Franklin Bracken: All right. Can you hear me this time? Perfect. Thanks, Tony. All right. As we build an even stronger fleet of stores across our global footprint, we’ll also continue to evolve how we engage with customers from a marketing and a digital standpoint. So our third strategic priority is to deepen our relationship with our customers. Our objective here is to build personalized relationships with customers, driven by data and insights and supported by a world-class loyalty program and technology. We know that doing this well will yield a higher shopping frequency with our customers and increase our share of wallet with them. So let me take you guys through our approach in this area. So first, I want to acknowledge again that as we broaden our reach and use our respective banners to connect with a more diverse audience, it’s critical that we get the right marketing mix by banner.
This is by no means a one-size-fits-all exercise. To help us do that, we just completed our most exhaustive consumer segmentation study yet, which yielded a great baseline of insights about how our customers shop, how they consume media and how they interact in a content-driven omni-channel world. That research study helped us learn that our core Foot Locker consumer, the Sneaker Maven and Fashion Forward, are digitally native, highly engaged on social media and enjoy cultural content and being the first in the know on all things sneakers. And those insights will inform our marketing strategies for the Foot Locker brand, including, for instance, a meaningful investment in social media and content creation. But for example, as Champs Sports engages more directly with the Active Athlete, we know that product functionality, product fit, ratings and reviews and personalized service are more critical to the customer relationship.
So Champs will distort its resources against the in-store experience, try-ons and having more product-based information and content on their digital site and app. And these are just a few examples of how our banners will customize their marketing mix, driven by insights and data to drive more meaningful connections with their core consumer segments. Meanwhile, we know that we have a massive opportunity to uplift our loyalty program. Our current program certainly confirms and demonstrates the value of having engaged members. As shown here, FLX members spent 80% more per year than nonmembers. And we also know that they shop more frequently with us. But we also recognize that our penetration of loyalty members lags competitive benchmarks significantly by a factor of 3x.
And that means that we are leaving a big opportunity on the table to cultivate more profitable consumer relationships. In fact, we have to look no further than our own WSS loyalty program, which drives 85% of that banner sales, to see how powerful and scalable our future loyalty program can be. So we will reset FLX this year to be more meaningful to our core customers, but importantly, to be far more relevant and user-friendly to the new consumers that we aim to acquire. So let’s review how it will change. Our current program was primarily designed to engage with the core sneakerhead, who’s driven by launches and high-heat product and looking to get advantages to product access. And while there’s nothing inherently wrong with that benefit, it’s certainly not comprehensive enough for our future consumer strategy.
Our new program set to test in 2023 and begin scaling in 2024 will be more valuable to more consumers by design. It will fundamentally pivot to be a points-based reward system based on the customer spend and hitting identified thresholds, which will then trigger an opportunity to redeem those points for cash against a future purchase. FLX will also offer exclusive product and service access for members only, gating those benefits and making them available to our members only, which obviously drives the perception and value of FLX membership. It will also leverage our personalization engine to provide custom incentives to drive incremental trips, increasing retention, buying frequency and share of wallet. And our intent is to use this capability to be even sharper with our overall markdown and promotional budgets in the future.
The new FLX program will also be more simple and transparent in design. This means easier for customers to sign up, easier for them to track their status in their account and easier for them to redeem their points. In a few minutes, Peter will talk about our new digital app for which FLX will be integrated into the design and user experience. Finally, there will be deeper integration with our stripers and store teams to drive sign-ups and member usage, including better recognition of members in store so that we can provide more personalized service. Beyond the loyalty program itself, we’ll also invest into a more robust and integrated capability that will enable personalization at scale for both our loyalty program and our digital marketing programs at large.
Our ability to capture more customer data through our FLX program and our consumer data platform, combined with more sophisticated data analytics and machine learning, will yield more effective consumer communications and offers, allowing us to not only be more efficient with our spend but also demonstrate that we know our consumers and make smart use of the data that they provide to us. So let me share an example of how we envision this coming to life in the near future. So success starts with our banners being able to do better customer identification and tracking of their shopping journey as they interact with digital media and our digital sites. In this example, let’s say a customer would see and like a social media post by Foot Locker for a HOKA running shoe on Instagram.
By liking this post, this customer, an identifiable and known customer in our loyalty program, would trigger a follow-up engagement. Our decision engine would then send them a personalized push message through the Foot Locker app. In this case, a message introducing a brand-new Hooker running silhouette that has just hit the market. This push notification would have a direct click-to-ship — click-to-shop link and enable a seamless purchase for the customer if they’re so inclined. So let’s assume that they buy that HOKA shoe online at footlocker.com. After completing the transaction with the customer, we would update their purchase history and membership profile, and we would then turn to engaging them with an invitation to a community event.
In this example, let’s assume that, that customer lived in the Metro Dallas area. Our next action might be to invite the customer to their closest Foot Locker store to join other members for a Foot Locker Run Club event with free giveaways at the store. An e-mail message with personalized imagery of a runner with HOKA Sneakers would be sent along with the offer of a free gift for attending as an appreciation for their loyalty and engagement. Of course, after attending the run, we’d invite them into the store to shop and use the occasion to introduce them to new footwear and apparel. And then finally, as the last image on the right shows, knowing that this customer showed a high affinity for the HOKA brand and running category, we would a few weeks later send them a personalized e-mail that showed them new HOKA styles and colors that they have not bought before.
And certainly, if they had accrued enough points in their FLX membership to earn a cash award, we would message them that they’re able to buy the sneaker with the benefit of their membership reward. So that is what good would look like in our new loyalty and personalization capabilities, and we’re very excited about taking the leap to becoming a more modern marketing company. Now our road map for loyalty in MarTech is a multiyear journey. In fall of 2023, we will pilot our new FLX loyalty program to gain learnings and fine-tune the processes. We’ll also finalize the blueprint for our customer data platform, our decision engine and all of our personalization tools. As we move into 2024, we’ll launch the new FLX program across all of our North American banners building on the learnings from our full pilot.
At that time, we’ll also begin to roll out the personalization engine features, leveraging agile pods to pilot customer use cases and continuously generate new offers and engagements. Finally, in 2025, we’ll expand FLX to our international markets to get the full-scale impact of that platform in Europe and Asia Pacific. And by that time, we’ll have fully adopted and operationalized our agile ways of working in order to leverage more machine learning tools and deploy our test and measurement protocols to drive improve true customer incrementality. Taken all together, our medium-term aspiration is to generate at least 50% of our sales across our banners from members in the FLX program. This is a meaningful improvement over the next 3 years, but we also have a longer-term aspiration to drive at least 70% of our omni sales from loyalty members.
It’s a challenge that our team, led by our new Chief Customer Officer, a new Chief Technology Officer, is very excited to take head on. So that wraps up part one of our presentation in which we’ve taken you through our first 3 strategic pillars. So why don’t we take a 15-minute break, and we’ll return to share our fourth and final pillar, along with our long-term financial targets. Thank you, everyone.
