Businessmodel of Foot Locker

Customer Segments

Foot Locker provides services to a broad spectrum of consumers through its chain of footwear and apparel retail stores. The Company’s products are targeted principally at a range of age groups, primarily younger consumers aged between 15 and 35 years old. It also targets men and women who are more fashion-conscious, as well as those involved or interested in athletics, sports, and general exercise, with the Company operating dedicated sports brands.

Foot Locker’s principal market is its native US, which accounted for the vast majority of the Company’s sales in 2015. The Company, however, serves an international consumer base, through its online channels, and physical stores across Canada, Europe, Australia, and New Zealand, but also in Asia, and the Middle East.

Value Propositions

Foot Locker provides value to its customers in the following ways:

• Its international sales and marketing reach, with the Company operating an extensive network of retails stores across the US, as well as markets in Europe, Asia Pacific, the Middle East, and the Americas;
• Its accessibility and digital presence, with the Company enabling customers to make purchases online through its own ecommerce platforms, as well as through affiliates, and providing mobile apps for additional flexibility in its functionality;
• Its broad portfolio of branded merchandise, with the Company stocking a varied catalogue of products and merchandise from a range of popular athletic and fashion brands, including Adidas, Nike, Puma, and Under Armour; and
• Its high-quality customer service, with the Company providing personal assistance to its customers before and after sales, providing returns and exchanges where applicable. ### Channels

Foot Locker operates a corporate website at www.footlocker-inc.com, through which it provides information on its products, brands, and operational performance. The Company also operates an online store at www.footlocker.com, as well as sales portals for its other brands, including www.ladyfootlocker.com, www.footaction.com, www.eastbay.com, www.sidestep-shoes.com, www.champssports.com, and www.runnerspoint.com. These channels allow customers make purchases and schedule deliveries.

Additionally. Foot Locker operates a network of 3,383 physical retail outlets across its multiple brands – including dedicated Kids Foot Locker, Lady Foot Locker, Six:02, and Sidestep stores – primarily located in malls across the US, Canada, Europe, Australia, and New Zealand. The Company employs a team of customer service representatives and dedicated retail staff across these outlets that deals directly with customers.

Customer Relationships

Foot Locker provides its customers with numerous self-service channels, through its core Foot Locker online store and through its various online brands and affiliates, as well as its mobile apps. These channels allow customers to browse the Company’s catalogue of products, purchase merchandise, manage and track deliveries, and view transaction histories without interacting directly with company representatives.

Much of the Company’s sales are made via its direct sales force and customer service staff, who consult directly with customers at the Company’s various retail outlets, assisting customers personally with finding and sizing the products that best suit each individual customer’s needs. By providing quality customer care, Foot locker intends to secure recurring business.

Foot Locker continues to provide personal customer care after sales have been made, facilitating returns and exchanges, and providing a range of information on shipping and ordering through its website. The Company also operates a customer care team that can be contacted over the phone or via a live chat service who can respond personally to customer queries and complaints.

Additionally, Foot Locker operates social media accounts with Facebook, Twitter, Instagram, and YouTube, through which it is able to interact with customers directly.

Key Activities

Foot Locker operates as a retailer of athletic footwear and apparel.

The Company operates through two reportable business segments: Athletic Stores, which is concerned with the operation of the Company’s core chain of retail stores, as well as its Lady Foot Locker, Kids Foot Locker, Champs Sports, Footaction, SIX:02, Runners Point Group brands; and Direct-to-Customers, which is concerned with the Company’s ecommerce businesses, including www.footlocker.com, and other affiliates – including eastbay.com, final-score.com, eastbayteamsales.com, and sp24.com – as well as its international e-commerce businesses, which sell to customers through their Internet and mobile sites and catalogues.

Foot locker operates more than 3,383 physical retail outlets, primarily across the US, Canada, Europe, Australia, and New Zealand, as well as franchised stores in the Middle East, Germany and Switzerland, and Korea.

Key Partners

Foot Locker partners with various companies and organisations, including:

• Franchise Partners, comprising a range of businesses that operate franchised stores across the Company’s multiple brands;
• Supplier and Vendor Partners, comprising suppliers of tools, resources and services, which support the Company’s activities and provide outsourcing functions to the Company;
• Affiliate and Marketing Partners, comprising a range of companies and websites that assist in extending the marketing and sales reach of the Company’s own in-house operations; and
• Strategic and Alliance Partners, comprising a range of companies with which the Company shares resources and collaborates on joint projects. Foot Locker has recently launched a number of partnerships, including a partnership with PENSOLE Footwear Design Academy to provide educational design programs, a tie-up with Adidas to provide a shop-in-shop space dedicated to Adidas products, and a collaboration with Nike and Adidas to market and sell a range of black-on-black designed footwear.

Key Resources

Foot Locker’s key resources are its stock of branded products, its physical chain of retail outlets across its multiple brands, its IT infrastructure and ecommerce platforms, its storage and distribution infrastructure, its partnerships, and its personnel.

Foot Locker owns or leases 3,423 retail outlets worldwide. It also operates The Company currently operates five distribution centres, three of which are located in the US, one in Germany, and one in the Netherlands.

Cost Structure

Foot Locker incurs costs in relation to the acquisition of stock, the operation and management of its physical retail stores, the operation and maintenance of its ecommerce channels and IT infrastructure, the implementation of advertising and marketing campaigns, the operation of its distribution and logistics networks, the management of its partnerships, and the retention of its personnel.

Foot Locker accrued selling, general and administrative expenses in 2015 of $1.42 billion, and accrued advertising expenses in the amount of $119 million. A substantial portion of the Company’s costs relate to the payment of salaries and benefits to its international workforce of 14,944 full-time and 32,081 part-time employees.

Revenue Streams

Foot Locker generates revenue through the sale of athletic footwear products, as well as apparel and accessories, through its network of physical retail stores and ecommerce platforms. The Company’s footwear products account for 85% of its annual sales, with sales of apparel and accessories making up the remaining 15%.

In 2015 Foot Locker recorded annual sales of $7.41 billion, up on the $7.15 billion recorded by the Company in 2014. The Company attributed this increase to growth across both of the Company’s operating segments. The majority of the Company’s sales came from its Athletic Stores segment, which recorded sales for the year of $6.47 billion, with Direct-to-Customers sales amounting to $944 million.