Specialty Running Stores Sell More Than Just Shoes

And I’m dazed, talking to shoeboxes within the dimly lit aisles of the stockroom. For five hours, with little more than a breath between customers, I’ve been selling product in the way of modern specialty running stores: through a demanding fit analysis accompanied by intense Q-and-A sessions.

It’s my second month on the job in my return to the shoe-store business after 20 years. I had spent the first half of the 1990s working at Hoy’s Sports in San Francisco, then considered one of the best specialty running stores in the country (by this magazine, as a matter of fact). Hoy’s was staffed by competitive runners and catered primarily to the local racing community. The core business was selling training shoes,racing flats, and track spikes, but the store was also a community hub. It sponsored the Impalas (a top all-women team), the Hoy’s Racing Teams, the Golden Gate Triathlon Club, and even the intriguing cast of mega-mileage characters that made up the Haight-Ashbury Ultra Society. Every tribe of runners in San Francisco seemed to pass through its doors to buy shoes, chill out, and talk running.

I left Hoy’s in 1996 after taking a job at Triathlete magazine, right around the time the world wide web was starting to hum. I’ve taken this position at Fleet Feet Menlo Park to investigate how the world of specialty running stores is faring in the internet age, when you can buy almost everything (including shoes) cheaper both online and at your local Walmart, Kmart, or Target.

This is what I found out: Specialty running retail isn’t dying. Not even close. In fact, it’s flourishing. The first thing I noticed on the sales floor was how dramatically different the job is than it was two decades ago. Where’s the hanging out? In my two months at Fleet Feet Menlo Park, there was little downtime. I had been forewarned about this change when I interviewed for the job. A team leader, Joe Tomkins, suggested my sales experience might actually be a problem.

“Are you okay with letting that go?” he asked. I was not prepared for how much I would have to give to a $12-per-hour job. There would be no relying on the fact that I had five years of experience back in the ‘90s. I went through an exacting training process, particularly with the fitting techniques, and spent my first week being shadowed and evaluated by the veterans of the store.

Why? Because a lot is at stake—way more than back in my days at Hoy’s. Between 1999 and 2014, running-shoe sales doubled in the U.S., according to the National Sporting Goods Association. Customers spent $3.1 billion on running shoes in 2014, up from $1.5 billion in 1999.

Back then, specialty running retail (defined as a brick-and-mortar establishment devoted to running) owned 4.4 percent of the total shoe market. At the time, most running shoes—30.3 percent—were bought at “specialty athletic footwear stores” (e.g., Foot Locker, Athletic Attic) that sold running shoes as well as basketball shoes, tennis shoes, and so on. Internet sales were a meager 1.6 percent. But by 2014, internet sales accounted for one-fifth of the market (20.3 percent), with general sporting goods stores (e.g., Dick’s Sporting Goods, Sports Authority) leading the various categories with 21.3 percent. Sales at specialty athletic footwear stores had fallen to 18.9 percent.

Throughout it all, however, specialty running retail stores managed to hold relatively steady at 4.2 percent, down only .2 percent from 1999, before internet commerce became widespread. What is different today is how much cash that 4.2 percent represents. Essentially, the local running-shoe store has about the same slice of a pie that is now twice as big as it was in 1999.

Hoy’s went out of business by 2003. Location certainly played a role. It was difficult to get to from outside of the city, and parking was a pain.

Convenience wasn’t the only factor, however. At the store one day in 2003, I bore witness to what has been coined “showrooming”—a customer coming in, trying on shoes, availing themselves of the staff’s expertise, then ultimately leaving and buying online.

Today’s savvy specialty-running retailer has met that challenge head-on, adapting with a variety of techniques focused on customer service and a sense of community, including knowledgeable yet relatable staffs that roll out the red carpet for walkers, joggers, runners, and racers alike. At Fleet Feet Menlo Park, for example, the first third of the store is a display created and managed with the help of a Nike merchandiser, a young, bouncy type who I imagine could breeze her way to a win on Project Runway. Once a month she bounds in, freshens up the offerings, and tunes up the overall look.

The Fleet Feet staff includes some speedy runners, such as Carlos Siquerios, 34, a 2:30 marathoner, and Jeremy Judge, 28, who last year clocked 1:17:07 in the Rock ‘n’ Roll San Jose Half Marathon. As a group, however, it is more friendly than fast. It’s the same story at Fleet Feet Sports Minneapolis, which owner John Long has been running for almost 20 years. “If our store had stayed the way it used to be, it would no longer exist,” says Long. “Years ago, if you asked the wrong question at a specialty store, you’d get a sneer. Ninety percent of the staff at those old stores was either good track guys or shoe nerds.”

John Rogers worked as an executive at Reebok and Mizuno for more than 20 years before opening Maine Running Company in 2005. He still owns and operates Fleet Feet Sports Maine Running in Portland, and was elected to the Running Specialty Hall of Fame in 2014. Back in the ‘70s, Rogers says, there were only a handful of proprietors in specialty running. They were hobbyists, more or less. The stores were centers for serious runners and only focused on a few technical running footwear brands. “If you have that focus today, you’re going to go out of business,” says Rogers. “You just don’t know it yet.”

“Just throwing shoes on a table, putting apparel anywhere on the floor, and not paying attention to accessory sales doesn’t work and hasn’t for a long time,” Rogers adds. “Consumer buying habits are changing rapidly, and employee training, community involvement, and in-store experience drive success today.”

At the Naperville Running Company in Illinois, owner Kris Hartner requires new employees to go through 80 hours of training, including 20 hours shadowing a manager in the fitting process, 40 assisting a manager with fittings, and 20 helping customers while supervised. Only then does he spring them on customers by themselves. And he could not care less about their PR's.

“They may not be great runners, but they’re great with people,” says Hartner. Betsy Hughes has also watched the industry evolve. She and her husband bought full ownership of the Track Shack in Orlando in 1983, but in 1978 she worked there part-time, biking to the store after her high school track practice. Entire shifts would float by without a single sale or customer.

“I used to buy a pair of socks just to show a purchase and have a reason to write a daily report,” says Hughes. No longer. On a slow day, she has up to eight people selling shoes at a brisk pace. “On a busy day or on Saturdays,” says Hughes, “it’s nearly double that.”

One customer I served at Fleet Feet Menlo Park had gone through the fitting process and settled on a Nike LunarGlide. This took about 40 minutes of measuring, talking, and trial and error. He loved the shoe but not the color in stock. “They have a custom color option,” he said of nike.com, walking out of the store empty-handed.

Such stories can trigger a stump speech from Parker Karnan, until recently the executive director of the Independent Running Retailer Association. “There is always going to be a place in the market for specialty retail stores,” says Karnan. “But there are a lot of increased expectations from customers.”

Karnan knows independent retailers have an advantage against online megastores through excellent customer service that includes such things as liberal return policies, training classes, educational clinics, directions to the best running routes in town, and a plan for every customer (no matter their goals).

At Fleet Feet Menlo Park on another day, a customer brought in a pair ofAdidas and asked to exchange them for a new pair. The midsoles were broken down. The uppers were dirty. She pointed to a spot in the upper that was beginning to wear through. “How long have you had them?” I asked.

“Nine months,” she replied. She walked out with a brand new pair of the same shoes. This abuse of return policy seemed nuts to me. But such policies are just the beginning if you want to operate a running-shoe store these days.

Karnan also encourages IRRA members to expand beyond the 2,500-square-foot “Main Street” space into 5,000-square-foot environments with high-end merchandising practices seen in concept stores, in the styleand spirit of Niketown and Apple stores. The idea? Making your place as engaging and comfortable as possible.

“As a runner, I loved competing,” says Bob Kennedy, a two-time Olympian in the 5,000 meters who brought that passion with him when he transitioned from professional running into business. A cofounder of the BlueMile chain of running stores in the Indianapolis area, he has since sold his stake in that enterprise, but in 2013 he partnered with marathoner Meb Keflezighi to buy the Movin Shoes chain in San Diego.

Kennedy describes a successful running store as having a split personality. “In the front of the store, the showroom, it’s laid back, a funplace to be,” says Kennedy. Not so in the back of the house. “It’s all business. It’s building efficient systems, tracking inventory, managing the gross margin return. I love that stuff. It’s about knowing what you want to accomplish, and discipline of execution.”

Ed Griffin talks like Kennedy. A former VP of sales in the cable TV industry, Griffin opened Fleet Feet Sports Syracuse in New York 16 years ago, applying his belief that you should think of a running-shoe store as much more than a retail business. His Syracuse store became one of the top-grossing locations of the 162 Fleet Feet franchises across the country. But his 10,000-square-foot space wasn’t enough. In 2012, he opened a second location in nearby Clay. That store is 5,000-square feet, and Griffin hired a “visual merchandising” design firm to develop the environment. Even the mannequins are state-of-the-art.

“I’m bullish about the industry,” says Griffin. He has 55 employees, more than half of them full-time. His stores offer myriad running programs and even trail runs. He also has teams that attend events and conduct funruns and other events. “We acquire 200 new customers a week,” says Griffin, waving off any threat to his business from e-commerce.

But for those dreaming of the shoe-store business as a path to being your own boss, know that it comes with some serious challenges at the outset. “The first few years can be tough,” says Long, who suggested that owners are lucky to earn enough to get by in the first year or two. Some new owners live in the stockroom to save money. “I lived in the back of my Haddonfield store the first year I was in business. It wasn’t too bad: I had a shower and a fold-out couch,” says Dave Welsh, owner of four RunningCo. Stores in New Jersey. “Working for yourself is great, but you work 24/7.”

Ray Pugsley and his wife, Cathy, now own and operate eight Potomac River Running Stores in Northern Virginia and Washington, D.C. Their first year was 2003. They remember one snowy day where they closed out the register and had a little reality check. “We made 94 cents that day,” Pugsley says.

Fleet Foot Menlo Park operating partners Jim Gothers and Lisa Taggart got their start in 2008 through the Fleet Feet Sports Development Company program, which helps with financing and business support for those wanting to own independent franchises. Gothers works six days a week—often seven. He and Taggart not only run the store but also orchestrate a variety of training programs, host fundraising events, stage a 5K race, offer travel with a destination marathon team, and run health fairs and off-site training classes for corporate clients. Gothers might start his day leading a morning running group, then shuttle back and forth from the office to the sales floor all day—selling, training staff, running the numbers, meeting with vendor reps—then after the store closes, teach a running form clinic or host a party. Burnout seems beyond him. “We are all in,” says Taggart while describing how the couple sold their house to keep going.

If you’re his customer, Gothers will know you by name in two minutes. I once watched him fit a 90-year-old woman who had been missing a toe since World War II. After the fitting, tears streamed down her face. “She hasn’t been comfortable in a shoe,” said her daughter, who was also crying, “in 70 years.”

The elaborate fitting process is the most important development in specialty running retail, and it’s the secret weapon against e-commerce. It was a shocker for me at Fleet Feet Menlo Park. On day one, Gothers started instructing me about how to put a shoe on a customer’s foot.

I have to touch their feet? Yikes. In all my years at Hoy’s Sports, the closest I ever came to touching a customer’s foot was with it already inside a shoe. Long agreed. “You’d have them put on the shoes and then see where their big toe was. There was really no analysis involved,” he says.

Things are different these days. At Fleet Feet Sports Minneapolis, Long employs two physicians—a sports podiatrist and a movement specialist—to help with their vigorous foot assessment and fit program.

Ray Pugsley, from the Potomac River stores, believes the elaborate fit process is symbolic of a refocus on the customer base. “All active people are our potential customers, whether they are new to running or seasoned athletes,” says Pugsley.

The difficulty of the process, however, is that it’s hard to work with more than one customer at a time. On average it seemed like I spent at least an exclusive half-hour with each customer I had at Fleet Feet, often longer. I was also trained in an aspect of service that Karnan strongly believes in: My job wasn’t just to sell pairs of shoes but to introduce customers to anything and everything that might help them achieve a goal—insoles, stretching equipment, socks, compression gear. Gothers even trained me in how to fit earbuds.

Actually letting customers try out all this gear is an obvious advantage brick-and-mortar stores have over e-commerce sites. Shoes especially. There’s nothing like actually putting on a pair to determine not only how they fit but also how they feel. The fitting process is a double-edged sword, however: It brings in consumers, but the one-on-one service drives up labor costs.

Counterintuitively, however, all the competition may actually be good for business. Long says that when vendors have made shoes exclusive to specialty running retail, “Our sales of those shoes are lower than when they’re also offered at Dick’s.” He thinks that the marketing campaigns that the big retailers can afford and large-scale distribution of certain shoes actually spill over in his favor.

And while there’s no doubt that the internet remains stiff competition, Rich Wills, the owner of three FITniche specialty running stores in the greater Tampa Bay Area in Florida, says that discounts at online retailers are thinning out. “Their prices are more in line with suggested retail,” says Wills, who keeps an eye on what popular running shoes cost by outlet type. His theory is that the vendors themselves—now that they have their own online stores—aren’t keen about being undercut by other retailers. “With their online stores, the vendors are making significantly more profit,” Wills says. “So they’re cracking down on MSRP (manufacturer’s suggested retail price).”

Surprisingly, many of the independent store operators with whom I spoke worried less about the internet and more about recent developments in new specialty running chains backed by big money. In 2012, Gart Capital Partners, a private equity investment firm in Denver, partnered with The Finish Line Inc., a large retailer of athletic footwear, apparel, and accessories, to form the Running Specialty Group (RSG). RSG has an online store and 75-plus local running stores listed on its website, run.com, including the BlueMile stores that Kennedy cofounded. That kind of buying power gives them an advantage over smaller, independent stores. “It’s capitalism,” Kennedy says. “Strong operators will not have to worry about their business. Weak operators will.”

Dick’s is also jumping into specialty running retail, but at a slower pace than RSG. Right now it has opened three True Runner stores—in Pittsburgh, St. Louis, and Boston. Alex Tomey, general merchandise manager and senior vice president with Dick’s and general manager of True Runner, says that they will evolve based on customer feedback. “We’ll continue to expand True Runner by taking it slow and learning from each new store,” he says.

What Karnan and everyone else tells me is that this means independent owners are going to have to work even harder. Like Griffin said: You’re not just running a shop; you’re building a community. Selling shoes and gear is a start, but it is more about helping people feel better about themselves. Many of the successful operators branch out in creative ways to become established businesses in their communities.

Down the road from Fleet Feet Menlo Park there’s Palo Alto’s ZombieRunner Running Store & Espresso Cafe. Inside, it sells shoes, apparel, gear, and supplements. There’s also an espresso bar with a sofa lounge. Outside a sign reads, THE BEST LATTE IN PALO ALTO.

In Orlando, Hughes has expanded his Track Shack business into events, working with the likes of The Walt Disney Company to stage the Disney Princess Half Marathon, the Walt Disney World Marathon, and other runDisney events. The Potomac River Running Store group has an extensive menu of training programs that it offers to customers.

On my last day working at Fleet Feet Menlo Park, a customer told me that he used to be in good shape but recent years of sedentary living had left him feeling tired and a bit overweight. Glen was a dad, working long hours at a Silicon Valley desk job. He confided in me that he was pushing 40 years of age and the 230 mark on the scale, and looking to reclaim some youth through running again. He’d heard about the shop, about the attention and service. I took Glen through the fitting process. I measured his feet, noting the length and width. I watched him try to do a one-legged squat to get an idea about how his knee tracked. I watched him walk barefoot across the floor. I noted the shape of his foot. I brought out three brands of shoes to start. We tried on each, testing the shoes with runs in the parking lot. He told me he really liked them all and asked some follow-up questions. Then he said, “What else do you have?”

It was yet another busy day. In my peripheral vision, I noticed a line beginning to form. I went through another pair of shoes, and then another. “I like those, too!” he said happily. “What else?”

After a full hour, Glen was set on a pair of Adidas Supernova Glides. He said he’d never felt anything so good. He shyly asked what I thought about training for marathons. Could he do it? Or was he too old? “No way,” I told him. “It’s just about being patient and getting in the work.”

I told Glen about the marathon-training group at the store. He said it sounded great, but laughed and admitted his fear of being dropped from a pack of speedsters. I told him about Steve Tonsfeldt, a local corporate lawyer who had the same fear when he first started training, in 2011. The store’s staff convinced him to join a running group with 16 other customers. “No one gets left behind,” I said.

Tonsfeldt had only run one half marathon, and most of the others had never run a marathon, but they all did the Big Sur International Marathon that year. Tonsfeldt had told me, “I have no doubt that if I had tried to do the program alone, I would have quit.”

I relayed this to Glen. I could see the spark in his eyes, his excitement growing at the prospect of entering a marathon, of his new shoes, of becoming a runner. He was in.

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