The Performance Running Market Is Booming: How Brooks, On and Hoka One One Are Winning With Three Distinct Strategies

Peter Verry
·8 min read

The running category is helping fuel a resurgence in performance sales — and three key brands are at the center of the action.

“I foresee running making a huge comeback as a fitness activity, and ultimately spilling over to the fashion market. Brooks is certainly a major player in performance running, and Hoka One One and On have shown themselves to be really strong newcomers in the space. These three are leading the charge here,” explained Matt Powell, senior sports industry adviser with The NPD Group Inc.

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Last year, all three companies experienced their share of wins amid an uncertain economic landscape. For instance, Brooks gained ground in the crucial women’s running category, Hoka One One continued to be a top earner for Deckers Outdoor Corp. through retail expansion and On further bolstered its brick-and-mortar footprint stateside through a new flagship and partnerships with influential retailers.

As for product, although the three brand compete in the same market, Powell believes each has carved out its own lane — which could force their fiercest competitors such as Nike and others to rethink their strategy.

“Each brand presents a different challenge to the overall market, and not every other brand [in the market] can compete with all three,” Powell said. “They may have to pick a lane and say, ‘We’re going to get after women’ or ‘We’re going to offer solutions to the consumer’ or ‘We’re going to come out in a unique way.'”

Here, more on how Brooks, Hoka One One and On are tackling the running footwear market in their own unique ways.

Brooks

The Seattle-based company revealed late last week that that it ended the year with about $850 million in overall revenue, an increase of 27% from 2019. Brooks attributed much of its success to online sales (up 75% as brick-and-mortar retail closures ramped up, leveling off to 46% by year’s end), effective communication with runners and the ability to ramp up production to meet consumer demand.

However, Powell believes that the success is primarily driven by its ability to win over women.

“[Brooks is] focused on the female consumer, they realize the opportunity there,” Powell told FN. “And as many of the performance running brands that are in run specialty know, the women’s business in the channel is equal to or greater than the men’s business. [Brooks has] had a lot of experience about building her up, and it’s paying off for them now.”

Brooks’ attention to women runners, according to Powell, could lead to the brand overtaking Nike as the No. 1 women’s performance running shoe brand. He stated Brooks was positioned at No. 2 last year in the category with sales up about a third, while the Swoosh experienced a sales decline of roughly 20%.

The brand’s retail partners said the brand’s attention on fit — and its emphasis on women — are both big advantages.

“Bottom line with Brooks, they just fit well, and that’s for men and women. Many years ago, they started making shoes that were just as comfortable the moment you put your foot into them in the store as they were at mile 100,” Genie Beaver, owner of West Stride in Atlanta, told FN. “And amazingly enough, we sold the same shoe to the woman who walks 25 miles a week in the pandemic and the woman who runs 80 miles a week training.”

She continued, “They’ve also done a great job just with colors and style. Generally speaking, the shoes look good and they appeal to a broad base of women. Between the fact that they look good, they feel good and they’ve got options that are just over $100 so they’re not the most expensive brand on the wall, there’s not much reason for it not to be No. 1.”

Beaver also noted that some of Nike’s recent shoes have a stronger focus on the pinnacle runner, whereas Brooks has offered more for the casual or less serious runner.

Heartbreak Hill Running Co. co-owner Justin Burdon — who has stores in Massachusetts and Chicago — said that Brooks is a consistent top-two performer at his store, often swapping positions with Nike, and is purchased by both men and women. He explained that customers buy Brooks when they need a daily go-to training style that he described as a “workhorse” shoe, and said lots of new runners get into the brand because their friends are happy wearing Brooks.

Burdon said Brooks customers come in mostly for the Adrenaline and Ghost franchises, and tend to spend around $130 for a pair.

“Brooks has been ingrained in the running community for years, so there’s certainly a loyalty factor. And they just make really good shoes,” Burdon said. “Their technology has improved over the years, and their shoes year after year tend to be great. You don’t really see anyone moving away from Brooks. The brand does a great job focusing in on that core runner and serving that community.”

On

Although “disruption” has become an industry buzzword and over the years has lost some weight, Swiss running brand On has truly shaken things up since its debut in 2010.

“On is really coming into the space and breaking the rules about where you need to distribute your product, how many categories you can be in,” Powell said. “They are really coming out this much differently than the traditional athletic brand would come out.”

The company spent much of 2020 expanding its retail footprint, opening its 1,630 square-foot New York City flagship in the NoHo neighborhood on Lafayette Street in December, months after announcing a partnership with retailer Fred Segal for a new consumer experience at Fred Segal Sunset in Los Angeles.

However, its most notable product launch was in April with the Cloudnova, a fashion-focused model that deviated from its roots in performance run and outdoor for the first time. “Performance used to borrow from fashion; now fashion borrows from performance,” On co-founder David Allemann said.

Although the Cloudnova marks On’s official entry into lifestyle, the brand’s retail partners said its other looks already made inroads with the casual sneaker consumer.

“Their technology is a bit different. It’s a bit of a more flexible shoe, it’s lower to the ground, it has good ground feel. Our folks use it for running but also cross over to athleisure or a kind of casual shoe,” said Heartbreak Hill Running’s Burdon. “It has a clean, sleek look that people are attracted to, and you can use it for running or fitness or walking for casual wear. It serves that market niche market really well.”

The retailer said people who buy On are looking for a shoe able to take on multiple purposes, and are shoppers in their 30s and 40s. The younger On consumer, according to Burdon, is buying the brand to use for track running sessions given its light weight.

Leading styles at the store are the Cloudflyer, the Cloudflow and the Cloud X, and customers are spending in the $140 to $150 range.

And the brand’s fashion appeal is evident in the south too.

Stephanie Jacob, footwear buyer and GM at West Stride, said sales of On have doubled since 2018 and that the brand’s looks have resonated with the aesthetics-driven customers in Atlanta.

“On is a fashion play. You see them everywhere, it’s very fashionable,” Jacob said. “We do carry the more performance-minded ones, but in general people buy On for the fashion athleisure, gym and back in a shoe that looks good type of consumer.”

Hoka One One

As people continued to work — and workout — from home, Hoka One One proved to be a big driver in for Deckers Outdoor Corp. in Q3, with sales climbing whopping 52.1% to $141.6 million. And market watchers don’t believe this momentum will slow down any time soon. So much so that financial services firm BTIG revealed in a note last week that it believes the brand could eclipse $550 million in sales by fiscal year 2022.

Powell believes much of Hoka’s success is thanks to the problem solving it brings the running market.

“The product really provides a significant benefit to the consumer that no other brand has addressed as completely,” Powell said. “People tell me that they can run in Hoka and their knee doesn’t hurt any more, their hip doesn’t hurt anymore. Those are really important benefits for runners.”

Because of this, Jacob said Hoka — which has doubled in sales at West Stride since 2018 — is the brand that the store’s staff often looks to when people ask about managing injuries.

“If you’re in any kind of pain, Hoka is an immediate brand that people come in for. It’s the one we introduce people to whenever someone says, ‘I want cushion because my knees hurt’ or ‘I don’t run anymore because my knees hurt, my shins hurt. That makes Hoka an immediate pull,” Jacob said.

With recent releases — specifically the race-ready Carbon X line with carbon-fiber plate — Jacob has seen younger consumers seeking out the brand.

“They’re getting a little bit more performance minded with their carbon-plate offerings, and high schoolers are now wearing some of the performance models,” Jacob said. “We have seen people who are typically training in Nike [now buying Hoka] because these are actual training shoes you can perform in.”

And Hoka should expect this youthful trend to continue. In last week’s note, BTIG cited Hoka’s expansion into more Dick’s Sporting Goods stores this spring after a successful test with the retail giant last year, which it stated would put it in front of more people, as well as a younger demographic.

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