How Foot Locker is Winning the Multichannel Race: An interview with CEO Ken C. Hicks

Foot Locker, Inc. has leveraged its advanced supply chain capabilities to transparently expose its enterprise wide inventory to all selling channels in order to provide a superior shopping experience for its customers. Recently Wayne Usie, JDA’s sr. vice president of retail strategy, sat down with Foot Locker Chairman and CEO, Ken C. Hicks, to get his thoughts on winning the multichannel race for our CEO Insights series. Here is a summary of his comments.

Usie: You have said that keeping customers coming back is your biggest strategic priority and that connecting stores and the internet is one of the strategies for accomplishing this. How are you connecting stores and the internet and why is that important for keeping customers coming back?

Hicks: The customer shops in a number of different ways—online, through their mobile devices, in stores, in print—and we have to adapt to the ways the customer shops. They require us to be more flexible than telling them how to shop. So we’ve done a number of different things to personalize their shopping experience. We’ve connected our store sites and our internet sites so that the same events and activities that you see online you will see in our stores. For example, we recently had our big Jordan release. That was the feature online, and that was the feature in our stores. If we have a price break on something, you would also see the price break normally in both places.

We have also integrated our marketing and communications. We may use our internet site to communicate to customers to go to our stores. We will provide information on particular shoes that are being released so the customer can look them up and go to a store, because we know there are people who go in the store to look and then buy online and others who will go online to get information and then buy in-store.

We are synchronizing our supply chain so you can buy online and pick-up in-store, or shop online and reserve in-store so you can pick it up. If we don’t have your size in a store, you can go online to order it to be shipped to the store or your house or to another store. Our inventory is somewhat ubiquitous, so wherever the customer wants to get the goods, either in a store or in their home, is OK. We can also offer a broader selection of styles and sizes online. We have adjusted our marketing, our merchandising and our supply chains to integrate all of the different channels. We have made all of our inventory visible to our customers and stores.

Usie: You have also said that the “Foot Locker supply chain is changing in the face of multichannel shopping. We’re making it more responsive, faster. We are looking at new ideas and new ways to distribute goods, not just to get them to the store, but also to the customer.” What advantages do you feel this will provide Foot Locker and your customers?

Hicks: The customer can get a much broader assortment of sizes and colors. For example, in our distribution centers some of our shoes will go all the way up to size 21. We don’t carry size 21 in a store. The customer who has that foot size can still go into our store or online and order it and we will ship to wherever they would like to receive it. Many people who live in the city or in an apartment don’t necessarily want a package delivered to their apartment. If they aren’t there, the UPS guy will either leave it outside the door or the customer will have to go to a UPS site to pick it up. But they know they are going to the mall at some point so they can pick it up there. So buy online and ship to store or ship to home. Or shop online and reserve in a store—I know I am going to the mall tomorrow so I can look online and reserve in-store so I can go and pick it up.

One of the things this lets us do is offer buy online and reserve in store and pay cash, because a lot of customers, especially young customers, don’t have credit cards. This allows us to sell out to the last pair. If you go online and find a size or a color that you want, you can order it and you don’t really care where it is shipped from as long as it’s being shipped to you. This allows us to sell down further than we might have if we had to consolidate pairs because we only had one pair left in a store. We may have hundreds of pairs left, but we only have one pair per store, which is difficult to sell. But when you put it all together online, it’s a pretty good assortment.

The whole concept is we want to make it easy for you—how do you want to buy it, where do you want to buy it.

Usie: Thanks for those insights, Ken. In Part II of this series launching on Thursday, June 19, Ken will discuss how Foot Locker is leveraging its supply chain for greater product availability.

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