Is Digital Customer Engagement the Key to The Finish Line?

Digital customer engagement is an imperative today for loyalty marketers everywhere, including The Finish Line.

And during the company’s recent fourth-quarter earnings call, CEO Sam Sato−who assumed that post 13 months ago−spoke about The Finish Line’s commitment to digital.

“Shifting to digital, we are now better positioned to serve our customers and fuel increased productivity,” Sato said, following a fourth-quarter fiscal performance that saw comp sales fall 4.7 percent. “In October, we migrated to a new more advanced commerce platform that currently serves our desktop and mobile sites. The new platform comes with a number of advanced capabilities that greatly enhance the overall customer experience such as the ability to handle increased traffic and/or processing.”

Sato said this is critical, “especially during product launches and high volume days. It also supports our new homepage featuring a more simplified message and increased personalization all of which results in improved click-throughs, bounce rate, and conversions. Importantly, the new platform provides us with greater flexibility to make changes to our site so we can continually evolve the shopping experience based on feedback and changes in customer behavior.”

Can enhanced digital customer engagement be the answer for The Finish Line?

Evan Magliocca, brand marketing manager for Baesman Insights & Marketing, told Loyalty360 that he believes that The Finish Line is playing catch up in that department.

“The market is tough for any retailer today so just about everyone is on equal footing there,” Magliocca explained. “So, there’s good news and bad news for The Finish Line. The good news is that a new Order Management System (OMS) is a huge win. Having a great OMS is invaluable and it should really help The Finish Line improve its supply chain. The bad news is that digital still seems to be an afterthought to leadership. Migrating to a sophisticated e-commerce platform is great, but they’re five years too late on that front. The Finish Line seems to be behind the rest of the industry on digital.  That’s worrisome in a retail climate that is increasingly driven by e-commerce and digital influence.”

Sato is pleased with the company’s strides on the operations side.

“When I addressed this audience for the first time as CEO at the start of this past fiscal year, I outlined our strategy for tackling several operational issues in the near term and setting the stage for long-term success,” he explained. “I am disappointed that fiscal 2017 did not play out as we expected from a financial perspective, which was driven primarily by the consumer response to our merchandise assortments. That said, I am encouraged by the significant progress we've made from an operational perspective, addressing the specific areas of our business and organizational structure that needed improving. While there is much more work to do, I am confident that today we have a much stronger foundation to support profitable growth and generate increased shareholder value over the years ahead.”

More recently, Sato noted, the company has seen historic levels on key metrics such as 24-hour fulfillment rates, quick to doorbell delivery time, and store deliveries.

“We expect these trends to continue as we drive greater efficiencies from end to end in our supply chain that will benefit the company and our customers in fiscal 2018 and beyond,” he said. “We made good initial progress this past year, streamlining our operations as we work toward becoming more nimble and efficient, as well as designing the cost structure that is more appropriate for the current business. For example, by combining the Finish Line and Macy’s merchandise and field operations teams, we can now react and respond much faster to changes in the marketplace.”

In early fiscal 2017, the company announced leadership changes in its merchandising and planning and allocation teams that strengthened these critical functions.

“The transformation efforts we’ve undergone thus far have allowed to take costs out of the business and generate approximately $6 million in annualized savings, including a $5 million incremental benefit in fiscal 2018,” Sato said. “We will continue to transform our operating model as we look to gain more efficiencies by further implementing best practices, profit improvements, and leveraging automation. We are confident these actions will help us to profitably grow in today's fast moving retail environment and drive greater shareholder value.”

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