This interview is part of our Moving Forward Blog Series, where we ask major brands how they’re adapting to changing consumer expectations from a loyalty perspective post-pandemic.
Customer loyalty has always been a top priority at Foot Locker. It focuses on four things: Consistency, convenience, personalization, and connection.
Company officials always strive to engage consumers with an aspirational brand and a loyalty program with meaningful benefits and experiences.
We caught up with Andrew Gray, Executive Vice President and Global Chief Commercial Officer at Foot Locker, and here’s what he had to say about:
- Foot Locker’s approach to customer loyalty.
- Customer insights gleaned since the pandemic began.
- The biggest challenge ahead.
- Foot Locker’s FLX Rewards program.
- Behavioral changes among consumers in the past 18 months.
Jim Tierney: Since the pandemic started in the U.S., how has Foot Locker viewed customer loyalty and how has that approach been impacted by consumer behavioral change across the board?
Andrew Gray: Customer loyalty has always been important to Foot Locker. Before we launched FLX, our family membership program where customers earn across all of our banners and then redeem centrally, all of our banners had individual programs.
We have always strived to maintain loyal customers through value products, quality, convenient service, and personalized customer appreciation.
Our approach has been to ensure we are consistently offering convenient and personalized service to our loyal customers, wherever they choose to interact with us. – Andrew Gray, Foot Locker
During the pandemic those channels of interaction have been more digital, and the products being purchased have shifted. But the consistency and convenience have remained, as well as the personalized attention and connection to the consumer.
Jim: What customer insights have you gleaned since the pandemic started?
Andrew: We have closely considered the:
Increased use of digital tools blurring the lines between work, lifestyle, and social interaction across generations.
Increased sense of prevalent community, purpose, diversity, and inclusion in society.
Changes in purchasing behavior, with more casualization of clothing, value-based purchasing, and online shopping.
Increased awareness of health and well-being and focus on fitness, nutrition, and mental health issues.
Changes in mobility patterns with less use of public transportation and more local engagements.
Jim: Listening to your customers is a top priority. What are your biggest challenges now and in the future regarding customer loyalty and retention?
The biggest challenge for brands like ourselves is to evolve at the pace of our customers – they move fast, and their expectations are growing.
Fortunately for us, we have plenty of pathways to connect and understand their needs and wants. For instance, beyond social, we have an online forum of 10,000 loyal customers to get feedback from and bounce ideas off and more.
Moving forward, however, we plan to continue to leverage great relationships and engagement to stay in lockstep with them and provide a brand to believe in and meaningful benefits and experiences to keep them engaged and new customers coming in.
Jim: Can you talk about your FLX Rewards program and how has it been received since it launched in North America in February 2020? How did the start of the pandemic shortly after launch impact the program?
Andrew: The program has been received well since its launch in February 2020.
The pandemic definitely affected the program during the months when our stores were closed but have since kept a steady pace.
To date, we are up to almost 24 million members enrolled in the U.S. Additionally, we needed to strip our redemption center of any physical experiences for loyal customers.
Those had to be replaced with other virtual redemption opportunities and offers. Despite these difficulties, we have found that our members are highly engaged and have been actively earning and redeeming their points.
Jim: What are the key benefits of the program?
Andrew: The FLX program offers members the opportunity to earn points for every purchase and redeem them for a variety of rewards – both physical and experiential, as well as participating in exclusive sweepstakes, access to product, and the ability to get a ‘head start’ to purchase a hot new product launch.
FLX is a tiered program (3 tiers), and benefits and rewards become more valuable as members progress through the tiers. All members receive free shipping!
Jim: What has the feedback from members been like?
Andrew: So far, feedback from our members has been very positive. Our members are very engaged and are very willing to share their experiences, their opinions, and recommendations.
Members frequently mention their appreciation for free shipping and their increased odds of winning a launch reservation. And we have some great advancements ahead of us as well … stay tuned!
Jim: Do you think behavioral change among consumers since the pandemic began is permanent?
Andrew: At a high level, I believe that change will be permanent. In other words, there will be a constant evolution of consumer needs and expectations. Our ability to evolve and adapt to change is what matters and we have shown great ability to do so.
For me, there were three notable changes drive by the pandemic that I think will carry through.
One is digital adoption.
Not digital commerce, but digital as part of the consumer journey that will stay. Indeed, I think it has never been more important to physically connect and personalize our experiences with our consumers who now crave that more than ever before.
So, all our focus will be on omni connectivity (vs. digital commerce), digitally engaging our consumers wherever and however they want to shop.
Second point is rising customer expectations. Of us, our partners, society, politics.
The social movements that were in play in 2020 that played out to a captive audience will have long lasting impact. The work to ensure that our brand has true purpose as well as elevating how we know, excite, and serve our consumer will continue to rise in importance.
Thirdly, it accelerated the casualization of society. This had been happening for many years, but the pandemic-mandated WFH environment has certainly pushed more eyeballs into the athletic and athleisure space, and we see this as a continuing as we go forward.
Jim: As Foot Locker slowly emerges from the pandemic, what are your customer loyalty goals?
Andrew: First and foremost, grow the program through additional enrollment and global expansion.
Secondly, learn as much as we can about our members’ buying behavior and demographics, and utilize that data to continuously improve our program offerings and marketing campaigns.
Thirdly, continue to offer relevant experiences and rewards to our loyal customers, to improve retention and CLV.
Digital Connections with Consumers are Here to Stay
As Andrew noted, connecting with consumers digitally is a priority for Foot Locker as this behavior was elevated since the pandemic started.
Part of that consumer behavioral change, as Andrew said, is evolving customer needs and expectations. And how brands adapt to those changes.
An increased focus on health and personal well-being, along with fitness and nutrition helped Foot Locker during these uncertain times.
Evolving at the same pace of its customers looms as the biggest challenge for Foot Locker. But company officials have always emphasized personal connections and memorable customer experiences.
Listening to customers is an even larger focus for Foot Locker now amid heightened expectations.
With Foot Locker’s FLX loyalty program off to a very promising start, the future looks bright.