Academy Sports + Outdoors' Davis sees evolving role for e-commerce logistics
Tony Davis, senior vice president of distribution and logistics at Katy, Texas-based Academy Sports + Outdoors, sees the logistics business evolving to meet growing demands of e-commerce – a retail segment that scarcely existed when he was earning his degree in the ’80s.
Davis, who, not surprisingly, enjoys spending time outdoors, shares his thoughts on the dynamic nature of logistics in an exclusive interview with the American Journal of Transportation.
Academy Sports + Outdoors executive Tony Davis looks to
logistics to fulfill e-commerce demands.
Academy Sports + Outdoors serves 156 stores in 13 states in the southern U.S. from distribution centers in Texas and Georgia. How does that logistics operation work, and what role does the Port of Houston specifically play?
We have two distribution centers today – one, with a footprint of about 1.4 million square feet, here in Katy, Texas, which is a Houston suburb where our corporate headquarters is also located, and the other in Jeffersonville, Ga., a few miles southeast of Macon. We just completed a 200,000-square-foot expansion at our Katy facility, and we’re in the middle of an expansion at Jeffersonville, adding about a half a million square feet to that facility.
Those two DCs serve our entire chain, and, with very few exceptions, all product moves through one of our two distribution centers. The Texas DC serves stores throughout Texas, Louisiana, Arkansas, Oklahoma, Kansas and Missouri, and the Georgia facility covers the rest of the Southeast, including a part of Louisiana.
Whether it’s from a domestic vendor or a foreign source, the product will move through one of those two distribution centers and then on to our stores. The Port of Houston is one of three U.S. ports we use and, specifically, the Port of Houston and the port[s] of L.A./Long Beach service the Texas distribution center, and the Georgia distribution center is serviced via the Port of Savannah.
The Port of Houston is the secondary port for the Texas distribution center, with L.A./Long Beach being primary. We’ve got door-rate contracts with the ocean carriers, which arrange the movements to our door.
The Port of Houston is a great partner in the community. I recently had lunch with [Port of Houston Authority General Manager for Trade Development] John Moseley, and we’re on an executive council as one of the key shippers in the area. They like to stay engaged with the community, and we’re supporters of them as they try to attract more container capacity from Asia, and specifically China, to the Port of Houston. They’re working hard to build on that, and we hope to be a part of that, too. We also have some product that comes out of Central and South America to the Port of Houston.
We actually import from more than 30 countries, but China is our mainstay, as it is for most retailers in the U.S.
I believe Academy Sports + Outdoors is about a year and a half into its academy.com fulfillment operation. How has this operation evolved in meeting e-commerce challenges?
We’re in our second peak season as far as e-commerce fulfillment is concerned. It’s really an ever-evolving business. For us and other retailers, e-commerce has become an “omnichannel” business.
This means retailers are looking to support customers’ interest in researching, learning about products before they buy, as well as supporting their shopping preferences, whether it’s in-store, via the website, mobile phone or tablet. From the retailer’s perspective, it’s looking at how to meet customer demand, whether it’s from a fulfillment operation or store inventory.
So you end up with these channels of demand and supply really crossing each other on multiple fronts. I think that having a centralized e-comm fulfillment center and a customer being online at their desktop placing an order, that’s changed very quickly to customers being interested in learning about product and being savvy in how they are purchasing product in different platforms.
Retailers are trying to respond and say, “How do I give the customer what they want, when they want it, where they want it,” and respond by looking across the inventory network and capabilities and see how to fulfill that customer’s needs. It may be from a fulfillment center, it may be from a store inventory or brick-and-mortar distribution facility, or some combination thereof.
When you joined Academy in mid-2009, you brought with you to Academy, initially as the firm’s vice president of logistics, about 15 years of experience as a logistics and transportation executive at Dollar General Stores and at two firms – Service Merchandise and Circuit City Stores Inc. – that now have their brands continuing solely in the e-commerce realm. How important is e-commerce in relation to the future of U.S. retailers, and how do you see this being facilitated through logistics?
This is an interesting time of year to talk about that, just coming off Black Friday and Cyber Monday. For most retailers, e-commerce is the fastest-growing segment of business from a top-line sales standpoint, so it garners a lot of attention across the industry. It’s going to continue to grow at a high rate.
When you look at logistics’ role in that business, I think it may be even more significant than in the traditional brick-and-mortar retail channel. You have to think about, from an e-comm or omnichannel standpoint, trying to balance cost and service to customers. As far as serving a group of stores, you’ve got service levels that are mostly set; the expectations are pretty standard and have been around for some time.
In the e-comm or omnichannel world, customer service demands and expectations are changing pretty quickly, and the bar’s getting raised consistently. So, I think logistics, by virtue of that fact, plays a very significant piece in helping find the right balance of cost and service that meets customers’ expectations, and those expectations are being redefined regularly in the marketplace.
How did you wind up getting into the logistics field back in the mid-’80s, and do you ever regret having done so?
I was at the University of Tennessee in Knoxville, , and what really got me into it was I’d learned there were work study programs – or co-op programs – that the school participated in. I became interested in an opportunity to take every other quarter off from school and work and make some money, and I learned that, in the School of Business Administration, the transportation/logistics [now supply chain management/logistics] program had more of those opportunities.
I worked for General Electric Co. at its industrial lighting systems facility in Hendersonville, N.C., and that got me some really good experience and a nice break from school, but it also gave me perspective about what to expect when I got out in the real world. That long mahogany desk, I realized, wasn’t something I was going to get right out of school and may be a fantasy in total.
I’ve not looked back. I absolutely have not regretted my career decision. I tell people a lot that two things I really love about this field are that the work you do is very measurable – that you can put numbers around it and set targets and you know if you’re winning or losing or breaking even – and that it demands that you get results through others.
You’ve developed a reputation for serving as a mentor for those early in their logistics careers. Does it bring you personal and/or professional satisfaction to see the successes of those you’ve brought under your wing?
I think developing other people is not only a great reward but is our No. 1 responsibility in business. It’s really rewarding to look around the industry and see people with whom I’ve been associated in the past and see them in leadership roles, whether it’s in retail or other industry, and hope that, in some way, us working together, I had some influence on them.
Considering the company for which you work, I’d figure you probably hunt, fish and camp and are involved with several participatory and spectator sports. What might we find Tony Davis doing when he’s not working?
It is great to be able to work for a company that is all about an active outdoor lifestyle when that’s a big part of your interests. I do spend a lot of time outside, but today it’s more around playing some golf and tennis, running a little bit...
My children are both adults, so I get to spend a lot of time with my best friend, who’s also my wife, Karen, including outdoors in some of those pursuits together.
We’ve really enjoyed being part of the Houston community, especially the professional sports teams, right now, specifically, the [NFL] Texans. They’re getting it done right now. Academy has got a sponsor relationship with the Texans – among many other professional and collegiate team partnerships, including my alma mater – and the Texans are my newer adopted team.