Foot Locker’s Cool Concepts

A lot has changed at Foot Locker over its 40 years, from one store in a California mall to a family of retail banners with locations across the globe. But Stephen “Jake” Jacobs, president and CEO of Foot Locker U.S., said the firm’s basic premise is little altered.

“I don’t think the gut of it has changed that much. We’re still selling sneakers to kids,”  he said.

But Jacobs noted that over the years, competition in the athletic space has grown drastically. “Nowadays, you can go anywhere to buy sneakers,” he said. “And you could probably go somewhere and find a basketball shoe for less than you can find it at Foot Locker or in any of our [competitors] in the mall.”

As a result, Foot Locker has risen to meet the challenge, and Jacobs said the company’s mission now goes well beyond product. “What we’re selling is intrigue, we’re selling fun, we’re selling excitement,” he said. “That’s always been the case with Foot Locker from the day it started to today; it’s just that we’ve done different things with the brand.”

And indeed, the firm has done a number of different things, from launching offshoot chains Lady Foot Locker and Kids Foot Locker in 1982 and 1987, respectively, to buying Footaction in 2004. All are now overseen by Jacobs as part of a joint division. (Parent company Foot Locker Inc. also acquired Champs Sports in 1987 but operates that chain as a separate unit.)

Jacobs himself has been a witness to much of the company’s evolution. He joined the organization in 1998 as a buyer for Champs and rose through the ranks, eventually overseeing that group’s footwear business and then running the shoe business for the Foot Locker banners. He next served as CEO of Champs for two and a half years before taking on his current role in 2011.

The executive pointed out that some of the most rapid change at the company has come within the last 10 years. “We’ve spent a lot more time, energy and resources understanding who our customer is and then creating an experience for that kid,” he said, adding that for each of the banners he oversees, the strategy remains the same. “That’s the simple formula: Know who your consumer is — your ultimate pinnacle consumer — and understand what your brand means to them, and then build an incredible experience for them.”

To craft a compelling shopping experience, Foot Locker has been busy in both the online and brick-and-mortar spaces. According to Jacobs, connectivity is key, in whatever realm the consumer wants. “I hate to even have that conversation about whether it’s a digital experience or an online experience. It’s just an experience,” he said.

Foot Locker was an early adopter in the omnichannel push, building up its distribution capabilities to link stores and the Web. The company now offers what it calls a “Super Stock Locator” that gives customers various options such as to buy online and ship to store, or buy on a mobile device and pick up in store.

“We have designed our systems to make our entire inventory available for purchase from anywhere within our network,” said Dowe Tillema, president and CEO of Footlocker.com and Eastbay.com.

Tillema noted that other important digital features included enhanced search functionality on the websites and a responsive design that can reconfigure to different types of mobile devices.

In its brick-and-mortar doors, Foot Locker has worked to generate excitement with new retail projects created with its major vendors. The first, House of Hoops, debuted in 2007 in partnership with Nike and is now in 157 doors worldwide. It has become a model for successful brand/retail collaborations and inspired Foot Locker to open the similarly themed Nike Fly Zone shops under its Kids banner. “It’s an [extension] of that [same idea] for kids with one of our biggest brands,” Jacobs said of the concept that launched in November 2013. “We’ve got five open, and we’ll start expanding those pretty rapidly.”

And last February, the retailer teamed with another brand to debut Puma Lab. The shop-in-shop, which opened in two Atlanta malls, is expected to roll out in some form to roughly 125 Foot Locker locations. It presents the full range of Puma product in a periodic table-like framework that highlights design, luxury, creativity and multiple sport categories.

At the time of the opening, Puma North America President Jay Piccola told Footwear News that the merchandise mix could include anything from “the Puma Suede to the Alexander McQueen collections,” as well as a number of exclusive items.

Additional retail concepts have launched in connection with the Footaction chain, including the much-buzzed-about Flight 23 (a partnership with the Jordan brand) and the Adidas Originals Collective.

Beyond engineering new concepts, Jacobs’ team has been working to hone its real estate roster.

In the first half of fiscal 2014, his division opened 24 new doors, closed 40 and relocated or remodeled 121, all across the banners he oversees, which also includes the newly launched Six:02 women’s format (see sidebar for more). “We’ve figured out some things that are working for us, so we’re going [ahead with it],” Jacobs said. “That’s why you see so much investment in the end experience, both in our brick-and-mortar and digital experiences. You’re seeing more investment from this company in the last couple of years than you’ve seen in the previous 10.”

One key initiative has been the rollout of Foot Locker’s new remodel — dubbed the “Willowbrook format” for its first location in the Wayne, N.J., mall — which emphasizes rich storytelling. “That’s what we do: We sell the stories that brands are creating,” Jacobs said.

He predicted the investment in stores will continue apace: “I don’t see any slowdown in it in the near future. We’ve got a lot of runway in front of us.”

Foot Locker’s continuously positive financial results seem to support that strategy, but the firm credits some of that success to strong product launches from top athletic brands, particularly in the basketball space, where Foot Locker controls a large share of the market. “Our vendor partners have done an incredible job of cultivating stories around marquee athletes or performance technologies,” Jacobs said. “You’ll see some very intriguing stuff coming out soon from the guys on the basketball side, whether it’s Jordan, Nike or Adidas — those are the big three, though Under Armour is starting to step up its game on the basketball side.”

In the running category, a larger mix of brands are at play, from Asics and New Balance to Brooks and Adidas. “There’s a lot of innovation coming down the pipe from a running perspective,” Jacobs said, citing Adidas’ Boost cushioning technology as a leading example.

He added, “This is probably one of the most exciting times in the 16 years I’ve been in the specialty business, from the sheer amount of cool, innovative product [coming out for fall and spring] across a very wide swath of our vendor base.”

Looking ahead, Jacobs said his team’s goal remains unchanged: to cater to that core shopper. “We have to — and we want to — make sure we’re incredibly connected to our pinnacle consumer,” he said. “As long as we do that, as long as we keep touching more people and bringing more people into our brand, the end results will be good.”

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