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Foot Locker Overhauling Loyalty Program, Opening Larger Format Stores

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Six months into her tenure on the job, Foot Locker President and CEO Mary Dillon is spearheading numerous changes at the international retailer in its renewed effort to capture a larger slice of the $80 billion sneaker market and perhaps a healthy piece of the broader casual footwear market.

Dillon, the former head of Ulta Beauty, and other senior Foot Locker executives outlined some of the company’s go-forward strategies during a JPMorgan event last week. For one, Foot Locker intends to grow its net square footage by approximately 10 percent over the next three years despite plans to shutter 300 of its current 2,700 doors. It will do so by increasing its number of larger-format locations—including Community, Power, and House of Play banners—from 120 stores to 400 locations and exiting mostly mall locations. The larger doors will give Foot Locker the opportunity to introduce new brands or increase shelf space for current labels without impacting Nike’s presence in its locations. With a significant focus on basketball and kids, the retailer intends to balance out its portfolio over time.

“We want to know what are the motivations that create (customer) behaviors and how we can tap into that,” Dillon said.

Foot Locker’s mission with its FLX loyalty program is to make it simpler to use by utilizing a point system to reward customers for their purchasing volume. By 2026, the company intends to increase its loyalty sales to 50 percent of all revenues from 25 percent currently.

Meanwhile, through in-progress improvements to inventory visibility and shipping data for customers, Foot Locker hopes it to expand its e-commerce penetration to 25 percent of sales from 17 percent currently. Also, there are plans to launch a revamped mobile shopping app in 2024.