Foot Locker said Friday that it would close all of its 231 Footaction locations “to position itself for the future” as well as “to focus its growth on its iconic banners,” according a company press statement. Foot Locker will convert one-third of its Footaction stores into other banners such as Champs Sports and Foot Locker. As leases expire in the next two-years, “the majority” will close all remaining Footaction locations. Foot Locker stated in the release that the strategic decision will allow it to better serve its customers in a post COVID market. Foot Locker reported earnings Friday. The company posted net sales growth in the first quarter of this year by 83 percent. Comparable to 2018, net sales rose 3.6 percent. The company also reported a profit of $200 million, which is compared to $110 million in a year earlier.
Total Retail’s View: Foot Locker made a wise strategic decision. On Friday’s conference call with analysts, reported that Foot Locker CEO Dick Johnson said that Footaction’s profitability and productivity was lower than the company’s average portfolio. He stated that the company had converted some Footaction stores to Foot Locker stores in New York and Los Angeles in 2020 and that these spaces were more productive. The strategic decision was made partly due to the test results. Johnson said that Foot Locker undergoes a periodic banner review. This has in the past led to the closure of Runners Point in Europe 2020, and a recent move by Champs Sports and Eastbay to better align Champs Sports and Eastbay in America. Johnson also noted that 85 percent Footaction stores are within close proximity to one of its banners. This is despite the fact that efforts have been made over the years, to distinguish banners with different product offerings.
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Five Strategies to Increase Client and Employee Retention
Part-time retail employee turnover rates are at an all-time high of nearly 67 percent. This is despite the current pandemic. These turnovers average $3,328 per company to hire, train, and replace a replacement. In addition to this, disruptions in frontline employees can have a negative impact on customer service and retention. Retailers need to be aware that customers often feel what’s going on inside an organization.
There are several workplace management strategies retailers can use to increase client and employee retention.
1. Prioritize Open, Two-Way Team Communication
One thing that companies can’t lose sight of is effective and efficient workplace communications. Ineffective communication within the company can lead to stress for 80 percent of American workers. Management transparency can result in up to 30% higher retention. Retailers can use effective communication to identify workplace issues, gaps in employee performance or engagement, gauge customer and team satisfaction, and many other things. A simple, easy-to-use platform can be used to facilitate two-way communication. It eliminates the confusion and operational mistakes that result from managing too many touchpoints.
2. Centralize Workplace Operations
Many workplace problems directly impact employee retention. A study showed that 40% of workers quit a company due to lack of access to modern digital tools. In addition, 45 per cent of employers claim that outdated technology hinders their productivity.
Retail employees need to be able to understand the systems so that they can make the most of their time. It becomes even more difficult when they have to manage multiple platforms simultaneously. A centralized, one-stop shop approach to workplace operations will improve productivity and serve the business better.
3. Set clear team roles and responsibilities
To ensure a loyal customer base and a productive workforce, employees need to be able to understand their roles and provide consistent customer service. This allows employees to see how their efforts contribute to the company’s overall success. 49% of employees stated that they would give up a portion their salary to have more meaning and ownership. A team that is working towards a common goal increases productivity, which in turn improves customer satisfaction.
4. Modernize and reevaluate employee training
Training is an essential part of fostering a team with the right skills, especially in an industry that has high turnover rates. Only 37% of companies believe their training is effective. Training is a combination of education and experience. Employee training should continue for long-term results. A performance-based, assessment-based training program provides feedback to employees and rewards them for their skill development. This is a great way to achieve desired workplace outcomes.
5. Encourage a positive work environment that thrives on teamwork, not competition
Strong workplace cultures can have a direct impact on employee productivity. This makes positive culture an important factor in business success. Management must provide opportunities for employees and their peers to interact with their leaders in order to create a positive environment. According to executives, 71% believe that employee engagement is crucial for their company’s success. Companies with engaged employees are also 21 percent more successful. Engaging employees internally can lead to reciprocal engagement with customers and increase brand loyalty.
It can be daunting to address major issues like customer and employee retention in retail. However, it is worth taking the time necessary to review your operations strategies. You can retain top talent by creating a positive, employee-centric environment that is more attractive to your employees.