Foot Locker CEO Dick Johnson didn’t mince words about his company’s poor second-quarter fiscal performance but discussed at length the moving parts at play in an incredibly fast-moving world of customer loyalty.

“We do not intend to sacrifice our ability to deliver on our customers’ expectations of us,” Johnson said during the company’s recent second-quarter earnings call. “But we are undergoing a comprehensive process of evaluating priorities for next year and beyond, accelerating our commitment to digital, investing in the right source, and speeding up our logistics efforts.”

Foot Locker’s same-store sales sank 6 percent during the quarter and Johnson pointed to a confluence of issues that company officials must tackle.

“It goes without saying that our second quarter performance clearly fell short of our expectation,” Johnson explained. “We are obviously not satisfied with these results and we’re dedicating all our energy to ensure that we get our performance back on the right track. The disruption taking place today in our industry and, in retail in general, is the most significant I’ve seen in my quarter-century in the athletic business. The fact is that we’re seeing mobile technology drive shifts in consumer behavior and spending patterns at a faster pace than our industry has been able to keep up with.”

Johnson cited consumers having constant access to new influences, trends, information, and ideas while consumers’ attention spans are getting shorter.

“We’re seeing that they are moving from one style to the next faster than ever before,” Johnson said. “We and the leading suppliers in the industry are working hard to significantly shorten the product development cycle, the ordering and manufacturing lead times, the expense of supply chain, and the storytelling and marketing timelines.”

Although Foot Locker officials recognize the fundamental shift in consumer behavior and have been taking steps to address the new operating environment, “it is important to emphasize that we believe premium athletic, which is fueled by casualization and a trend toward healthier and more active lifestyles, is still a great place to be in over the long run,” Johnson said. “Our young customers are still highly passionate about sports, music, style, and the other key elements of new culture. We are committed to adapting our business as quickly as possible in the ever-faster speed at which they move. And we will continue to build more responsive and nimble practices into how new product is brought to market. An excellent example of the initiatives we have been taking to adapt our strategy is devoting an increasing share of capital spending from digital.”

The latter, Johnson noted, includes both customer-facing technology, such as the company’s mobile apps and enhanced e-commerce platform, new POS software, and back to the house capabilities such as infrastructure and data analytics.

“We’re also partnering with the leading technology in data analytics company to significantly elevate our omnichannel position in the market in the coming years,” Johnson said. “Another example of the key initiative is the investment we are making to create a more modern, flexible, supply chain network. We believe that with the compression of product life-cycle making these investments and accelerating our efforts will keep us at the heart of sneaker culture. We have succeeded in the past by knowing individual customers better to engage with them in the increasingly personal ways they expect. Creating and delivering content, which they find relevant, having stores in the key locations they want us to be, and improving our ability to deliver products to them ever faster. We believe these will continue to be the key ingredients of our future success.”

Stellar Loyalty CMO Narina Sippy told Loyalty360 that Foot Locker’s strategy is “well-thought out” and its investments in all areas (front and back of the house) contribute to an outstanding customer experience.

“Foot Locker recognizes the necessity of knowing and innovating around today’s modern consumer, employing big data, analytics, loyalty, mobile, and innovation in smart ways to further differentiate itself,” she explained. “We have seen Foot Locker deliver on this strategy already, with the Foot Locker Launch Reservation app, which lets consumers reserve soon-to-be-released sneakers tied to Foot Locker’s VIP program to reward its most loyal and high-value customers.”

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