Running On Change – Multi-Industry Deep Dive

BACKGROUND:

In the 60′s and 70′s the US underwent a ‘running boom’. Marathons became popular and millions began running. Of course, this led to increased demand for shoes. While serious athletes had been wearing/racing in running flats for sometime, the average runner was not quite durable enough for such a spartan sole.

As you’d expect, US shoe manufacturers began producing more cushioned running shoes, with an elevated heel and stabilizing insoles to offset pronation or supination (feet rolling inward or outward on ground strike). If you never gave much thought to running form, this was your best bet to avoid injury and have a relatively comfortable run. Why the elevated heel? Well, because people tend to strike heel first without knowing any better. I did for 10+ years. Most elite runners do NOT heel strike, since people have been running.

THE SHIFT:

A book called, ‘Born to Run‘ by Chris McDouggal which chronicled the ultra-marathons of some tribes in Copper Canyon, Mexico, spurred what might be called, ‘the barefoot running revolution’ . The Copper Canyon tribes did NOT run barefoot, oddly enough. Runners of all experience levels began wearing Vibram Five Fingers (toe shoes) and the Nike Free became incredibly popular. Runners also began trying to shift their landing zone from heel to mid-foot or the ball of their foot. Some of the perceived benefits:

• Be more like the crowd (most important and ridiculous)
• Ankle is a weak link, landing on heel exposes weak link while the mid-foot strike = more elasticity and energy return (legitimate, but a tough physical changeover for most). This is well understood and true.
• Better ground feel – they even came up with a name for it, http://www.bio-medicine.org/biology-definition/Proprioception/. This really depends on the surface you’re running on.

RUNNING SHOE INDUSTRY REACTION:

The initial industry reaction: Brooks and New Balance initially resisted the ‘fad’. (2009′ish).  Big companies with established market-share don’t like having to re-engineer their products, especially when they’ve been working well for decades with slow and predictable upgrade cycles. Colors change sometimes! People switching from running to cycling was more of a threat than people changing ‘how’ they ran.  Would this move confuse current customers during their repurchase phase(s)?

http://talk.brooksrunning.com/2010/01/25/barefoot-running-an-open-letter-from-brooks-ceo-jim-weber/ (Brooks CEO on demerits of running without shoes)

Companies such as Newton Running and Inov-8 began to emerge from relative obscurity as people became more aware of running form. Asics only very recently came out with a Nike Free knockoff (2012) as they lost their #1 spot to New Balance in the running shoe segment.

PRESENT DAY:

Companies such as New Balance have gone sofar as to recruit people resembling Jesus that live in Boulder, CO to help design shoes that aren’t really shoes at all…just glorified racing flats. (see below – a very talented runner but this is a horrible idea for most people who weight more than 130 lbs). I’d say anything is more certainly better than barefoot.

Some creative from the New Balance site below:

Not to chase trends, eh? Why do they need mathematical operators?  As a person who has run injury free over the past 12 years, changed to a more midfoot strike but has NOT gone to a minimalist shoe I’ll gladly expose the hype. A minimalist feel means you will get really screwed if you step on a huge rock while trail running, additionally you don’t have any cushioning in the shoe to reduce impact absorption on your joints.

Unless you’re extremely light or have been running with flats productively for years, (think professional distance runner) you NEED some level of cushioning. There may be some merit to walking around in flats (they need not be $100) to strengthen your feet a bit if you’ve been wearing high heeled shoes with inserts for years….but running on rocky trails in flats…come on guys and girls.

Companies such as Newton Running reduce the height difference between the heel and toe of their shoes in order to promote a more mid-foot strike, without cutting back profusely on cushioning. I like Newton shoes and they did help me sort out my running form without hurting myself on too minimalist a shoe.

THE ANTITHESIS:

Hoka One One. What?

Yes, maximalist shoes. A European shoe company has begun making a splash with ultramarathon runners here in the US. These shoes have nearly 3x the cushioning of a traditional trail runner and probably 5x or more that of a minimalist trail shoe. I’ve put about 80 miles in a pair and they are quite comfortable. They’re not my sole shoe, but I do wear them about 1/3rd of the time. They do have a very low heel to toe drop, the same as the New Balance Minimus line, 4mm. Note that smaller foot sizes may have an exaggerated heel/toe offset due to basic geometry.

SO WHAT? (food for thought)

• What’s the pivot point that’ll fundamentally shift consumer perception of your product, in your industry? A book about runners in a canyon?
• Is what you’re currently doing encouraging safe usage or might your customers be developing bad habits?
• Do your customers need some new good habits that you can proactively introduce? (real of ‘feel good’ habits)
• If a new preference is emerging, how do you avoid bucking the trend while not destabilizing consumer repeat purchase patterns within existing product lines?
• If the product cycle is changing quickly and even the big players have entered the new trend, is there room to go against the grain for some small sub-set of the market that may reach back into the broader market (think Hokas)?
• Can one company service ALL preferences within the market and still understand their core customer?
• Do threats come from within the existing product or from product substitutes (running vs cycling)?

PRICING & OTHER INDUSTRIES:

It’s relevant to note that Newtons, Hoka and other specialty running shoe manufacturers charge quite a premium. Newtons run between $150-$175 as do Hokas. New Balance Minimus line shoes are well over $100 even though the amount of material used is less than half that of their legacy stability/motion control shoes. They are getting more and giving less while telling you quite clearly you should be excited about receiving less, because it’s good for you. While I can’t think of any one situation that quite parallels this one step-by-step, I’ll throw out a few:

• Hybrid cars – horsepower per dollar traded for miles per gallon. Automakers must produce to avert market-share losses and preserve loyalty. Interestingly enough, Honda, while having several Hybrid and Electric vehicles still does well with the Civic and new Fit models simply because they’ve squeezed the most possible ‘fun’ out of small 4-cylinder motors using innovative engineering (V-tec comes to mind, dual overhead cams, etc…). I can’t comment on margins across these scenarios, but I’d imagine they’re fairly even given the burnt out consumer as of late.

• Travel Price/Rate Discovery- several years ago, mainly driven by cheap or free API access to hotel and flight pricing, a new breed of travel site began to emerge: the meta-search engine. Kayak.com and Sidestep.com were the leaders…Kayak survived (the brand anyway). They effectively replaced the Online Travel Agency’s search function and also created a much improved user experience for accessing maximum price information as quickly and easily as possible. The consumer got better price discovery and the OTA entered a hyper-competitive world which they’re still entrenched in. Search engines want their ad dollars and Hotel companies want reduced margins and to steer consumer demand their way directly. An interesting point is that Kayak’s proper name is ‘Kayak Software Company’.

• Smartphones – what happened to Nokia? They had enough cash to develop models that were just as good as the first iPhone or Android rigs. Probably lots of discussions about how it was a fad, people can’t type on it, focus groups don’t like it, etc…whoops.

What’s next?

Jeff