Finish Line Focuses On Retail Tech
The Finish Line has seen sales slip, but as the company's customers move to mobile, the athletic footwear retailer isn't finished. It's just focusing on digital tech.
"The second quarter was more challenging than we expected as the market plays for athletic footwear became much more promotional in July and August," said CEO Sam Sato. "This put pressure on sales and gross margins leading to earnings per share that were well below planned."
Comparable store sales decreased 4.5% in the company's second quarter 2018 and consolidated net sales decreased 3.3% over the prior year period. For the third quarter, the company expects Finish Line comps to decrease between 3% and 5%.
"While we are planning for a challenging retail environment in the near-term, we are confident that the merchandise, digital, in-store and operational initiatives currently in place will allow us to achieve our current full year outlook and best position the company to deliver increased shareholder value over the long-term," said Sato.
Moving forward, Sato said the athletic footwear retailer will focus on digital and its mobile experience as more than 70% of its customer traffic has shifted to mobile.
"It's about speed, search optimization and a smooth checkout that will improve the customer's ability to convert," said Sato.
The footwear retailer will be rolling out mobile enhancements before and after the holidays, such as improvements to page load speed, checkout flow and cross device usability enhancements. Post-purchase customers can now track their packages and receive notification of package delivery details including when the package has arrived at their doorstep. Before the end of 2017, Finish Line will roll out a way for customers to initiate a return directly from the website.
At the center of the company's mobile engagement strategy is The Finish Line app. With the latest iteration launched in Q1, the company can now create opportunities in the app for customers to be informed of products, gain access to coveted product, watch live content and earn loyalty rewards on their next purchase. Future releases will incorporate in-store beacon and geo-fencing technology to launch tailored offers and in-store opportunities based on customer preferences.
In-Store Retail Tech
The Finish Line remodeled 10 stores more stores in its second quarter with its new design format. This includes flagship locations in Chicago and New York. By the holiday season the company expects to remodel another 10 to 15 locations including an additional flagship store.
"The continued elevation and development of a connected store experience is a critical factor in driving relevance and engagement with today's consumer," said Sato. "In these stores we've taken storytelling to the next level through the integration of technology."
The stores feature RFID digital displays, otherwise known as The Finish Line sneaker feed, which give shoppers the ability to drop a shoe on a shelf and see unique content, such as consumer ratings, video inspiration, product details and socially integrated images that showcase how shoppers should style the product.
"This exciting feature can add to a customer's confidence in their purchase while making the entire shopping experience more interactive," said Sato.
These stores also introduce the shoe-eye-view mirror. This new experience enables customers to see their footwear superimposed into unique environments like the streets of New York City or a basketball court and share it with all their friends on Social Media.
"No longer is the store environment only about the transactions, it's about being memorable and shareable," said Sato. "As we look forward, you can expect Finish Line to continue to build engagement experience than enhance our relationship with the customer."