Foot Locker's online sales grew by double digits in the last quarter
Foot Locker's Q2 2016 earnings call pointed to significant growth in the company's digital business.
The strong growth in this division was in part thanks to social media interactions that drove more traffic to the website. Foot Locker's e-commerce business is part of the growing online market for sporting goods, which is forcing traditional retailers to adapt or risk losing relevancy.
Foot Locker's e-commerce business is booming:
Total sales grew 5% year-over-year (YoY) during Q2 2016, reaching $1.7 billion.
Digital sales recorded a growth rate in the "teens," and CEO Richard Johnson reported that Foot Locker's digital businesses are approaching $1 billion in annual sales.
The company's e-commerce growth can be partially attributed to its focus on engaging with customers via social media. Specifically, Foot Locker is leveraging its position as a premiere athletics retailer to attract shoppers via content featuring professional athletes. For example, the company recently hosted an exclusive Q&A with NBA player James Harden.
Johnson noted that Foot Locker consistently sees high engagement on places like Twitter, Instagram, and Facebook, which encourages online purchases. In fact, customers typically engage with Foot Locker multiple times before buying something. The fact that shoppers are returning to Foot Locker more than once before completing a purchase emphasizes the loyalty they feel to the brand.
Maintaining these relationships with professionals in the sports industry and its shoppers will be vital for Foot Locker, as the sporting goods market continues to heat up. The athleisure fashion trend, in which people wear athletic clothes in nongym settings, like at the office or while shopping, has consumers spending more online for these types of goods. In fact, over half of all media, sporting, and hobby good sales will be made online this year, according to estimates from BI Intelligence, Business Insider's premium research service.
However, this has also given power to new e-commerce pure plays like Fabletics and Tracksmith, leaving traditional retailers behind. Foot Locker competitor Sports Authority filed for bankruptcy in early March 2016 and put itself up for auction the next month. In order to ensure its competitiveness as a member of the old guard, Foot Locker should consider adding more tools to its digital offerings like online loyalty programs and access to exclusive content for its mobile users to keep these shoppers loyal.