Finish Line Report: What’s on the Digital Horizon

The omnichannel revolution is under way at Finish Line Inc.

“Our goal is to have a footwear store where technology blows your mind,” said Chris Ladd, EVP and chief digital officer. “We call it future-proofing.”

In other words, Finish Line intends to be anywhere and everywhere the customer feels like shopping, and it will utilize all means of mass technology to ensure that happens.

After all, shopping is no longer just about buying product, said Sam Sato, president and chief merchandising officer of Finish Line. It’s more about the experience across many channels of retail.

“People talk about brick-and-mortar and digital commerce, and they’re still looking at these things as either-or. We don’t look at it that way,” he said. “Whether they buy from us in a store or online, quite frankly, we don’t really care.”

Sato noted that customers tend to multitask when they shop: They text their friends, take pictures of the sneakers and post them on social media such as Twitter, Facebook or Instagram, and await feedback from their peers. He said those customers who interact with the retailer across multiple points generally visit the stores more frequently and spend more money when they shop.

“We’re trying to give consumers reasons to visit us, whether in the stores or through any of their digital devices. Engaging them is about gaining mindshare, and mindshare ultimately translates to more transactions,” said Sato. “We want to sell more sneakers.”

That mindset has propelled the retailer to roll out its omnichannel master plan to the tune of $90 million for fiscal 2012. Of that, between $13 million and $15 million is allocated to turning existing stores into digital playgrounds, incorporating hand-held computers for mobile checkout (shown below left), tablets for inventory checks and interactive table displays where shoppers can find product information or play touchscreen games.

“The enablement we’re giving our employees will be revolutionary,” said Steve Schneider, president and COO of Finish Line, explaining that the mobile devices will not only scan prices and check inventory but also be able to swipe debit and credit cards. “It’s a cash register with the Internet in their hands.”

Kate McShane, analyst at Citi Investment Research, views the investments as “a big positive.”

“With mall traffic being as anemic as it is and more people shopping online, it’s a statistical reality that you need to incentivize people to come into the store. Technology, while not an inexpensive endeavor, is Finish Line’s answer to how to do it,” she said.

Things have already been moving swiftly on the digital front for the firm. E-commerce sales increased 50 percent to $144 million in fiscal 2011, and are expected to advance between 25 percent and 35 percent this fiscal year. All told, e-commerce is projected to hit $450 million by 2016, making up 22.5 percent of the group’s targeted $2 billion revenue that same year.

While e-commerce has evolved over the years, online sales still represent a huge opportunity for the firm, said Sato. Though inventory is unified across clicks and bricks, the Internet comes in handy when there are more styles to offer than there is floor space.

Of course, digital commerce can never replicate the tactile sensation of an in-store experience, just as shopping at the mall lacks the ease of buying product with a click of the finger.

Sato admitted, “You can’t feel product online and you can’t emulate the one-on-one discussion you’ll have with the sales associate and how they make you feel about your visit.”

To that end, the firm has no illusions that its plan will go off without a hitch.

“It’s easy to say and hard to do. Operationally, there are a lot of levers we have to pull,” said Sato, adding that financial headwinds, including the economy, gas prices or even a shift in footwear trends may test the firm’s strategy.

But Finish Line is pressing ahead anyway, rolling out its technology in an aggressive fashion to all its 640 stores by the end of the year.

Said Sato, “It’s not the stores to the Web or the Web to the stores, it’s [that] no matter where you are, you’re surrounded by us.”

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