Running Industry Executives Discuss Maintaining Momentum and Improving Diversity in This Running Boom
As running sales have reported impressive growth throughout recent months, FN gathered together a number of executives from the industry for a conversation on “Making the Most of the Running Boom.” The event took place today, Oct. 14, at a time when the weather is cooling down and restrictions are loosening — but consumers are still showing a committed interest to running.
Moderated by FN senior athletic and outdoor editor Peter Verry, the roundtable brought together Saucony president Anne Cavassa; Brooks COO Dan Sheridan; Asics VP of categories Ian Dickinson; Heartbreak Hill Running Co. co-owner Justin Burdon; and Afterpay co-founder and North America CEO Nick Molnar.
The panel discussed the impact of the boom on their business; its likely longevity and how the industry could sustain growth; and what the industry can be doing to improve diversity and strengthen their communities. Highlights of the conversation are shared below.
The Impact of COVID-19 on Sales
Dan Sheridan: “We started tracking all the signals as COVID hit throughout our regions and we quickly saw this big demand shock that happened in the marketplace and with retailers. The very first thing was that the impact in sales was significant in brick and mortar around the world. And then I would say pretty quickly we saw the trend start to accelerate on the online channels – and that hasn’t changed. Brick and mortar has come back but the stickiness of what’s happening online is what we’re paying attention to because we think it’s a long term trend that’s accelerating. And that’s happening in all channels, whether it’s specialty run or more general sporting goods.”
Justin Burdon: “Similar sentiments but we had a bit of a different experience; we have four brick and mortar stores so we were actually effectively shut down from mid-March through mid-June at most of our stores. We obviously had to ramp up the e-commerce side of things but once we got fully operational, sales have been great and continue to be strong. To what Dan’s saying, I think there’s going to be that flip between the brick and mortar and digital side of things; the change in the channel through which people buy my shoes going forward.”
Nick Molnar: “We have seen different trends by state as they’ve gone into lockdown at different points in time. March through June saw a pretty material uptick in spending; from July it’s largely plateaued, then following seasonal trends. A lot of customers come to Afterpay.com or our app to start their shopping experience and searches for sneakers were up 57% over that period of time. When we speak with our economic and banking partners, the share of wallet that is no longer spent [on travel and entertainment] is very material and you’re seeing it shift into retail across the board.”
The Shift in How People Shop
Ian Dickinson: “We did see an increase in returning visitors and purchases on our own Asics.com site. I think [another] notable change was members utilizing our OneAsics loyalty program. But the biggest change we saw was conversion rates going through the roof. People came on knowing what they wanted to buy and browsing turned to purchase. The biggest differentiator is people were probably going out less but they were going out to a physical store with purpose and looking for a certain level of service. I think that’s where you see the resilience of channels specific to run specialty. They’re deeply connected with their communities. And it’s pretty amazing to watch retailers bring creative, cutting edge approaches to virtual fittings, product pickups, drop off delivery to loyal customer.”
Anne Cavassa: “We’ve been doing consumer research since the start of COVID and our research is telling us that buy online pickup in store has gone up 62% since COVID hit, which is massive. And we believe this trend, it’s actually far beyond omnichannel. It is that great accelerator to a kind of unified commerce, where a consumer wants a branded shopping experience, whether they’re on your site or in a store. Wherever they’re at, they want a similar experience that’s really around emphasizing convenience and safety and education, and that their product assortment is similar and their experience is similar. They’re just going to different channels depending on when and how it’s convenient for them.”
The Pandemic’s Impact on Races
DS: “Ultimately we believe that events will be here again at some point, in a robust way. Running is so unique in terms of how people engage in the sport — at the root of it it’s about achievement, confidence, goals and that’s not going to change over time. People sign up for events for all different types of reasons but right now, in the short term, it’s really challenging and brutal. Major marathons, if we’re being real, will be in a tough spot for a while until a vaccine is delivered and they can build a model where there’s safety and people feel safe to travel. But if you look at the local events and everything that’s happening even geographically right now, with restrictions being loosened in some of the states, we’re seeing events pop up and be robust in a safe way.”
AC: “For us, races aren’t a major driver of our running shoe sales; it’s more about creating buzz and energy for the brand. I think that being vibrant and continuing to engage, create and partner on those opportunities and being present as runners are finding ways to continue to enjoy running together, is really important. And then really doubling down on the local community events and figuring out how to help them create ways to have safe events: Fewer people, staggered start times, big open spaces. People want to celebrate. I think COVID is this moment of reflection, where you want to do the things that are meaningful to you. And we know that running is incredibly meaningful in people’s lives and sharing it with their community is incredibly important, so finding ways to support that is important.”
JB: “There is a moment in time right now where there are all these other things that are important, other than major world marathons. For example, we just did a run a couple of nights ago which was a protest run because a black man got stopped running on the VFW by law enforcement — presumably because he’s black. No other good reason. It was a moment in time in our community where we teamed up with some of the running crews around: Pioneers, Unnamed, Trailblazers. It was an important time for us to use our platform to speak out about racial injustice and that’s the time we’re in right now. There are a lot more things going on than just major world marathons and for us, being part of the community and using our platform and our voice and being a part of it in that way, is really important for us right now.”
How to Keep The Momentum Going
ID: “The simplest way is to begin and end with the consumer. You have to be tapped in to what they’re looking for, that’s where our job begins and ends. Being engaged with them and understanding what their needs are, what their wants are and what’s important to them, that’s super important. One of the unique things about Asics is our brand was founded coming out of World War Two, inspiring the people of Japan to get moving. ‘Sound mind, sound body’ is actually our founding philosophy. So right now with people isolated and on their own, mental health is a real issue. So getting people active and getting them to move, that is hopefully a connection a person has with our brand that transcends design.”
DS: “One of the things that we’re seeing through COVID is that we’re seeing more people than ever, specifically in the US market, opt into running as their activity for fitness. What we’re seeing is that the new people coming in, 50% are saying that this is a sport and activity that they think they will continue with after COVID so the quantitative data is good – and the qualitative data is good as well. What we’re finding is their mindset is shifting from a casual runner to more permanency in what they’re getting benefits from. It’s not just physical but it’s mental. That’s the light switch for us. Once we understand that, we can figure out strategies to engage with them, whether that’s local events, whether that’s being authentic in how we come to market or sustainability measures we’re working on.”
NM: “There are two components we see in our data: we’ve spoken a lot about performance but there is also very meaningful growth in the casual sneaker world too — very, very meaningful. Last month in the US we sent 15 million leads to our retail partners and there has been a very material shift to home workouts, to running, we’re seeing that well in our data. And we actually looked at it at a very micro, local level and as certain states that are in better form come out of lockdown, the trends aren’t hugely changing so we have quite a bit of confidence [it will last]. We can also see, in the UK and Australia which are at very different points in the cycle of the pandemic cycles, how the trends have changed and we’re very confident that the tide has risen and that we’re at least 12 months away from it largely changing. There might be a slight shift but the ocean isn’t changing form.”
Improving Diversity Within the Industry
DS: “It’s not going to just happen, we all have to focus on it. This industry is not there, we know we’ve got a long way to go, but the way we’re approaching it is looking at all the communities in which we serve, our employees and the industry that we’re in, and then the sport. We’re building programs and initiatives in those three categories. Most recently we started, alongside the Running Industry Association, a new coalition called The Running Industry Diversity Coalition that launched last week and we’re extremely proud to be one of the founding brands in that coalition. I think it’s going to make incredible change in this industry. Our efforts around it are in the right place right now but it’s not just going to happen to us, we have to have goals and initiatives and strategies — and I think we can.”
AC: “I think we are a really inclusive industry but we’re not very diverse. So when we think about positive momentum and how we bring a love of running to everyone, we have a responsibility to actively go out and build a diverse running community. Coming through all of the social injustices that have been occurring, it really started with the death of George Floyd: it was a grassroots, from the bottom-up, group of individuals within Saucony that started a support group that quickly became very action-oriented. They have brought forward some things that we can do within Saucony from a business perspective, from a partnership perspective and then something much more broad across 12 [Wolverine] brands from a corporate perspective. So that’s happening. And one of the pillars of that is absolutely around recruiting and retaining the best, most diverse talent in the industry.”
ID: “What we’ve been doing at Asics is education, an education internally and to our audience in Japan about what’s happening in our country but also beyond that, it’s taking a look at ourselves. We’re forming a task force committee to lay out what we need to do. It doesn’t happen like that and it won’t happen like that. You can’t just have a certain percentage of the executives be people of color. It has to be purposeful in the approach, there needs to be KPIs to put in place. But bigger than that, we’re in Boston — as is Anne, as is Justin as are many in our industry — and I think there are opportunities to come together as a footwear industry in Boston and create opportunities for networking, for people to come together for opportunity, for human connection, so we can have the pipeline for people to get into higher roles.”
This content was originally published here.