Photo: Foot Locker
Foot Locker Has a Ways to Go in Upping its Omnichannel Game
Foot Locker is betting it can develop a best-in-class omnichannel experience to grow its business and capture market share from its rivals.
Peter Scaturro, senior vice president of strategic planning & growth, speaking at the retailer’s Investor Day conference this week, said Foot Locker has tremendous upside potential after lagging behind the competition.
“We know that we’re trailing the broader market when it comes to digital penetration. We finished 2022 in the high teens, right around 17 percent, while much of our competitive set are in the twenties and the broader marketplace is actually double that.”
Mr. Scatturo said that 80 percent of Foot Locker’s sales happen within 10 miles of one of the company’s stores. Customers within that radius, he said, spend 1.7 times more on average than the average across the country. Digital sales per person were 20 percent higher still for customers within a 10-mile radius of Foot Locker’s new concept stores.
Over 95 percent of Foot Locker’s customers incorporate digital into their shopping journeys, said Mr. Scatturo. Examples include engaging with the brand’s social posts, articles, images and YouTube videos. It also includes using Foot Locker’s launch reservation app for store pickup.
Stores are at the heart of Foot Locker’s omnichannel strategy, with almost half of digital sales fulfilled locally.
So how does Foot Locker plan to up its game?
The retailer plans to develop “a more dynamic and personalized experience” to help it extend the time that shoppers browse the site. Foot Locker trails its peers in the time visitors spend on its websites.
Foot Locker sees storytelling as key to better digital experiences.
“We’re gonna leverage the great content that our industry craves to tell better stories, provide more detailed and engaging product visuals, more in-depth rating and reviews, to help our customer find the perfect pair,” said Mr. Scatturo.
One key upgrade is that Foot Locker will have its inventory synced across stores, DCs and its digital channel by 2024 to give customers a more accurate view of inventory. The retailer’s stripers, Foot Locker for associates, will receive new handhelds connected to an upgraded network to access inventory data and product information.
Foot Locker also plans to relaunch its app, with over 80 percent of its traffic coming from mobile devices.
“It’s on us to make sure the experience is immersive, drives loyalty and ultimately connects our customer to the category of products that they love,” said Mr. Scaturro.
Discussion Questions
DISCUSSION QUESTIONS: How much of a challenge will it be for Foot Locker to go from a laggard to a best-in-class omnichannel operator in its peer class? Have other retailers accomplished a similar feat that Foot Locker could learn from?
Poll
Loading …BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Ananda Chakravarty
Vice President, Research at IDC
Virtually every retailer’s online presence is a “work-in-progress.” Foot Locker’s online shortcomings are solvable and the challenges can be overcome. Ultimately, this comes down to a commitment by Foot Locker’s leadership to focus on it and make it a priority.
It is too late for Foot Locker already?
“One key upgrade is that Foot Locker will have its inventory synced across stores, DCs and its digital channel by 2024 to give customers a more accurate view of inventory.”
By 2024? Let me guess, another ERP transformation? Who wants to place bets on this 2024 date? Not me. I will take the over on this date.
While I applaud what Foot Locker is doing to bring up their omnichannel presence, I think they really need to think about the in-store experience. Many years ago, the Foot Locker stores in my area had basketball courts where you could buy your shoes and then take them on a test run. There is nothing like that anymore and thus no differentiation as a must-visit destination retailer. I will be interested to see their success as they make the changes to become relevant again.
Cutting through the noise and cementing an omnichannel roadmap is possible as long as there is buy-in at all levels. Agile tools will fill in large gaps, but if Foot Locker associates are not equipped to manage the resources the customer will take a hit in the overall experience. The vision is there, connecting the dots from strategy to execution and results will be an uphill battle without everyone championing the path forward.
Only a matter of effort. Footlocker has the team, resources and willpower needed to pull this off, and it clearly now has the strategic direction. This is an issue of understanding their customer better and the company is taking the right steps for engagement and immersiveness. Synchronized inventory, cross mobile devices for associates, updated apps will fit right in with their customer base. The digital penetration competitive set is within ~10%. This is an achievable goal.
Now that Footlocker has set new strategic initiatives to improve the omnichannel experience for customers, there should be bold but coordinated action to aggressively close up the gaps. Having insight into inventory is a critical piece of information, especially for sneaker buyers who want to have the latest release. Not having a critical new shoe in inventory will likely mean a loss of a sale and potentially a customer.
We’ve seen this issue about smart devices for associates come up as early as 2011, (12 years ago!) but I would bet that the need existed before then. The example from that post below was from Home Depot who deployed 30k devices to associates.
https://retailwire.com/discussion/retail-touchpoints-store-associates-want-mobile-devices-for-inventory-price/
Meeting or beating that 2024 inventory synching timeline would be a key way to upgrade the experience and prevent sales leakage to other sites/chains due to the lack of inventory information.
A single view of inventory data across all your systems and locations that can be presented to all your digital touch points is key. Any gaps in that integrated view of data will show up as holes in an otherwise “seamless” customer experience — or a “disruption” to the stories they want to tell. It’s not easy, but it’s essential if you want to keep and grow your customer base. Aldo has been working really hard in this space.
In my opinion, the critical thing for Foot Locker is to take small steps, set priorities and have a clearly laid out vision to improve their digital experience by simply implementing the existing known strategies. Foot Locker has a strong network and a strong customer base, so focusing on store fulfillment strategies like ship from store and same-day buy online pick-up in-store will put them in a better position than their peers.
Additionally, ensuring inventory synchronization between in-store and online channels will allow them to offer a consistent shopping experience to customers.