Running Insight - June 01, 2018 by Diversified Communications

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RUNNING INSIGHT

Brooks Is Getting Personal

The Genesys takes customization to the next level in a running shoe. / By Mark Sullivan

n what the company is calling “the first ever personalized running shoe,” Brooks will introduce The Genesys in January, 2019. The personalization process will be based on a series of data captures that includes 3D foot scans, dynamic gait analysis

RUNNING INSIGHT ® is a registered trademark of Diversified Communications. © 2018 all rights reserved. Running Insight is published twice each month, is edited for owners and top executives at running specialty stores and available only via email.The opinions by authors and contributors to Running Insight are not necessarily those of the editors or publishers. Articles appearing in Running Insight may not be reproduced in whole or in part without the express permission of the publisher. Divesified Communications, 121 Free St, Portland, ME 04101; (207) 842-5500.

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and foot pressure measurements from the HP FitStation, which is also used to create Superfeet custom insoles. The FitStation creates a unique digital profile of the individual runner based on his or her biomechanics. To create a personalized

Mark Sullivan................................msullivan@Divcom.com Troy Leonard.................................. tleonard@Divcom.com Christina Henderson..................chenderson@Divcom.com Managing Editor....... Michael Jacobsen: mjacobsen@Divcom.com

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Brooks Genesys (continued) “At Brooks we are focused on developing industry-leading innovations that deliver the best experience for runners. To achieve this vision, we continue to invest in in-depth biomechanics research and partnerships with key industry leaders.” PATRICK PONS DE VIER SENIOR VP–GLOBAL FOOTWEAR BROOKS

The FitStation powered by HP is at the heart of the Genesys customizable technology.

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Genesys for each runner, Brooks will combine the runner’s digital profile with the company’s Run Signature principles, which indicate the best way to enhance comfort and improve performance. The goal is to create a running shoe that works with the runner’s natural motion path of his or her body. The resulting data is translated into specific fit and feel requirements for each shoe and assembled using a state-of-the-art DESMA polyurethane injection-molding machine. “At Brooks we are focused on developing industry-leading innovations that deliver the best experience for runners,” explains Brooks senior VP–global footwear Patrick Pons de Vier. “To achieve this vision, we continue to invest in in-depth biomechanics research and partnerships with key industry leaders. “We believe that the future of performance running is personalization and the Brooks Genesys is the first step in delivering this experience to runners,” he adds. Brooks will launch Genesys in the U.S. with 1914 limited-edition pairs, which will be available via special order through select retail partners. n © 2018 Diversified Communications

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RUNNING INSIGHT

The Running Event Sold to Diversiﬁed Communications Purchase also includes Running Insight and the 50 Best Running Stores in America event.

iversified Communications has purchased The Running Event and Running Insight from Formula 4 Media, LLC. The purchase also includes the new 50 Best Running Stores in America event, an awards celebration recognizing outstanding retailers that will be held June 21-23 in Minneapolis, MN, following the Fleet Feet Annual Franchise Conference in the same hotel. “In addition to expanding our U.S. event portfolio through launches, we have been actively seeking acquisition opportunities within this tight U.S. market,” says Theodore Wirth, president and CEO of Diversified. “We were very excited when the owners of Formula 4 Media were open to our initial inquiry and we are now very pleased to be working with them through the 2018 event to ensure a smooth transition.” Diversified is a family-owned producer of trade shows and conferences that owns 15 leading events in a variety of industries, including seafood, maritime, technology and health care. The company has 506 employees on three continents and appears annually on The Best Places to Work in the State of Maine list. 6

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The Running Event portfolio will be managed by Executive Vice President Bill Springer and will operate out of Diversified’s headquarters in Portland, ME. Diversified has hired the show’s Event Manager, Christina Henderson, and she and Springer will work with Mark Sullivan and Troy Leonard, two of the founders of The Running Event, who with the sale have left Formula 4 Media to serve as consultants through the 2018 event. “With Christina’s talent on board, Mark and Troy’s consultancy and our extensive event experience and infrastructure we are looking forward to furthering the event’s mission to support this growing market and more specifically to help the running store owners and executives adapt to changing consumer behavior and continue to increase their profitability,” says Springer. “Like all good trade shows, The Running Event is the annual meeting place for the industry,” he adds. “With Diversified’s extensive experience in producing similar events, we see many opportunities to make the event more compelling for everyone in the running retail community. Diversified’s initial foray into the market will be at next month’s 50 Best Running

Bill Springer

Christina Henderson

Stores in America event. “We look forward to getting to know the industry and getting to work on making the 2018 event the best ever,” Springer says. “Diversified Communications is the perfect company to help grow and ensure the long-term success of The Running Event,” says Sullivan. “They have great resources and people and understand the important role the event plays in the running community. The Running Event is in great hands with Diversified.” Formula 4 Media launched The Running Event in 2006. It is now the leading event in the industry, hosting 255 exhibitors and more than 2500 total attendees in 2017. Diversified Communications will produce the 13th edition, which will be held November 27-30, 2018 in Austin, TX. n © 2018 Diversified Communications

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RUNNING INSIGHT

The Power of Local Retail July is Independent Retailer Month, so get ready to take advantage of the attention. / By Daniel P. Smith

very November, thousands of independent merchants across the U.S., including a host of specialty run shops, participate in Small Business Saturday, the now-ubiquitous shopping holiday that follows Black Friday and encourages spending at community-based operations. But another Shop Local movement – Independent Retailer Month – is eager to gain mainstream traction and underscore the importance of the nation’s local retailers. Running throughout July, Independent Retailer Month will provide local merchants a platform to highlight their positive social and economic impact while also pushing consumers to shop at independent retailers.

Independent Retailer Month has the support of Running Industry Association executive director Terry Schalow, who urges running retailers to participate in the monthlong campaign and make use of its resources. “We’re always encouraging running shops to reach out into their communities and create stronger connections with their customers, fellow small businesses and local government,” Schalow says. “Independent Retailer Month is another avenue to do just that and to create the type of awareness that can spark real benefits.” Celebrating Indie Retail

Independent Retailer Month is the result of two indie retail-sparked movements: a

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RUNNING INSIGHT Independent Retailer Month (continued) National Independent Retailer Week created in 2003 by Profits Plus principal Tom Shay to help retailers create unique celebrations in their own communities; and Independent Retail Week, which Kerry Bannigan, cofounder of New York City-based fashion events production company Nolcha, launched in 2009 to drive business into independent fashion stores in New York, Chicago, Philadelphia and New Jersey. In 2011, Shay and Bannigan connected and began discussing a more inclusive joint venture around the concept. Those conversations gave birth to the first Independent Retailer Month in July 2011 and its mission to highlight the important role local merchants play in their individuals communities, in the local and national economy and in the overall retail landscape. “We want individuals … to see how an independent retailer is a great place to shop for many reasons — the different selection, the local and personal touch [and] all the

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Six practical ways to get involved 1. Generate power in numbers: Team up with complementary small businesses such as massage therapists, fitness studios or healthy cafés to host a local fit-and-healthy event. 2. Bounce backs: Encourage repeat business – and the economic development it brings to the community – and provide customers a bounce-back coupon for items purchased beyond July. 3. Wear it: From T-shirts to pins, have staff champion the “proud to be independent” message. 4. Make a game of it: Involve other local businesses in a scavenger hunt or shopping crawl that showcases the breadth and depth of the town or neighborhood’s indie businesses. 5. Celebrate community ties: Earmark a portion of proceeds of every sale to a local charity and communicate the store’s deep philanthropic ties to the community. 6. Be an advocate: Volunteer to speak to a local government or civic agency about the economic benefits of shopping local.

RUNNING INSIGHT

Independent Retailer Month (continued) “We want individuals … to see how an independent retailer is a great place to shop for many reasons — the different selection, the local and personal touch [and] all the financial reasons that benefit the community.” KERRY BANNIGAN, NOLCHA

Kerry Bannigan, co-founder of Nolcha

Dollars and Cents: Why small businesses matter • According to a report from South Dakota Rural Enterprise, a dollar spent at an independent retailer is usually spent six to 15 times in the community before heading out of town. Just $1 can create $5-$14 of value in the immediate area. • For every dollar spent at a big-box retailer, only six cents stays in the area, the Indiana Main Street Program reports. • The Institute for Local Self-Reliance found that every $100 spent at a local independent business generated $45 of secondary local spending, more than triple the amount when $100 is spent at a big-box store. • According to the Andersonville Study of Retail Economics, local business generates 70 percent more local economic activity per square foot than big-box retailers.

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financial reasons that benefit the community,” Bannigan says. Noting that independent retailers “give much more to the community than any chain store, [big-box] store or mass merchant,” Bannigan says Independent Retailer Month celebrates the “awesome people” that make up independent retail. “Owning a business says more than, ‘I like this town.’ It says, ‘I am investing my money in this community because I believe in it and I want to help it.’” And July is a particularly powerful month for such an initiative, Schalow contends. Not only is July far away from the looming shadow of the holidays, but it is also a month in which people are more apt to pursue fitness-related activities such as walking, fun runs and local road races. “Shopping isn’t always about the holidays and July is a great time to showcase a running store and all that it does,” he says. Getting Involved

The Independent Retailer Month website (www.indieretailermonth.com) features a litany of resources for run shops to get involved with the campaign: • Ready-to-use statistics identifying the benefit of spending at local merchants • Professional posters, postcards and

Profits Plus principal Tom Shay

in-store graphics • Templates for city and state proclamations for Independent Retailer Month • Ideas on how to engage with local partners such as chambers, local officials and the media. • The website also hosts an “activity idea bank” sharing practical events a retail store might host as well as how shops might promote Independent Retailer Month in their communities. “Independent Retailer Month offers a lot of plug-and-play tools and you can use as little or as much as you want,” Schalow says. “Like running stores, we don’t have all the resources in the world at the RIA, so partnering with other like-minded efforts and sharing resources is a great way to achieve mutual goals and help retailers build a much bigger toolkit.” To make the most of their involvement in Independent Retailer Month, Bannigan and Shay suggest retailers “plan early” to tell the story of their independent business in the community. “It is to the advantage of people in the community to do business with an independent [and for the business to highlight] the personal and financial benefits the independent business brings to the community,” Bannigan says. n

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RUNNING INSIGHT

Running Warehouse Makes Two Moves Web retailer acquires RunningShoes.com and plans significant apparel expansion.

unning Warehouse is making moves. In the past two months, the California-based web retailer has acquired the web address RunningShoes.com from Cat5 Commerce, while also hiring an experienced buyer to spearhead growth in the apparel category. It also recently opened a distribution center in Alpharetta that should reduce its costs and improve its shipping times. “We expect the industry to have a great year and want to capitalize on that,” says Running Warehouse owner Joe Rubio. “This is a great time to be selling running shoes.” The www.runningshoes.com acquisition includes the URL, the customer list and mailing list. Rubio says he had been in discussions with Cat5 Commerce, the previous owners, for a while before closing the deal on May 9. Currently the runningshoes.com URL points to the Running Warehouse website, but eventually Rubio sees the new site as an opportunity to reach new consumers and offer an increased educational opportunity to shoppers. “We see that URL as attracting beginning runners as opposed to the more experienced runners who shop Running Warehouse,” Rubio tells Running Insight. “Our goal is to attract those beginners, offer a great experience and back it up with outstanding customer service.” Part of the enhanced experience that Rubio wants his sites to offer will include an expanded apparel assortment. Running Warehouse recently hired Linda Sparling, a 28-year veteran of the run apparel business who had spent most of her career at Front Runners in Los Angeles before it was acquired by Surefoot several years ago. “Linda is very experienced and has strong opinions on the apparel category,” Rubio says. “We see this as a growth category and Linda can help us a great deal.” Like most run retailers, Running Warehouse has focused on “performanceoriented” apparel, Rubio says. “We’re not 14

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“We’re not moving into athleisure apparel, but what I call ‘run Leisure.’ We see this as an opportunity, especially with other retailers getting out of the apparel business.” JOE RUBIO RUNNING WAREHOUSE

Joe Rubio

moving into athleisure apparel, but what I call “run Leisure.’” The new mix will include hoodies from California-brand Rabbit as well as expanded assortments from brands such as Arcteryx, Patagonia, Oiselle and Janji. And Rubio says the sites will continue to carry performance pieces from brands traditional run brands including ASICS, Nike, New Balance and Saucony. Apparel accounts for about 15 percent of RW’s current sales, Rubio says. “We see this as an opportunity, especially with other retailers getting out of the apparel business,” he says. Two months ago, Running Warehouse opened a 160,000-square-foot distribution facility in Alpharetta, outside of Atlanta. Rubio says the facility will handle shipping for both Running Warehouse and its sister business, Tennis Warehouse. Previously, RW had handled all shipments out of its warehouse at its headquarters in San Luis Obispo, CA. Rubio says the new facility will reduce the company’s shipping cost and also allow it to improve shipping times. Founded in 2005, Running Warehouse also has distribution centers in Schutterwald, Germany, and Perth, Australia. n

RUNNING INSIGHT

The Incredible Shrinking Running Store For many running stores, bigger most definitely is not always better. / By Daniel P. Smith

ane Alred had enough, so she simply moved on. Last fall, Alred, co-owner of the 1st Place Sports chain of run specialty shops based in Jacksonville, FL, moved her Town Center store – the second highest volume store in her six-store enterprise – from a 3200-squarefoot space in a popular shopping district into a 2500-square-foot storefront one mile away. “It was time to go and we were ready to get out,” Alred says. The new Tapestry Park store’s monthly rent is approximately one-third the $15,000 Alred was paying in her Town Center location. Though downsizing by 700-square feet forced Alred to tighten her inventory and revenue has dropped “a bit” in the move, Alred believes inhabiting a smaller store and, more importantly, facing less overhead positions 1st Place Sports for long-term success. “For a while, everybody in run specialty thought bigger was better and we all needed more space,” Alred says. “My sense of things is that people are starting to pull back in the name of a more sustainable business.” The Downsizing Trend

Indeed, the bigger-is-better philosophy that reigned across the retail landscape for so long, including in run specialty, is beginning to shift. From supermarkets to big-box chains, First Data head of information and analytics solutions Glenn Fodor says many retail operations are pushing toward smaller footprints. Though tighter spaces ignite tough inventory decisions, Fodor says the reduced costs such smaller spaces often bring also deliver a new sense of flexibility and, in many cases, lower costs with higher revenue per square foot.

With the goal of running a more sustainable run specialty business, 1st Place Sports is learning that “smaller-is-better” means tough inventory decisions, but also more flexibility and lower operating costs.

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RUNNING INSIGHT

Shrinking Running Store (continued) “There’s a whole bunch of evolution going on in retail and shrinking stores is one part of it,” Fodor confirms. Some retailers, like Alred, are moving an existing store into a smaller space while others, like Fleet Feet Sports, are investigating smaller footprints for new shops. “Throughout the 2000s, run stores were getting bigger and bigger and it felt natural,” Fleet Feet Sports VP–operations Ben Cooke says. “With the downturn, though, stores have had to be a lot smarter.” Five years ago, Cooke says Fleet Feet wouldn’t have opened a store under 2500square feet. This summer, however, the North Carolina-based company will open a 1300-square-foot store in Austin’s Seaholm

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Power Plant District. The Austin store will ditch apparel and eliminate roomy back offices and fitting rooms. At the same time, Cooke says the store’s footwear SKU count will grow from the typical 110 to about 170. He promises a more dynamic story around footwear, including a more lively presentation, as well as added attention to Fleet Feet’s fit id 3D scanning system.

“It’s really an expenses versus sales issue. If a smaller footprint makes sense, it’s something we’re going to explore.” JANE ALRED, 1ST PLACE SPORTS

The Benefits of Being Smaller

“Oftentimes with bigger stores, you have to fill it to make it look right. With this Austin model, we’re basically reassigning dollars elsewhere,” Cooke says, adding that the smaller space has demanded a more

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RUNNING INSIGHT

Shrinking Running Store (continued)

The smaller Fleet Feet footprint is characteristic of what is happening elsewhere in specialty retail.

disciplined, creative approach. The obvious benefit to a smaller footprint is lower rent and buildout costs, but Cooke believes the potential benefits can run deeper. If proven successful, smaller footprint stores can help Fleet Feet be more nimble for today’s consumers, whether they’re shopping on Fleet Feet’s e-commerce channel or in one of its brick-and-mortar stores. If successful, the smaller footprint model could also help Fleet Feet penetrate more premium real estate locations across the U.S. “We don’t feel it’s as risky a bet as it would seem, but we’ll find out how the consumer 20

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reacts to this,” Cooke says. Fodor says moves like Fleet Feet’s are characteristic of what’s happening elsewhere in retail, especially amid wildly shifting consumer habits and the ongoing battle with e-commerce and delivery. Though finances might drive many downsizing decisions, the desire to deliver a more customized, tailored and thoughtful experience to consumers also looms large. Looking Ahead

“Retailers need to attract customers to their stores and a more intimate experience

is one way to accomplish that,” Fodor says. There are, of course, challenges to going small. Running shops are accustomed to hosting packet pickups, team nights and regular group runs and a smaller space can prove limiting. A reduced footprint also forces retailers to pick and choose their inventory battles. “Getting the inventory mix right is the prime challenge when you move into a smaller store,” Fodor says. “You can’t be everything to everybody, so that forces you to focus on your customer and give people exactly what they want.” Still, Fodor doesn’t see that challenge alone trumping the prospective benefits of a smaller storefront. Retailers, he notes, are paying more attention than ever before to data and efficiency, while real estate remains costly in many markets despite abundant supply. “I think everyone’s looking to be more efficient,” Fodor says, “and going to smaller footprints is part of this.” Fleet Feet’s Cooke expects the downsizing trend to “absolutely continue throughout retail.” Today, he says he’d be hard-pressed to recommend anything over 2000-square feet and adds that Fleet Feet corporate is challenging its entire system to consider how they might be able to do something fresh in a smaller footprint. To wit, the Fleet Feet outlet in Spokane, WA, is testing a coffee shop in its unit. “Now that’s not our model,” Cooke says of the Spokane unit. “But we are exploring how we can repurpose existing square footage if that’s what we have to work with and that includes co-tenancy that seems natural and organic.” Back in Jacksonville, Alred says she might not be done moving select 1st Place Sports units to smaller locations. Though the new Tapestry Park store has recorded lower sales than its Town Center predecessor, Alred has absorbed the dip thanks to reduced expenses. In particular, she wonders if her St. Augustine store couldn’t capture similar benefits by downsizing. “It’s really an expenses versus sales issue,” she says. “If a smaller footprint makes sense, it’s something we’re going to explore.” n © 2018 Diversified Communications

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RUNNING INSIGHT

Running Shorts Fleet Feet Adds Two Locations

leet Feet made a series of moves earlier this month to strengthen its position in a pair of key markets. In the first, Fleet Feet acquired Capital City Runners, a former running retailer located in Tallahassee, FL, out of bankruptcy. Tyler Perkins, an experienced running retail manager, operates the store, which opened May 4. Perkins, a former naval flight engineer and former sheriff’s deputy, previously worked alongside his parents, Edgar and Carolyn Perkins, in the Fleet Feet location in Stuart, FL, that they have operated since 2013. “I’m thrilled to follow in their footsteps,” says Perkins. “The running community can expect a lot of amazing resources, a topnotch staff and personalized services and

solutions, including access to fit id, Fleet Feet’s exclusive 3D foot scanning system.” Perkins spent one year in Fleet Feet’s Leadership Development Program, an initiative that identifies, trains and prepares existing Fleet Feet staff nationwide for future leadership and ownership opportunities. Before enrolling in the program, Perkins spent one year working at the Fleet Feet in Chicago. In the fall, Fleet Feet will move to a permanent location, also located in Miracle Plaza, that will reflect the layout and design of other Fleet Feet locations opened in the past two years. While Capital City Runners had a second location on Bannerman Road in Tallahassee, Fleet Feet has no plans to open or re-open a second location.

With the opening of its Tallahassee location, Fleet Feet now has of seven locations in Florida — one each in Delray Beach, Fort Myers, Sarasota and Stuart and two locations in Orlando. Also earlier this month, Fleet announced that Geaux Run, located in Lafayette, LA, will partner with Fleet Feet as a franchise location. Current co-owners Mary Hays, Mark Miller and Donald Cleveland remain onboard and will continue to own the store, with Hays continuing to oversee and manage all day-to-day operations of the business. “We’re always thrilled when there’s an opportunity to partner with a store that shares our commitment to building and supporting running communities and that’s

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RUNNING INSIGHT

Running Shorts (continued) exactly what’s happened here with Geaux Run,” says Robyn Goby, VP–development at Fleet Feet. “Mary exudes passion and energy and I’m excited Fleet Feet can support her commitment to the Lafayette running community and bring her the resources and power of a national brand.” A native of Lafayette, Hays has co-owned the store since 2016. She first began working there as a manager in 2013. An accomplished triathlete, Hays currently oversees a staff of six part-time employees.

MBT Readies Running Launch MBT, the footwear brand known for its rocker midsole that it says propels runners and walkers forward like a “Masai Barefoot Warrior,” has introduced a performance running series. While still offering MBT’s podiatric benefits and rocker midsole, the Speed 2 and Speed Mix are high-performance racing and training shoes designed for runners looking for shoes that combine lightweight design with ultimate ground feel. The company says the rocker outsole is subtle yet effective, promoting a natural gate with improved efficiency in the toe-off, while the outsole

is considerable more cushy and flexible, reminiscent of the most popular racing shoes on the market today. The shoes weigh less than eight ounces and feature a 2mm drop and a 32mm heel stack. The Speed series shoes retail for $130. The ZEE 18 is a cushioning shoe with maximum support. It features a high-profile midsole and a strong support features. MBT says the ZEE line is best for bigger runners and walkers who need the highest levels of support and rocker. These shoes weigh 12.9 ounces and have a 4 mm drop and a 47 mm heel stack. Retail price is $175. MBT says the GT18 strikes a balance between the maximum support of the ZEE 18 and minimalist speed and suppleness of the Speed line. It features a noticeable rocker with lighter weight construction and increased flexibility. The shoe weighs 12.3 ounces, has a 5 mm drop and a heel stack of 41 mm. The GT18 retails for $165. All MBT running shoes feature proprietary SensorTechnology — soft polyurethanebased material between the midsole and outsole. This is combined with a modified running “rocker” construction, a minimal support plate, and the PivotStrike midfoot MBT’s running shoe line incorporates its well-known rocker technology.

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Sneakers4Funds Debuts

Wayne Elsey, the founder of Soles 4 Souls, has created a new organization, Sneakers4Funds, that allows retailers to collect slightly used athletic footwear and receive in return payments for local charities they support. The organization provides retailers with a starter kit, which includes display boxes to collect gently worn, used and new athletic shoes; 52 pre-paid shipping bags so retailers can make weekly shipments to the fundraising group; and an idea sheet on promotions for the collection. “This is a great way for retailers to give back to their local communities and specifically to charitable groups they work with,” Elsey says. After collecting the shoe shipments from retailers, Sneakers4Funds sends the retailer a check payable to a local charity of its choice. In addition to supporting the charity, the Sneakers4Funds program allows retailers to run a “feel-good, engaging promotion for its store, offer trade-in incentives and create positive public relations in their local communities,” Elsey says. Retailers can learn more by e-mailing: asap@sneakers4funds.com or visiting: www.Sneakers4Funds.com. © 2018 Diversified Communications

RUNNING INSIGHT

Running Shorts (continued) SOLE Puts a Cork In It What do 75 million wine corks have to do with footwear? The recycled wine stoppers, collected by North America’s biggest cork recycler, are coming back to life in SOLE’s line of flips that is targeting outdoor, surf, better footwear and running stores. SOLE is known for its pain reduction and orthopedic health footwear and insoles with the distinctive supportive shape in its products. In this new footwear collection, SOLE says it is putting this same support in modern, low-profile sandals, some made with 100 percent recycled wine corks. The signature supportive shape molds to feet and is proven to improve balance, posture and stability while reducing strain and preventing injury. Design features include a metatarsal pad for an added level of forefoot support and increased toe circulation, a deep heel cup that prevents overpronation and a sturdy, supportive arch that prevents successive arch strain. The collection includess Beach Flips, which feature the recycled cork footbeds and will retail at $60; Casual Flips, a splashresistant sandal featuring a canvas upper and firm footbed made of recycled wine corks; and Sports Flips, a water-friendly design that features a wear-moldable EVA footbed, dynamic metatarsal support and cushioned synthetic straps with a polyester liner. n

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