I’ve seen the new District Manager for Finish Line in the store more than three times this week at the Memphis Wolfchase location. I think he’s a smart guy, but Finish Line has no idea of what it’s up against in Memphis and that lack of understanding is what has closed several locations here in the city and will continue to affect them. Attempting to get more money into Finish Line stores is a task that becomes more difficult by the day and it won’t get any better unless the store can become a more personalized experience. I love going there, but I’m not a regular customer. The regular customer is overwhelmed by the volume of options. It’s like this in every shoe store now that has a large wall of shoes. If a store is going to have large square footage it needs to be compartmentalized.
Foot Locker is one of my favorite destinations as well, and at this moment in February and March the place is jumping as families get their tax returns and visit the store to take advantage of the promotional environment, clearing out old inventory. This clearing of inventory is extremely important for every sneaker store in the country as inventories are climbing and visitors to the stores understand completely that they can wait for new items to go on sale. While Foot Locker and Finish Line are the names in the title, this is not an isolated issue. The entire footwear industry is suffering from one thing that has had a trickle down effect on the sneaker industry, and I’ve said this before: Nike’s Consumer Direct Offensive.
About four years ago I became acutely aware of something taking place with mom and pop stores. At that time I labeled it as a Direct to Consumer shift that would echo throughout footwear. For Nike this began in earnest around 2011:
In the article linked above I talk in depth about why and how Foot Locker’s connection to Nike was a benefit for them. This was over three years ago. The connection remains a benefit as Nike has discussed Foot Locker as one of the few footwear chains that it will remain connected to as they implement their plan to control 80% of their distribution through their own doors. The problem is as Nike drives direct sales, Foot Locker is directly affected. Where Nike goes, others follow. In both Under Armour and adidas’ recent annual reports they discussed considerable growth in DTC. As brands began to act more like Warby Parker and less like … “brands using traditional distribution”, retail is going to feel the pressure.
In Memphis the DM of Finish Line doesn’t understand that he is up against three Nike stores: a Factory Store, Clearance Store and Employee Store. This is extremely important to recognize. While the square footage of Nike stores is often considerable, they have implemented sales professionals who work quickly and there are always enough of them running around inside of the store willing to sprint to the back to track down pairs for individuals. More important Nike has taken on Apple’s in-store check out policy providing each employee with hand-held credit card processors. The hand-held devices can look up inventory giving the visitors to the store an opportunity to know if a particular style is in inventory quickly, and if they bring that product to the customer, they can check them out where they stand. Now Nike doesn’t often do the check out “everywhere” but they have almost 8 registers at the front of store. EIGHT! Compare this to the traditional 2-4 checkouts in retail locations like Finish Line and Foot Locker and you have an in store experience that caters to speed even when the lines are 30 deep.
That is what this discussion is about: Customer Experience. Foot Locker and Finish Line, include City Gear, DTLR, Jimmy Jazz and other smaller store chains, are utilizing an old model to compete with a more precise shopping experience being integrated by the brands in their own outlets. A retail store buying wholesale can’t compete with a better customer experience direct from the brand… or can they?
In the article above I began realizing that the brands needed to copy the small guys and they have. The footwear retail outlets need to follow a similar trajectory and break up their in-store experience. Foot Locker and Finish Line all need a serious merchandising update that goes beyond pretty lights, and flashy pictures. Finish Line has done this and Foot Locker has as well with their House of Hoops, to an extent. The problem is that they haven’t followed up with check out updates that expedite the shopping process. They have also failed to increase the integration of digital. Foot Locker’s stock tumbled on poor earnings. Finish Line is in a similar situation as it continues to close stores. Every retail outlet needs to adapt, but will they? I could go into greater detail on what has to happen, but that would take a video and a class and I’ve already written articles here on the site. I’m in the stores everyday. I know the fix isn’t easy, but if each footwear store took the time to walk into an Apple store the solution is as clear as a handheld digital device.