Foot Locker is accelerating its transformation into an omnichannel retailer in 2024 after making gains in 2023.
The specialty athletic retailer aims to “make the customer journey more dynamic, personalized and seamless,” Foot Locker said in a presentation released Wednesday (March 6) in conjunction with its quarterly earnings call.
As part of its omnichannel efforts, the company boosted its percentage of sales made through digital channels to 19.5% in the fourth quarter, up from 17.7% a year earlier, according to the presentation. It aims to increase that share to 25% by 2026.
In digital, the firm’s fourth-quarter improvements included double-digit gains in customer acquisition; higher net promoter scores (NPS) across stores, digital and fulfillment; rising engagement; and higher conversion levels, Mary Dillon, president and CEO of Foot Locker, said Wednesday during an earnings call.
“Our digital conversion continues to push towards new highs, and we continue to see room for improvement looking out,” Dillon said. “In 2024, our focus is on additional improvements in the customer experience, including enhanced search and discovery capabilities, product listing and detail pages, improved storytelling and continued cart optimization improvements.”
The firm also plans to roll out a new mobile app later this year, providing a smoother shopping experience and greater connectivity with stores, Dillon said.
Among its physical stores, Foot Locker is increasing its locations that are off-mall or new concepts, the presentation said. The percentage of square feet in the United States that is in off-mall locations rose to 39% in the fourth quarter, up from 34% in 2022. The share that is part of new concepts rose to 16%, up from 11%. By 2026, the company aims to boost the off-mall percentage to 50% and the new concepts share to 20%.
During the quarter ended Feb. 3, the company opened 29 new stores, remodeled or relocated 66 existing ones, and closed 113 locations, according to an earnings release issued Wednesday.
The refreshed locations feature enhanced merchandising, branding and fixturing, and have delivered increased productivity and margins, Dillon said during the call.
Foot Locker will launch its first “store of the future” in New Jersey in April, and plans to open three more later this year, Dillon said.
“These immersive retail experiences bring to life a unique, differentiated store environment with powerful brand storytelling and [are] informed by our customer insights,” Dillon said. “Elements from these stores will be applied to our 2025 openings and beyond.”
These changes came during a quarter in which Foot Locker’s total sales increased 2% while its comparable sales decreased 0.7%, according to the earnings release.
Looking ahead, the company expects its full-year 2024 sales to see something between a 1% drop and a 1% gain and its comparable sales to rise between 1% and 3%.
“Our strategies are continuing to point us in the right direction,” Dillon said during the call. “As we continue our investment focus areas in 2024, we’re on the path towards driving sustainable and profitable long-term growth and shareholder value.”
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