February 12, 2008

  Bob on the Times
    By Bob Francis, Owner
    soundRUNNER




It’s all the news that’s fit to print. So Julie and I were gratified to be considered fit when, on February 7, 2008, soundRUNNER was prominently featured in an article on competition in the specialty running channel of distribution. As the runners know who were interviewed, photographed, and ultimately featured in the story, the Times is as thorough as it is careful. Of the three photographs accompanying the story, all taken at soundRUNNER, hundreds more are on the equivalent of the digital cutting room floor across the country. The comments of Sarah Vaughan, John Febbraio, and Jerry Turk were featured along side those of Gary Muhrcke, Tom Raynor, and Mike Gotfredson, all major players in the industry. Jan Spiegel, the reporter with the “by” line, interviewed dozens of people across the country. In the Times, every word is carefully chosen, every comment contributing a perspective on the central theme. Runners associated with soundRUNNER pierced to the core of the issues of community, service, price, and selection.

The gist of the article is that the specialty running channel, represented across the country by about 700 “doors,” as they say in the trade, has been very successful—so successful that the big dogs are coming. As Cabella’s is to outfitting, Road Runner Sports will be to running. It’s not that there aren’t already some big dogs in the pound: Sports Authority, Dick’s, Olympia Sports, and other big boxes and chains sell the flagship products from the major brands, applying the same marketing and sales techniques as the Road Runner catalog, such as loss leaders, to get people in the store. What do you pay for a Brooks Adrenaline 8 in those stores on any given day? Answer: $95.00 or maybe $94.95. Manufacturer’s Suggested Retail Price (MSRP). The same price you pay in soundRUNNER.

Do the big box stores sponsor any races on the Shoreline? Are they associated with the charities and foundations benefitting from the sponsorships? Do their people serve on the Board at the Library, give talks at the Middle School, conduct running camps for youth, sit on the town’s Economic Development Committee, speak at health fairs, go to the funeral service of a beloved local runner, support other local businesses in town? These questions are, of course, rhetorical. The big boxes and the chains have not displaced specialty stores for the reasons Jim Weber, the C.E.O. of Brooks, cites. Brand growth is driven by the specialty channel. The traditional big box store has not yet and is not likely to displace the specialty retailer.

How about catalogs and the internet? First, there is the issue of price. I went to three websites, two of which were named in the story. Zappos appears to be a fine provider of all kinds of shoes, including dress and casual. They are selling 2120s for $78.95. soundRUNNER is selling the same shoe on eBay for $59.95. Here are Zappo’s prices for current model performance running shoes: 2130–$98.95, Nirvana 4–$138.95, NB 768–$98.95, Hurricane 10–$133.95, Nimbus 9–$123.95, Kayano–$138.95. soundRUNNER sells all of these shoes at MSRP, several dollars below Zappos. Sierra Trading Post, also named in the story and an excellent provider of hard and soft goods for the outdoor market, carries trail shoes, few of which we carry at soundRUNNER. The Vasque Amp, recently discontinued, is discounted to $49.95. Sierra does not carry hybrids, nor do they carry either the Inov8 or Solomon brand. Sierra does not sell the Montrail Continental Divide. So we don’t appear to be in the same industry. I also checked Road Runner Sports on-line, which generally sells current models at MSRP. This limited survey supports what more exhaustive studies consistently conclude: that shopping on-line is not, in fact, less expensive than shopping in a physical location. It offers convenience, for which the seller is compensated.

Readers need to know that manufacturers of flagship performance running models work hard to protect the integrity of their distribution by making it difficult for sellers to dump product at low prices. Asics, for example, has a Uniform Minimum Advertized Price (UMAP) policy, which is imposed unilaterally on sellers, much to the pleasure of soundRUNNER and other specialty stores, inflicting severe penalties on violators. Asics has demonstrated that it will sacrifice significant revenues to uphold the policy. The business reason? To protect the specialty channel, where the brand is built. It is no secret within the industry that Asics, Brooks, and Mizuno are expanding market share at the expense of other brands, precisely because they emphasize the grass roots.

Selection is a function of competition, store size, and demand. Certain brands are simply not available to soundRUNNER. We cannot, for example, carry Merrell trail shoes in Branford because other stores in town already carry the brand, irrespective of whether they carry the shoes that interest us. With 2500 square feet of selling space in each location, soundRUNNER stores are large by comparison to the average specialty running store, but not nearly as large as the 8500 square foot stores Road Runner Sports apparently is building. We will have larger stores if they are available on Main Street in buildings with the character and feel we seek. But we will not sacrifice the sense of place, the joy of belonging to a community, and certainly not the earthly delight of being next to a coffee shop simply to have a bigger store. Finally, there has to be demand. An immutable rule of life applies to specialty running: 80% of our sales come from 20% of our products. We will seek constantly to expand selection, but only of products which sell enough so we can keep only the most current model. soundRUNNER will not sell old goods at full price on the main floor.

The Times may be right. The competition may be gaining. soundRUNNER doesn’t mind competition. We have competition all around us. The consumer wins from competition. So bring it on. Specialty running may be graying, as the article suggests, but this old runner has some kick left.

Archive of Bob’s Lane

Issue 1: May 1, 2007: Bob on the Bash
Issue 2: May 10, 2007: Bob on Dave Parcells
Issue 3: May 24, 2007: Bob on the Branford Road Race
Issue 4: June 1, 2007: Bob on Being Green
Issue 5: June 15, 2007: Bob from the Left Coast
Issue 6: June 23, 2007: When Pain is Leisure
Issue 7: July 6, 2007: At Seventeen
Issue 8: July 13, 2007: Bob on Cities
Issue 9: July 30, 2007: Bob on Mike
Issue 10: August 8, 2007: Bob on Nature: Nature on Endurance Running
Issue 11: August 17, 2007: Bob on What I Like
Issue 12: August 24, 2007: Bob on Running Older
Issue 13: August 31, 2007: Bob on Runners in the Raw
Issue 14: September 9, 2007: Bob on Exercise and Adult Neurogenesis—Say What?