Finish Line Report: The New Store Concept

Finish Line’s new Lab store is an experiment in connectivity.

Company executives said the hi-tech concept, which will begin rolling out in August, blends e-commerce with in-store elements, providing a comprehensive omnichannel experience that integrates the best of both worlds. Thirty locations will initially receive the makeover as part of a pilot program. Then, in November, almost all stores will get tech upgrades.

The centerpiece of the prototype is an interactive touchscreen table. Shoes fitted with a special chip can be placed on the table, and once the item is detected, a 42-inch screen displays information about the shoe, price, alternate colors and whether the style is in stock. It also reveals sketches and videos from the product designers, ratings, reviews and other content. What’s more, users can even Tweet about the shoe and post it on Facebook.

“We know people are seeking this real-time feedback, either post-purchase or prior to purchase, just to get their peers and other people who’ve purchased it included in the discussion,” said Chris Ladd, EVP and chief digital officer for Finish Line. “This is about building a robust, compelling experience that marries physical and digital together to deliver something that we believe our customer wants and our competitors can’t provide.”

Ladd said even though consumers have been completing similar activities on their cell phones for some time, network speeds can be a hindrance. But the store, he noted, promises to offer a much richer experience.

“You want to have the customer walk away and go, ‘Wow, that was really cool,’” added Terry Ledbetter, SVP and chief information officer for the retailer. “You should be able to come into the store, set your phone down and bring that e-commerce content into the store.”

In the future, Ledbetter said, Finish Line locations may offer consumers free Wi-Fi that encourages them to view the store as a gathering place.

As for product, Finish Line doors will feature shop-in-shops from brands such as Jordan, Nike, Under Armour and Adidas. Shoe walls also have been reorganized to highlight bestselling styles and hot trends, to help consumers identify items that may interest them. Display cases in the center of the store also feature modular fixturing so the retailer can continually change the look of the space based on trends or the season.

Meanwhile, sales associates will be outfitted with handheld POS devices capable of scanning barcodes, checking inventory both in-store and online, and facilitating the transaction. And tablet computers at the newly designed cash wrap function as both a cash register and, when removed, as an additional POS.

Sterne Agee analyst Sam Poser was given a preview of the retail prototype and liked what he saw. “The store looked great,” he said. “The technology is cool. The layout of the store is very nice. It’s great if it works and if it drives extra business.”

However, Poser struck a note of caution about the tech rollouts, noting that a fast introduction could prove troublesome. “Very rarely do things ever go as smoothly with a new [store] concept as you would expect,” he said. “I like what they’re doing, I just wish they’d do it more slowly.”

For his part, Northland Securities analyst Reed Anderson said Finish Line has engaged the digital space in a way few other traditional retailers have.

“Their strategy makes a whole lot of sense,” he said. “They certainly are getting a lot of traction on the digital side of the business. If you look at their competitors, they’re ahead of anyone else coming out of a brick-and-mortar background.”

The goal of the store, said Ladd, is to erase the distinction between traditional retail and e-commerce — a move that would appeal to the store’s 18- to 29-year-old demographic, which has seamlessly shopped between the two.

“The Millennial demographic is the lion’s share of our customer, and we know they’re on the leading edge of mobile utilization adoption,” said Ladd. “These kids grew up with technology; it’s not something they had to adopt. They’re digital natives.”

Still, even as the company integrates online elements and builds its Web business, the in-store experience is essential since 85 percent of sales still come through mall-based stores. And while Ladd said e-commerce could eventually account for 25 percent to 33 percent of sales, President and COO Steve Schneider said that tally doesn’t reduce the importance of the traditional channel.

“The physical store will always be important,” he said. “I still believe the vast majority of customers who come in want to try things out, and they’re happy to leave with a pair of shoes. Does that mean they couldn’t be happy with a pair of shoes shipped to them? No. But the happiest customer is the one who walks away with a product.”