Foot Locker’s rebound put to the test during holiday shopping rush

Foot Locker is hyped for the holidays, in more than one sense.

The footwear retailer has had a tumultuous 2023 up until it received its earnings report for Q3, which demonstrated that the company’s turnaround efforts are paying off and the holiday shopping season could punctuate that progress in a big way.

• During Thanksgiving week, Foot Locker saw increases in ticket and basket sizes, as well as decent foot traffic and increases in online and in-store conversions.
• Foot Locker is still working through some inventory issues that led to some of the struggles earlier this year.

“The consumer has many options when it comes to apparel. And we will continue to be appropriately promotional this holiday season as we work through inventory and adjust our assortment strategies for 2024,” Frank Bracken, the company’s chief commercial officer, told investors during a call earlier this month.

Get hype: A major part of Foot Locker’s holiday strategy centers around its “Hype for the Holidays” campaign, which kicked off last month. The campaign features NBA players and their brand partners such as Kevin Durant and Nike, as well as Stephen Curry and Under Armour.

• However, the launch of the campaign is running parallel with the company’s new “The Heart of Sneakers” platform, which looks to integrate all of the company’s brand campaigns, online, and in-store experiences and events moving forward.
• Foot Locker explained that “Hype for the Holidays” and “The Heart of Sneakers” attempt to bridge the company’s ties of sneaker culture to the NBA.
• To date, Foot Locker says it has earned more than 1 billion media and influencer impressions since its launch on Nov. 6.

“We know that when we win basketball, it is good for us and importantly, it’s good for our brand partners,” CEO Mary Dillion said on the investor call.

Make the dream work: For Foot Locker, brand partnerships are critical for the company’s success. Given Nike has been very public about its desire to sell DTC, Foot Locker needs to rely on other partnerships to take on the burden. In Q3, the diversity of Foot Locker’s brand assortment rose to 36%, up from 32% last year, and inching toward its 40% goal by 2026.

• Foot Locker sees opportunities to expand its product selection, particularly among New Balance, On, and Hoka.
• With the latter specifically, Foot Locker has brought the number of stores where Hoka is offered to 150 just ahead of the holidays, an increase of 50 during Q3.

“We continue to see these brands bring new customers into sneaker culture, while our banners help bring younger, more multicultural consumers to their brands. We expanded our door base with both brands…in Q3 ahead of the holiday season, enabling access to more consumers,” Bracken said.