty shops offer an even deeper selection of golf, tennis, fan memorabilia, soccer, baseball and outdoor gear. New shops are in the works, boosted by Fogdog’s recent acquisition of Sports Universe.
The deal brings more action equipment and Generation X shoppers to Fogdog, and both will help accelerate plans to add specialty shops in hockey, skateboarding, cycling and snowboarding and other adventure sports. Each shop takes months to build, set up with manufacturers and distribution partners, and staff with experts who can help shoppers find merchandise that fits their level and needs.