BARBARA MARTIN COPPOLA: CHIEF EXECUTIVE oFFICER, DECATHLON

The World Federation of Sporting Goods Industry (WFSGI) and McKinsey & Company have teamed up once again to present our third annual Sporting Goods Industry Report “Sporting Goods 2023 – The need for resilience in a world in disarray.”

Here we present the first interview made with Barbara Martin Coppola, CEO of Decathlon.

Barbara Martin Coppola

Chief Executive Officer, Decathlon

Barbara, thank you for taking the time. When you look at the sporting goods industry, where do you see the biggest challenge, the most important call to action in the years ahead?

“The most important aspect is to enable everyone to have an active and healthy lifestyle. More and more people realize the benefits of sports, and the pandemic accelerated this trend. However, there are still many populations – for example, lower-income segments and kids from non-privileged backgrounds – who are not taking part. The obesity rate has risen sharply, especially among teenagers and young adults. We therefore need to collectively do more to be inclusive and ensure that sport becomes a possibility and reality for everyone, whatever their level.”

What will be the most significant changes the industry needs to make to work?

“An important change is the evolution of the fundamental business model which has ruled the industry for many years. We need to move away from a model purely based on first-time ownership of goods to a usage-based model. With this business model we would lower
barriers to trying sports, allow people to use seasonal products and then share them back with the community. Hopefully, this will open the possibility to more people to adopt an active lifestyle and try a wide variety of sports. I hope we will see going forward that people are not just defined by one or two sports but by many sports. People will have more flexible options to fit sport into their daily lives.”

What else does the industry need to do to open the world of sports for everyone?

“We must question how we all have positioned sports in our marketing and communications. Quite often, there is a focus on performance, strength, and competitiveness. This can be intimidating to many people. Instead, the positioning of sports should be as whatever you believe sport should be for you. Emphasizing health and well-being, and the connection to others. Sport is not a luxury and not a privilege of the fit, trained, and shaped. It is a way of life that needs to be accessible to everyone. Sport needs to be fully democratized. Walking around the lake is as sporty as climbing Mount Everest.”

You talked about the necessity to keep up with the evolving needs of society and the emergence of a new business model. To what degree does this new business model need to be more sustainable?

“It is essential that we rapidly move towards decarbonization and circularity. The sporting goods industry is already adapting significantly to decarbonize its value chain, yet there is potential for further acceleration. Sustainable products should not come at a premium, they should be accessible to everyone.

Furthermore, circularity needs to end its niche existence and become mainstream – recycling, refurbishing, repairing, re-selling, and renting are the future. I think we are at a tipping point of seeing solid progress on circular business models. This starts with the product’s design – it needs to be focused on longevity, durability, the use of low-carbon materials, and, ultimately, recyclability. But this is not enough, the whole end-to-end lifecycle needs to be rethought. This includes modes of production, transportation, and nearshoring. Finally, it will also be critical to get the commercial aspect of this new business model right so that it increases, and not decreases, accessibility and is attractive for both consumers and brands.”

How do you at Decathlon think about this sustainability transformation?

“First, I strongly believe that sustainability cannot be a luxury. It needs to be affordable. This is imperative for Decathlon. Also, I firmly believe that there will be significant economic value in this transformation. Hence, the faster we evolve, the better it will be for the planet and the business.

At Decathlon, we have already made substantial progress in integrating circularity into our routines. For example, we have more than 1,800 14 Sporting Goods Report 2023 workshops in stores which repair products like bikes. And in many stores, we are currently running tests to rent equipment instead of buying it. Of course, this is only the beginning, and I see it as our responsibility as a major global player to lead the way.”

What will be required from the consumer to make this vision of a sustainable future reality?

“We have been trained for a long time to act in a certain way. When you want to take up a sport as a consumer, you go and buy the necessary equipment. So, moving from a product-based to usage-based model means that we would be changing the industry and consumers’ habits. There is a push and pull that needs to happen. Propositions from the industry to consumers need to evolve to rethink what and how we sell, but then consumers need to be open to this new model as well.”

To get to this future you are describing and envisioning, do we need to change our common definition of corporate success?

“The sporting goods industry will only exist and thrive if our playing field, the planet, is respected and protected. Hence, as the new CEO at Decathlon, I made sure that, as a critical part of our strategy, we put sustainability on the same level as revenue and profitability.

Historically, financial aspects were always the most important measures of success – sometimes the only ones that mattered. Now we are leveling up the sustainability aspects to the same height. I firmly believe that decarbonization and circularity need to be measured as rigorously as cash flow or EBIT, and must be equally important when defining whether we are successful.

I hope we will see this across the industry and arrive at a joint aspiration on measuring sustainability and what to aim for. There is also a role to play for regulators to hold us accountable, playing by the same rules and ensuring transparency towards clients. Regulators can ensure everyone is sufficiently aspirational, in line with scientific targets regarding climate change.”

Concretely, by putting sustainability goals on the same level as financial success, how do you envision this will change how managers across Decathlon will make decisions for the company in the future?

“I would like everyone making decisions for Decathlon to go ahead only if both financial and sustainability goals are met. It might take longer or be a more difficult path, but it’s a path that creates more value, for shareholders, society and the planet. Maybe we need to find new partners, create new alliances, rethink processes, or question long-held beliefs. I realize this is raising the bar quite a bit, but if we get it right, we will lead the way as a good corporate citizen, and we can all feel a sense of pride in doing so. And by making these decisions transparent and measurable, we will know whether we are moving in the right direction and whether we are doing it fast enough.”

While the industry and Decathlon are adapting to realize a more sustainable future, there are also several acute short-term challenges. How do you prepare for the uncertain times we find ourselves in?

“It is a very uncertain environment with inflation, almost unprecedented energy prices, and geopolitical tension creating very choppy water to navigate. Therefore, building business cases and operating models around flexibility and agility is essential. Wherever there is rigidity, for example, regarding long lead times or dependencies on single factories, there is a risk. At Decathlon, we are making our entire supply chain more flexible and adaptive, leveraging the possibilities that digitalization affords us in areas like end-to-end forecasting, building in more slack where necessary, and developing new muscles. Finally, I am convinced that in uncertain times, there is an opportunity to create competitive advantage and get to a higher level.”

What role – if any – does near-shoring play in your vision of a derisked supply chain for a global player like Decathlon?

“What we are aiming for is right-shoring. There is definitely much effort, together with partners, to optimize assembly and production in a geographical area when we serve that same geographical area: China for China, India for India, and Europe for Europe. By doing so, we aim to create regional and local ecosystems. For us, it is about the diversification of production areas and avoidance of dependencies and monopolies. We are rethinking our entire value chain, from the material to the transportation and movement of final goods, not only to de-risk our supply chain but to optimize for sustainability – and we are doingthis not alone but with our network of long-standing partners and innovative companies.”

About World Federation of the Sporting Goods Industry (WFSGI)

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