Every single day they release a new product and that is exceptional for a footwear company. But their followers on Instagram want to see even more: up to ten new product releases a day. 'It gives an idea of the expectations of consumers. We are fortunate to work in an industry with customers that are really passionate and force you to keep both product and content very fresh'.
They do the kind of marketing you would expect in the entertainment industry. "It is very similar to a movie release where you need the big bang and then you need sustained growth." The usual product launch is building a story and anticipation with pre-release material, comparable to the launch of a film or game. "We may be looking at a future where a lot of retail marketing looks more like entertainment marketing," says Jed Berger, Global Chief Marketing Officer of Foot Locker, Inc.
Foot Locker for the most part attracts a young audience. Top sellers include trendy sneakers, sportswear released in collaboration with sport idols and footwear designed by young promising designers. The company has around 3,000 retail stores in 28 countries. Its portfolio includes brands such as Foot Locker, Kids Foot Locker, Champs Sports, Eastbay, Atmos, WSS and Sidestep.
Young audience: in-store experiences
It may sound surprising when targeting a young audience, but for Foot Locker the brick-and-mortar stores are crucial. Customers like to touch, feel, smell and try on the real thing. The customer journey, however, starts on the smartphone. "Four out of every five of our store purchases start with somebody on the phone, so for us the app and mobile web are incredibly important," Berger explains at GDS Summits. Customers search on their smartphone via Google or in the digital shop. 90% of the digital traffic is through mobile. But after a search online, customers often visit the physical store. "There is very little browsing online, people tend to know what they want, whether it is from social or from peer-to-peer," Berger says.
Once the young customers are in the physical store, they often change what they intended to buy. "The store piece is really interesting. When they come in they may know what they want. But then they are surrounded by so many choices. They have looked online, they have visited our Instagram, and they think they know what they want, because we have done such a great job driving demand for an idea. Then they come into a store and they are surrounded by terrific products, all with different stories. And they may end up buying something different or an additional item. The browsing and the shopping tend to happen more in-store than it does online."
Athletes as part of the product design
Athletes and others are increasingly involved in product design and development. Marketing and product development are integrated from the beginning. "A long time ago the product was inspired by an idea, the shoe got made and then it was handed off to a bunch of marketers. What we try to do now is work with influencers, athletes and creators and make them or their ideas part of the product design and creation," Berger recounts in the Buster Show podcast. "It is a more authentic way to bring a story and a product to life. I look for people who want to be part of the entire process and we can tell their amazing stories."
Athletes are interested to participate as their broader story becomes connected to the product. "A ball player doesn't want to be seen as just a ball player. He or she wants to be seen as an advocate or a fashion icon. That has really allowed for much greater and much more real storytelling. So, we look for people with those stories to tell and with those passions that we can bring into the creative process. Many players have business interests and are setting themselves up for a post career. It creates better role models for younger generations. I am really happy about that piece and being able to tell those stories."
Marketing spread over the organization
Marketing is a separate department in many companies, but Foot Locker has chosen a different approach. "Our organization has evolved and marketing is spread out through many departments. That is something I am proud of," Berger says in a video interview to MediaPost. "We have a marketing mindset in different parts of the organization." The result is that in the early stages marketing is part of the production plan. Over the years data have become more important. "A lot of companies love to talk about moving from a data swamp to a data lake and that is inclusive of us. We went from having individual loyalty programs across different properties into one loyalty program with one view of the customer. That is hard to do. Getting the data into the right place to make it available and then accessible was our biggest challenge. We have a robust data team and a consumer development strategy team working together. They need to be able to utilize the data to really perform their jobs."
The teams try to avoid some popular marketing terms. "I eliminated the term digital and the term brand," Berger says. "It is too much old school. You need to incorporate both online and offline and think in the overall context of the customer journey. It is not like there are digital customers and others that are store customers. That difference doesn't really exist." In a similar way brand marketing is not a separate area. "People get themselves in trouble when they segregate the idea of performance marketing from brand marketing. It means they are not working together. You want everybody thinking digitally and about stores, and you want everybody thinking about the brand and the business."
Nike, Adidas, Reebok
The product is more than just footwear. "What we sell is meant to represent social currency. What you buy and wear should help you express yourself, and you should know that you are good to go." Choice is important. "It is not like apparel where there are hundreds of different brands. Footwear tend to be the same brands for a long time. You know Nike, Adidas, Reebok, Puma. Everybody knows the brand partners. There is only a finite amount of sneaker brands to work with and develop new products. That in itself is a little challenging. We have a product development engine that works with our brand partners to build the idea into the design. An idea could be from pop culture, entertainment or collaboration with a designer. Youth culture is becoming wider, so there is really no end to where you can collaborate in the sneaker industry."
Atmos helps creators grow
Foot Locker is developing long-term partnerships with smaller brands and creators. It therefore launched Greenhouse, an in-house incubator for collaborations with youth culture tastemakers. "It brought new creators along at their own pace. It didn't work for everyone, but some have developed from small into something like $20 million companies." In 2021 Foot Locker acquired Atmos, a Japanese sneaker retailer. Atmos started in Tokyo's teenage fashion district Harajuku as a small store selling vintage sneakers and is now known for its global streetwear. Some of the Greenhouse projects were moved to Atmos to help them grow and find an international audience. "We help creators overcome barriers and eventually they will move on into our ecosystem."