Mar 22, 2019 4:58:19 PM
Bob Phibbs interviewed Joey Pointer, CEO of Fleet Feet who shares an inspiring story what he found one day on a run in the rain and how their technology partner Volumental has given Fleet Feet's 176 stores an unprecedented ability to fit and sell shoes. He also shares what it takes to change the culture of a retailer.
Bob: Today I'm joined by Joey Pointer. He is the CEO of Fleet Feet. Good morning.
Joey: Bob, thanks for having me.
Bob: So, who are you and what do you have to do with retail?
Joey: If you're not familiar with Fleet Feet, we are a running specialty store. We got our start back in 1976 in an old Victorian house in downtown Sacramento. Two women, Sally Edwards and Elizabeth Jansen wanted to create a place where their runner friends could shop for products, hang out, meet with other runners and really just serve as a go-to place for all things running. So they opened a store. I'd say we're a 40-year overnight success story, or 40 years later we've grown to 176 locations across the country, and still holding true to that intent and approach that Sally and Elizabeth first started welcoming runners, ingrained ourselves in the local community, and really just offering the best of products to all of our customers today.
Bob: I love the fact that you have that down so well because so many people don't connect back to where the brand started or why. And I think that's just really important, Joey, so thanks for that. How did you start in retail?
Joey: Yes, so I started my journey with Fleet Feet really as a customer. My wife was just starting medical school. We were both avid runners then we just started shopping at the local Fleet Feet store as avid runners. We just thought it was the coolest place to go and to see new product. We didn't have a lot of money at the time, so she started working at the store purely for the employee discount. So, one day I just had that lightbulb moment of, wouldn't it be great to turn my passion into a profession?
At the time I was working at Ernst and Young and that's really what I did from 9 to 5. But I lived for running outside of work and I thought, this Fleet Feet, there's more than one of these and their corporate headquarters is based right here in my hometown. I think it took me a year or two to convince them to hire me. At the time we only had about five employees in our corporate office, but one thing led to the next and I'd say I'm a Jack of all trades, master of none. I've done about every position within the organization and it's been a fun ride and journey ever since. I've been here for going on 15 years next month.
Bob: Wow, that's amazing. Well, you runners are dedicated people, my goodness. When I spoke at the running event down there, it was in Austin, a couple of times and you guys were getting out there at 5 a.m. because the...get your runs in. I love all that stuff. I think that passion, that dedication certainly speaks well to your abilities at the brand, right, because you understand your customer. You are the customer.
Joey: I am. I always think about, anytime we're launching initiatives, I'll turn it to my wife and I'll ask her, I'm like, "Hey, what do you think about this?" Because I mean, she is sort of our sweet spot for a customer. And sometimes she'll look at me and like, "What are you thinking?" And other times she's like, "That's a great idea." And so I can always tell whether it's going to be a good or not just by her knee jerk reaction.
Bob: So what's been the biggest challenge for Fleet Feet, let's say, in the past three years, and how'd you overcome it?
Joey: You know it's funny, when I think of challenging, the things that we've done over the past three years, and this will tap back into Volumental, I mean, one of the biggest things that we've done is, we radically changed our fit process. For the last 40 years, you'd walk into one of our stores and we'd use a Brannock device. So this cold metal tool to measure your feet.
Bob: You're talking to an old shoe dog. I totally get the Brannock device totally.
Joey: Perfect, yes. You understand, right?
Bob: With my friend, yes.
Joey: But as times have changed, shoes and manufacturing capabilities have changed and evolved over time, but what hasn't changed has sort of been like the process and the store. And so, we decided that we wanted to change our process. We got introduced to Volumental, and you can appreciate this, right? I mean, change is hard. It's scary. You've got people, we refer to as mules, that you're dragging, kicking and screaming along the way. And we had a lot of heated discussions about sort of why we wanted to change.
But I think to be successful in any organization, if you want to change, you just have to involve as many people as possible, but as much as possible, as soon as possible. And so that when you get to launch day, everybody's had a chance to have their voice heard, to understand the why of what you're doing. And we were also very clear with all of our employees, we refer to him as outfitters, that hey, we don't want technology to replace you. We want this to be a tool that enables you to provide a better experience to the customer. And I mean one of the things I'm most proud of over the last few years is how quickly we've adopted the technology that Volumental has, we refer to it as Fit ID in our stores, and how it's evolved our process. And all of our outfitters and really embraced this and it’s just led to a better customer experience.
Bob: Well, I think that's the big thing that the reason you would have gone after this is because runners, in particular, are meticulous about the fit of their shoes. I mean, let's face it, you don't have margin for...if I'm going to go run for 25 miles, 30 miles, I don't have room for error to have something misfit, the heel's too wide or it's too narrow. And what intrigued me when I first heard about Fleet Feet and Volumental was this whole idea that on an iPad, after you've gone and you've scanned my foot, it builds that 3D image of it, but then on your iPad it cuts down your choices and you say, these are the shoes that are most likely to fit you. And then as well, if you start showing these shoes to people and they're not selling, then that information goes back to the vendor like, hey, this isn't working. I mean, that's pretty amazing to have that kind of a dialogue with your vendors as well as your outfitters. Correct?
Joey: A hundred percent. I mean, I think that if you go all the way back to the customer, and I'll get back to when I was a customer at Fleet Feet, you had come into the store, they'd pull out the Brannock device, they'd make a few marks of my feet, but then they would disappear into the back room and you'd wonder, what are they doing back there to bring the shoes back to me? And so, fitting is like this. It's a craft, right? It's part art and part science. And what Volumental has allowed us to do is to bring the science to life so that customers can see it. I mean, we live in a digital age, right? I mean, we all have cell phones and our cameras and alarm clocks and maps and photos.
And we can take somebody, Volumental you stand up on this scanner, in three to five seconds, you get a 3D rendering of your foot. And we have 12 different measurements that we can show a customer, but then we can also point out, "Hey, here's your arches. And so we've scanned a million feet, so we can say that, your arches are 88% higher than the rest of the population here in the U.S." And it just really gives the consumer more confidence in terms of what our outfitter is telling them, because they can see their feet the way that we see. And when you're talking about data, I mean, data is powerful, right? So now we have customers and their feet scans and then we know what they walk out to the door with, which pair of shoes they liked.
And so now we're building the algorithm of, you know, Bob, if you came into our store, we would eventually begin to realize, hey, you like your feet, you like your shoes really snug. And so the next time you come into our store, we already have that and we can start to recommend products that may fit a little bit tighter. Or conversely, if you like more room in your shoes, we can start to recommend products. And so, at the end of the day, it allows our outfitters to still be the hero, but it just gives them a much more powerful tool in their tool belt.
Bob: Well, I think that's so important. And I think what attracted me about this product was this idea that the customer, you're not doing this like a magic mirror. Like, oh, look what these will look like on your feet. You're serious about it, right? I mean, to me, that's what I take. Because again, I was an old shoe dog and I started, I think, Nunn Bush shoes and they wanted to flourish them, and then you realized that if you've got the fit right, then they bought four or five different pair. I mean, the challenge for runners stores I think always is going to be, you get that perfect fit on one pair and then the guy is supposed to reorder it all the time, whether that's online or something. And so I think what this does, I'm doing a complete sales job for your client but...
Joey: You're doing a great job, keep going.
Bob: ...is that if I came in and you know I have model X and I really liked that fit, well, now you can actually say, "You know, dude, you don't have to have that same basic white sneaker running shoe. You can have these five other ones as well." And you can have this dialogue about, "Certainly, get that same one, but you know what, with this tool we know with confidence that you're going to be able to get as good or better. Would you be interested in it?" Now you've got that ability to still sell what retail I think does well at which is what's new. I get it. The runner's had this shoe for a long time, loves it, well, that's great. But we've made some pretty big improvements certainly in the way we make shoes in the last 10 years and I have to believe that continues to drive innovation each year.
So I think again, the focus for you is bringing them into the store to get this. And then the other thing I like about it is, if that becomes your goal, the goal is I go and scan everybody's feet, whether they buy or not because now we have that data point, and now you're going to email that data point to them and they can go like, "Wow, those guys really did know a lot more." And suddenly a lot of other shoe stores are found wanting, right?
Joey: Exactly. And we've been able to do some really interesting things with the data. We've taken scans from about 100,000 people when we worked with Karhu. So we're the exclusive distributor of Karhu here in the U.S., and we've taken all of these foot scans and actually shaped the last or the mold that the shoe is made off of. And so we launched a shoe last year called the Ikoni. And I've never found another retailer who's taken actual foot scans at the scale that we've done and really let the consumers influence the design and the impact of the shoe. And so, I mean, data is an amazing thing. I mean, you think about it as a retailer, right, we also have a lot of inventory, and so sometimes you may find yourself overstocking a particular style or model. But what we've been able to do with Volumental's help is we can then go back through our database and say, "Hey, tell me the people that this shoe would be the perfect fit for, right?" And so we're not trying to sell the shoe for 50% off and just as a sidewalk sale, but let's actually get it on the right foot. And so, I think that once you get the data, how you use it can make all the difference as retailers.
Bob: Well, I'm a brick and mortar guy so I've got to be honest with you. I think everything should come back to the store. Here's the reality, online still hasn't be able to fix the point that 30% to 40% of returns happen on online and in-store is, like, 6%. Until you fix the returns, until you fix the idea that free shipping both ways has costs and very few people have found a profitable model for that, whereas brick and mortar still can influence everything because they can get everything else that goes with the running shoe. They can go through and have that experience and when they bond with that personal employee, I think that ends up being what your brand is about. And that's what I was so taken by Fleet Feet that you have really made this big push into technology.
And as you were saying that to me, I was remembering being at an IBM conference last year and they talked about how they bought The Weather Channel and now you can query the data and say, our stores are going to have, we want to do a run on some day. What day should we pick? And they can overlay the people most likely to go on a run and then what the weather might be that day nationwide and all of it. But it all starts with that data from the customer. That's the thing. And so many businesses, when I was a Shop Talk last week, they were talking about they were so frustrated with all the data walking out the door. They didn't know anything about somebody who walked in. So I mean, walk me through that, Joey. This had to have changed in some ways, the way that you operate your customer service I would think, because if it was me, I would say the goal is everybody gets scanned whether they buy or not. Is that what you've adopted or are you still waiting for them to say, "I'm looking for a pair of shoes" and then scan it?
Joey: A hundred percent. I've traveled a lot in Europe and you travel, and you see technology, and this happens everywhere where the technology is just sitting in the corner of a retail store and it's just gathering dust. And so ultimately when we launched this with Volumental, our goal was we wanted to get to a 100% scan. At the end of the day we wanted everybody to go through this, not only for the experience but as you're pointing out, for the data. Because now we have their names, their email addresses, you've got foot shape, you've got the type of surface, how frequently they're running, and it just adds a lot of power to be able to touch and to understand the consumer in a totally different way.
Bob: Well, I love what you said about that and you're not having to rely on discounts. Oh, we're oversold. You can actually say, "This is your shoe, it now comes in this." And I'll pay that price, right? Runners are loyal to that. They'll pay for the price.
Joey: It's funny you were talking about there's an old Chinese proverb, it's like, "May you live in interesting times." And, as a retailer in this digital sort of Renaissance era, I just can't think of a more interesting time than today. I mean, we're a brand that's been around for 40 plus years and I always look at our technology stack. When I first started, we didn't even have a technology stack. We had AOL email addresses, and so our technology stack was just this house of cards sort of duct taped together. And at that time it was, like, 15 years ago, you were trying to figure out how to make your website more sticky. But today, it's how do you make the store more sticky. And Volumental is one of those things that it gives the customer a reason to come in to engage with our employees because that's when we shine. When we can sit there and figure out what your goal is. Maybe you just had achy feet or maybe you're just wanting to run your first 5K or maybe you just want to go to Disney World and be able to walk around for four days with your grandkids. And at the end of the day, this just opens that door to those conversations so that our outfitters can shine. I say at the end the day, our employees are our secret sauce. I mean, they're day makers, right? Because they can get one on one with that customer and understand what they're really trying to do and then we can just use these tools to provide solutions.
Bob: Absolutely. I think it all starts with, I have to be curious about why today did she walk in the door? If I'm not curious, I'm another guy trying to sell a pair of shoes. And I've seen some limited adoption when I go into some stores and they have all their inventory on an iPad and they're like, "Isn't this great?" And I'm like, "That's not so great." They're like, "Why not?" And I go, "Because all you're doing is you're going, do we have 11 in this? No, we don't. And that doesn't serve the customer." I mean, again, as a shoe dog, I would go back and was like, all right, 11D. I don't have 11D in this. Okay, so what's going to fit like this? What's going to do? And my mind starts working and I start putting together, I got to have two or three other options.
Well, in this case, you're able with Volumentals help to go through and understand, okay, so these are the eight that are going to fit and your outfitters still have to know their merge because that's the launching off part. But listening lets them understand that, okay, so the purple is really important for this guy or the blue or whatever the specific features are and you've moved past. It's just a way to go check inventory to say, "No, I'm checking inventory for you," which is I think the key of brick and mortars' success is, it has to feel like this is just for you.
And I'm going to ask you a hard question here though, dude. So Joey, I know it sounds great. Everything went well. Everyone's rolling out. We're all doing 100% scans. Life is wonderful. Well, we know that's not the case. So, a lot of my listeners are big retailers, medium size, even small mom and pop. So there had to be challenges about rolling out such a change to the DNA of the way that your stores are. So can you give me a pitfall and then any advice for people that would be looking at such a large-scale innovation?
Joey: I think the pitfall is, at the end of the day, everybody has to be bought in, right? I mean, it can't be somebody at the top just thinking, "Oh, this is a great idea." I mean, you've got to want it all the way down at every level of the organization. I always talk about in our organization, the pyramid is upside down, right? At the end of the day, the most important person at Fleet Feet is the person who works on Saturday, because they are the face of the brand and anything that we do has to be designed to make them successful. And so I talked about change and involving them. I mean, we had lots of conversations and got them enrolled.
Bob: So give me an example of a bad conversation. I mean, I want to hear a little...sorry, I just want a little, give me a little bit. So you're in a meeting, they're saying, "Hey, guys."
Joey: So the bad conversation would be, like you Bob, right? So you're the shoe dog, you've been doing this for 20 plus years. You're like, "I don't want to use that piece of technology. Why would I do that? It's going to slow things down. I don't have time to learn that. I've been doing this for 20 years, Joey. I don't want to learn something new." And so then you're like, well how do I approach that?
Bob: That's what I want to hear.
Joey: Because you have a lot more credibility and expertise. But I think that if you go back to this fundamental question of, what do we want versus what do our customers want? There's a lot of businesses and people who always start with, what do we want is the business, right?
But I mean, that's why like the Uber's of the world and everybody else have won and been sort of so disruptive because they started with what does the customer want? And so when you, Bob came to me and said, "I'm not going to change," well, you're starting with you and why you don't want to change. But let's talk about what's really important, the people who are coming into our stores, what do they want? What leads to a better experience for them? And so that's how we took the conversation. I mean, I used the word mules earlier, that's what we called...if I'm going to say you're the stubborn person who's been doing it this way for 20 years, we would refer to you as a mule.
And so we had different labels of different types of employees of, like, how you're going to have that conversation. And the mule is the person that you're going to drag, kicking and screaming with you to the finish line of we're going to watch this. You're coming with us. And you've got some people that are outrunning you. Our newest employees showed up and they were like, "Man, this is great."
Bob: So thrilled. Exactly.
Joey: This is the newest thing ever. I don't know how you guys did it any other way. We're retailers, right? And so at the end of the day, as retailers, you always have churn of employees.
What Volumental has also allowed us to do, it's allowed us to keep our best fitters because Volumental in the fittage is the sum of all of our fits. And so it allows you to keep that knowledge when that employee goes and moves on to a different career path, we still retain their knowledge, whereas before it just went out the door with them. And so that's one of those powerful things that I don't think I fully appreciated when we went down this pathway. But now after being in it, you're like, "Man, I get to keep and retain all of this knowledge and I can still use it and make the next outfitter who took the place of the person who left even better."
Bob: I think that's brilliant. And that's the heart of this conversation today. As I was thinking about it, and you're saying that the mules, I think that's a great way to talk about it. With my online sales training, we have people that are mules. But the problem is if you don't get the mules on board, they become the saboteurs, right? So then they're like, "It won't work. I've tried it." And then it just takes one bad apple who just starts, looking for every possible thing that went wrong or anything. And now other people were like, "Oh, I hadn't thought of that. You're right." And suddenly everything falls. So your point is, no, they're just a mule. We're going to pull you stubbornly into the future with us and you're going to like it. I mean, I think that's great.
I don't want to take too much of your time. You've been generous with it and I particularly like the whole idea of, again, brick and mortar stores are shining in this age of disruption. If I see one more silly article about retail apocalypse and no one's going to be buying anything except through a chip in our head through Amazon, I'm going to scream, because quite simply a lot of brick and mortar stores are doing really important things and you know what? The winners are just like you, which starts with the customer. It starts by saying, we were doing this before. There's nothing wrong with what we were doing before, Brannock device, but also we can add technology that actually takes that further. It's not just replacing it because now it's still going to take a human conversation. How much does an average shoe run for your store roughly?
Joey: Around $120.
Bob: And what's the high end?
Joey: Two hundred, 250.
Bob: Again, you're not the discount two for one, BOGO operation. You're the outfitters. And that whole idea of how do we do better, when that's your focus, I think the idea of technology ads really gives you that not only social creed, but also gives you the increase in customer satisfaction scores. I mean, amazing.
So personal question. So when you feel overwhelmed or unfocused or maybe you lost your focus kind of temporarily, what kind of questions do you ask yourself or what do you do to get out of it? You probably just go for a run.
Joey: That's the answer. I love to lace up my shoes and just run and let my mind wander. And I was telling our staff the other day, I think this is probably about a month ago. I had an upcoming board meeting. And so it was early Saturday morning. I got up before the rest of my family, before the chaos in the house happened. So I started reading the newspaper and I think that day there was news of no light at the end of the tunnel relative to store closures. Payless, they just announced it was shutting down its locations, and the third article was something about Amazon. At the end of the day I was like, "Oh my gosh, this is killing me because the board is always reading the latest of The Wall Street Journal article." So I went off on a cold, wet, rainy Saturday morning just to let my mind kind of wander.
And so I ran to our office. And our office here in Carrboro sits above this store, and I mean, this isn't New York City or Chicago, but I mean, it was a cold wet. I mean, it was like, 35 degrees and rain's coming down sideways. But I get to the store and, like, there's 300 people standing outside of our store. The music is blaring and they're just there for the Saturday morning fun run, and I'm like, this is miserable. Why are all you people out here? And so this is the crazy thing, Bob. And so if you show up to one of our fun runs, we have a box in our stores. It's just a plastic box and it says "Keys." And so I walk in and, like, not only there's 300 people...because nobody wants to run holding their car keys. It's just a miserable experience. So these 300 people have just thrown their car keys into this box and then disappeared for two hours. And there's not many retailers that you would go into and just leave your car keys for two hours at a table beside the front door unattended. And so that just doesn't happen. But that happens at Fleet Feet every single week.
And we have 10K runs and all sorts of things. I mean, at the end of the day, Fleet Feet has and will continue to be successful because of our ability to just sort of, like, bring communities together. You know what I mean? It's like a magical thing. And usually when I run, I don't always have those Aha moments, but that week it was like, I just ran into my answer. I started in a pretty miserable place, reading about retail apocalypse, and then I just saw what was truly happening at our store and that was just a great moment for me personally.
Bob: Well, I think you have to just to go take that one step further. Remember all those people just read The Wall Street Journal, all those people said, "Dear God, there's no hope as a civilization, as a country, as a human being, what the heck am I going to do?" And it's like, "I'm going to lace up my shoes and go for a run." And I think that's a great place for us to finish up. Although I always ask my one question which is, tell me something good about retail.
Joey: At the end of the day, something good about retail, I think we continue to be successful because of sort of the personal relationships and experiences that occur in our store every day. And two weeks ago I had the privilege of, I went to a baby shower, so we had two employees Nora and Jordan are having their first child. They've actually had it now, but a customer just loved Nora so much, that she organized a baby shower. And so I'm thinking, there's going to be, like, 15 people. It's at the store and I felt obligated to go. I show up at 7:30 on a Sunday night. There's over 100 customers into our store. It's a potluck dinner, so all these customers have bought their own meals and they bought presents for Nora and Jordan and they had a baby shower for them.
And I just thought, "Man, this is unreal." And I just think that at the end of the day, our outfitters just connect so well with our consumers and there's just moments when our expertise and passion just create an experience that isn't transactional, right? I mean, it's transformation. At the end of the day, simply put, what we do matters. And I think it matters even more so now than it's ever mattered before. And so I still think that as a brick and mortar retailer, our best days are yet to come.
Bob: I would agree with you. I just did a survey with Oracle Netsuite, and we looked at this disconnect that 53% of executives felt that their stores were confirming and warm and embracing. And like, 13% of customers said, "No, I feel more anxious, more alone and more overwhelmed when I go into your stores." And what I appreciate about that last story that you shared with us is clearly your customers are meeting the experience you think that they're getting. In fact, more importantly, you may not value it as much as they do. That they're the ones willing to do that. Well, you've been really generous with your time, Joey. So how can they find out more about your stores?
Joey: You can visit us online at fleetfeet.com. Find your local store and go in and experience the magic of Fleet Feet in person.
Bob: That's fabulous. You are an amazing guest and thanks so much. Really personable, great stories. Right on point, and I really appreciate your time with me this morning.