The sneaker sector in the USA

Why Foot Locker has a business model that competes with the online sneaker boom in America

Foot Locker is a leading American company in the sale of footwear and sportswear. Founded in 1974, Foot Locker now operates thousands of physical stores across the United States and worldwide, with formats tailored to different demographic targets. Although the company generates substantial revenue from sportswear, Foot Locker's core business has always been sneakers. From its inception, the company capitalized on the rise of hip hop culture and basketball legends, turning sneakers into one of the most sought-after consumer goods in the U.S. among young American consumers.

In its early years, Foot Locker’s footwear business targeted African-American men. However, over the years, sneakers have become a massive trend in the U.S., with an increasing number of consumers willing to purchase a pair of shoes, driving significant market growth.

What's the best business model for selling in the USA? E-commerce vs. nrick-and-mortar

Seventy percent of Foot Locker's revenue comes from physical stores, while the remainder is generated through e-commerce. However, the rise of online marketplaces specializing in sneaker sales has challenged Foot Locker's dominance in the U.S. market, especially as the pandemic dramatically accelerated online shoe purchases. Furthermore, the American online sneaker market has also shifted towards physical stores, with the opening of specialty shops dedicated solely to the resale of limited-edition products.

In short, the online sneaker boom in America has impacted offline sales businesses. Despite this, Foot Locker has managed to remain relevant in the U.S. market. How has it succeeded?

Sales strategies for businesses in the USA in a changing market

The sneaker business in America has experienced unprecedented growth. Globally, the sneaker market is valued at $79 billion and is projected to reach $120 billion in a few years. While online business models have reshaped the playing field, a company like Foot Locker, which relies heavily on physical retail, has managed to retain its identity in a vastly different market landscape from when it was first established. According to ExportUSA, these are the key reasons for Foot Locker's success in the United States:

• Maintaining its original community of American sneaker consumers who value identity, achievement, and belonging (elements lacking in online marketplaces);
• Introducing the Power Store format: larger, competitive retail spaces offering exclusive lines and on-site events tailored to a well-educated audience passionate about American street culture;
• Launching loyalty programs for purchasing exclusive sneakers: compared to platforms like StockX, the end user is protected from bots because the offer is invitation-only, targeting specific customers;
• Investing $100 million in the GOAT app to penetrate the macro-niche of sneaker resale in the U.S.

The reasons american consumers choose a brand matter as much as the choice of channel

Foot Locker has successfully retained its identity and relevance in the U.S. sneaker market despite growing competition from online marketplaces. Its ability to adapt to market changes and meet the needs of American consumers has been crucial to its success in the United States.