Ken Hicks, Foot Locker chairman and CEO, took the reins of the retailer in 2007 as the United States was facing down its worst recession in decades. Since then, the footwear and sports apparel company has managed to deliver 17 consecutive quarters of comparable store sales growth and its best-ever financial results for the 2013 fiscal year.
How did Hicks do it? By closing underperforming stores, refocusing on shoes and creating banners that appeal to finicky younger shoppers. Foot Locker operates 10 banners and has managed to create cross-channel synergies that are the envy of smaller, less complex retail organizations.
Foot Locker has been busy building different identities for its various banners and is bringing its online business, Eastbay Performance, into brick-and-mortar in a four-store test. Eastbay—and athletic wear in general—is dominated by younger shoppers.
FierceMobileRetail spoke with Hicks to find out how Foot Locker's divergent brands and channels work effectively together.
Read the first part of our interview, and find out what Hicks thinks of omnichannel retail, at FierceRetail. For his thoughts about what mobile retail means to Foot Locker, read on…
FierceRetail: How does mobile fit into this?
Ken Hicks: Mobile is becoming more and more important. We've designed our sites to work well on mobile. To some people the sites are really complicated and they take forever to download, and a kid just doesn't want to wait for it. Our sites will adapt to the size of the device. So if you are on a computer, the site will look different than on your cell phone, will look different than on an iPad, will look different than on a phablet.
It adapts to the size of the device and it's designed to work as rapidly as possible on the mobile to make sure that you continue to have a good experience.
FierceMobileRetail: How fast is this growing? Are you seeing people mostly browsing on mobile or are you seeing many sales actually completed?
Ken Hicks: We're seeing both. Mobile is still less than half of our online business, but it's growing very rapidly and in some of our [websites] it's approaching half. But mobile is ultimately where I think everything will end up.
We see people in our store. They see a shoe and they'll go online to see if there are any other colors or sizes. One of the things we are now doing is using bar codes. Somebody comes in and says, "I want this shoe that I saw online. Do you have it?" We can pull it up and a barcode will show, and we can scan the barcode and go into our inventory to tell us where we have it, whether it's in that store, a nearby store or online.
FierceRetail: And you are doing ship from store and ship to store?
Ken Hicks: We do. We call it "buy online, ship-from-store," or "buy online, reserve-in-store." We ship from wherever we have the product and we have universal inventory. Both the store and customer can see the inventory.
FierceRetail: This raises an interesting question. At retail conferences we hear about how all the channels have to blur, all the departments have to blur—that it doesn't matter where the sale comes from. How do you reward your store managers, your team managers, your district managers? How have you had to change your organizational structure to facilitate that?
Ken Hicks: We haven't changed the organizational structure. We still do the dot-com business where Eastbay is in Wausau, Wisconsin. We have marketing units located within each of the divisions. In the store, you know it's an interesting thing, if the store manager sells something online, they get credit for that sale. So that counts as their sale. They get commission on it, so they're encouraged to use it. If they can find the stock and sell it, they get credit for it.
FierceRetail: How fast are mobile sales growing? For Champs in particular, I see that it was 183 percent in just the last two months.
Ken Hicks: It's growing very rapidly, but you have to remember it's off a smaller base. It's a small base on a small base. The sales in our banner dot-coms overall are growing at 40 percent. Mobile is growing even faster than that.
FierceRetail: Have you been able to delve deeply into who that user is and how they might differ between the dot-com user and the mobile user? Who is visiting from a desktop vs. a mobile device?
Ken Hicks: We are gathering more information; we are looking at the total customer. Somebody may shop us sometimes online, sometimes in-store, but we understand what they bought and how they did it. A person may use their computer at work and school, but then they come into the store and they use a mobile device in the store—or they'll use a tablet when they are watching TV. It's difficult to say if there's one type of person that does one thing or the other. I will say, on the whole, the younger person—who is more our customer, which is why it's growing so rapidly—is more apt to use a mobile device than a computer, because many of them don't have access to a computer.
If you're a 19-year-old who's got a job somewhere, you might not have access to a computer at work. The younger person is more comfortable using online. It's one of the reasons why we are pushing malls, for example, to put in Wi-Fi. Mall developers are working to get Wi-Fi into the mall. We tested it in a store. [Kids won't look up a different Wi-Fi connection for each store they go into] but if they walk into the mall and the mall has Wi-Fi, they'll use it.
FierceMobilRetail: What about beacons and Bluetooth low energy (BLE)? We're seeing a lot of activity around stores adding these devices that provide connectivity via Bluetooth and it's almost a seamless experience for the user.
Ken Hicks: We are trying and testing just about everything that you can. Some are more meaningful than others. We've found that [kids] are more interested in having the bigger experience, like the mall having Wi-Fi. We've got it in individual stores but it's not used as much as we would probably like. If I'm a kid that's shopping the mall, I don't want to go through 37 different experiences. Even if we call it seamless and use Bluetooth, I still have to sign up initially in every place. I may go to 25 stores in two different malls. That's 50 connections that I'm worried about. That's a lot.
Creating community is important. We're on Facebook and Twitter; we have a YouTube channel. We use YouTube now for the majority of our impressions. We had one commercial last fall that had over 1 billion views. Some commercials don't even go on TV. We'll put it online, or we'll put it on TV for a couple of views, and then we'll run it on YouTube. We will get millions of views in a short period of time.
We created a sneaker lover site called Sneakerpedia and we participate in the different communities that are out there. I think when you talk about omnichannel, that's a part of getting that communication and that voice out to the customer. You have to be wherever the customer is. It's not just your site.
Within our site is something called Foot Locker Unlocked, where our VIP customers can go get special information about releases or about the designer. There may be a brief interview with a designer on a regular site, but at Foot Locker Unlocked there may be a longer interview with a designer or an athlete. Rewarding and recognizing our loyal customers is an important part of what we do, and we're able to do that online.
Read more from Ken Hicks at FierceRetail and FierceRetailIT.