Have omnichannel initiatives taken attention away from stores?
Sidetracked by past investments in mobile and digital initiatives, The Finish Line last week revealed plans to reinvest more in its stores.
The shift comes as the athletic footwear specialty chain reported a steep drop in earnings for its fiscal year ended Feb. 27. While the decline partly reflects write-offs for technology assets and the expense of closing stores, sales have also been generally sluggish in a marketplace where its nearest competitor, Foot Locker, is thriving.
First, spending on remodels will be ramped across the chain to significantly update the look of stores. On its fourth-quarter conference call, Sam Sato, who was just promoted to CEO, stated, “We have underinvested in our physical presence over the past few years as we dedicated the majority of our capital spending to essential technology and infrastructure projects.”
Second, increased investments will be made in training and development programs for associates. Mr. Sato said, “We have set out to rebuild the store service culture that was the bedrock of Finish Line’s early success before the surge in digital commerce shifted more of the focus to online.”
Third, IT spending priorities will shift to smaller upgrades and enhancements to its core systems infrastructure following aggressive spending the past few years on a “mobile first” strategy. Key consumer-facing technology investments in its digital platform and CRM will continue.
Finally, the chain will give greater priority to “execution” and driving profitable growth “consistently over the long-term.” The last point addresses numerous missteps in recent years, including a failed warehouse and order-management system installation that led to supply chain challenges, a loss in the third quarter and a write-off in the fourth.
“Our focus and attention to the basics of the business has been the foundation of this company for many, many years,” said Mr. Sato. “And we’ve got to get the attention back on that.”
- Finish Line Reports Fourth Quarter and Full Fiscal Year 2016 Results – Finish Line
- Finish Line’s (FINL) CEO Glenn Lyon on Q4 2015 Results (Earnings Call Transcript) – Seeking Alpha
- Finish Line’s ‘self-inflicted’ blunders leave analysts skeptical about – Indianapolis Business Journal
Have retailers overinvested time and money in omnichannel initiatives at the expense of physical stores? How should leaders balance devoting attention to the new without neglecting the old?