Revolutionizing Footwear Retail: Foot Locker’s Strategic Approach to Consumer Engagement

As CEO, Johnson now is responsible for all of Foot Locker’s nearly 3,400 stores. The company operates locations in North America and 19 countries in Western Europe, Australia and New Zealand. It also franchises stores in the Middle East and South Korea. In addition to the Foot Locker name, the company’s brands include Champs Sports, Footaction, Lady Foot Locker, SIX:02, Kid’s Foot Locker, Runners Point, Sidestep, and Eastbay.

Europe is one of Foot Locker’s strategic growth pillars. The company purchased Runners Point Group in 2013, giving it control over 212 stores in Germany, Holland, Switzerland and Austria and expanding its footprint in Europe to over 850 stores. Johnson sees opportunities to expand the Foot Locker and Kid’s Foot Locker brands throughout Europe.

In addition to its physical retail locations, Foot Locker sells shoes through its brands’ websites. Foot Locker has always been forward-thinking when it comes to online. The Eastbay acquisition prepared the company’s infrastructure for e-commerce and the first Foot Locker websites appeared in the early 2000s.

The move to online shopping has forced some retailers to close brick-and-mortar stores, but Foot Locker believes each shopping avenue has value for its customers. “The channel is irrelevant,” Johnson says. “We want to have a great connectivity with our consumer wherever they choose to interact.”

Passion for the Game

How customers perceive a brand is instrumental in its success. Foot Locker has long been seen as the expert on athletic shoes. The referee jerseys worn by sales associates – in use since the brand launched in 1974 – are an integral part of the company’s athletic culture and give it a sense of authority when it comes to sneakers. Beginning in 2009, Foot Locker began conceptualizing its stores to create an even stronger environment for the consumer based around the shoe brands it sells.

Consumers embraced those changes because they see the company’s passion for sneakers and its willingness to cater to different customer groups, Johnson says. “Each of our banners stand for something different, [and] the consumers who shop there have different buying habits and different buying occasions,” he explains.

Foot Locker is perceived as the all-around sneaker store, while Champs has a more high school athlete bent. Meanwhile, SIX:02, one of the company’s newer concepts, is designed as a premium women’s retail destination where fashionable athletic wear is given equal presence to the shoes.

The company’s engagement with its customers begins outside the store with focus groups, social media contact and even home visits. Those personal interactions lend some of the best insights. Johnson says Foot Locker can better grasp what motivates its customers when it sees what posters they have on their bedroom walls and hear what music they listen to. “It’s that one-on-one relationship with them that allows you – a year later, 18 months later – to circle back to them and see if the same influencers are impacting their life, if the same artist is impacting their life, who are they following on their twitter account,” he explains.

The intersection of sport and culture has never been closer than it is today, so understanding consumers beyond their buying habits enables Foot Locker to create content that reaches customers in a way that is relevant to them. That impacts everything from how Foot Locker markets itself to how it designs its stores.

The company’s brick-and-mortar stores still feature plenty of shoes, but it also understands that people no longer want an overwhelming shopping experience. Customers buy into a lifestyle and Foot Locker’s stores are a critical component in helping its shoe brands tell their stories. Walls are no longer stacked floor to ceiling with sneakers on display. Instead, locations have in-store sections that appeal to those lifestyles, such as House of Hoops, a basketball-focused concept that pairs premium court sneakers with t-shirts and other athletic wear.

The key is to find appropriate apparel and accessories that set the tone and connect to the shoes. After all, most consumers don’t drop $200 on a new pair of Jordans and then buy a $5 tee shirt. “It’s all designed to be complementary to the business of selling sneakers,” Johnson says.

Telling Stories

Buying decisions also involve a lot more voices today. Consumers  don’t come in, try on a few pairs and make a decision. Sometimes, they’ll pick out two finalists, slip one shoe on the left foot and its competitor on the right, then Tweet out of photo and ask their followers to decide. Johnson says stores must be participants in those interactions, and sales associations are trained to engage with customers on that level. “We want to be part of the conversation with our consumers,” he says.

The company has been rolling out these storytelling concepts to its stores for several years, but its new flagship store in Manhattan is the culmination of those ideals. In August, Foot Locker celebrated the reopening of its location in New York’s Herald Square following a massive redesign that granted individual spaces to several brands, including Nike, adidas, Under Armour and Puma. “It is a combination of brand space which really allows the great stories our vendor partners have to tell to come alive under one roof,” Johnson says.

Foot Locker worked with shoemakers to create the in-store concepts and develop the cross-category product offerings. “The build-out and connectivity with the brands and their co-investment with us in the flagship spaces has really created an environment that fits our core consumer,” Johnson adds.

Bucking a Trend

By creating retail environments that connect to consumers, Foot Locker has fought off the declines experienced by other mall retailers. Real-estate research firm Green Street Advisors released a report last spring that determined department stores needed to close about 800 stores across the country to return to the same sales per square foot productivity they had in 2006. The potential loss of a fifth of the country’s mall anchor store space has concerned the industry – especially since major retailers like Sears and Macy’s have already dropped locations.

However, Johnson says traffic at Foot Locker stores is actually up and credits that success to the company’s ability to excite consumers. “We make people happy,” he says. “They leave our stores with a bag, they have a fresh pair of kicks that they get to wear at school and show it off.”