Runners’ quirks: Be the weird you want to see in the world | On (on-running.com)
A week ago, Stephen Green reached out and asked me about On-Running. When Stephen asks a question there is usually something under the surface rumbling. I had written stories about On that ranged from exciting and positive like the OAC, something good, and I had written stories about expanding distribution into accounts pitting the brand against mainstream monsters Nike, adidas and New Balance, something bad.
To analyze On, my typical process would be to utilize resale to measure brand heat. I use StockX and other 3rd party channels from eBay to Amazon to fill in the blanks since I don’t have POS data available. There are so few pairs being sold through StockX, it’s not a strong tool for measuring brand heat or the movement and growth of the brand. Without StockX data, I only knew for certain that the advertising had increased considerably around sneakers like the On Roger, a court styled, lifestyle sneaker for Roger Federer. I resorted to 3rd party data and found that in 2023 using the keywords “On-Running Cloudnova + Women’s Athletic Shoes” On-Running in 3rd party saw a dramatic year over year decrease. On wasn’t as widely distributed at the start of 2022. Resale prices showed a limited number of sneakers entering the market. Only 383 pair of the Cloudnova sold at an above retail price of $198.90. Not much above retail, but a solid number for the brand. Over the course of the year and into this year things aren’t so good. The 2023 data showed a stark increase in the number of Cloudnova’s sold. 1,262 pair hit one 3rd party platform at an average price of $128.74. That’s a 35% decrease. One style doesn’t paint a clear picture of an issue, so following up a look at an expensive lace with a more widely distributed pair could provide more insight.
The more readily available Cloud 5 research year over year showed an interesting development to watch. Using the keywords, keywords “On-Running Cloud 5 + Women’s Athletic Shoes” reinforced my initial thesis. On-Running in 2022 was just being rolled out to an expanded distribution network. The company had just gone public at the end of 2021. From January 1st 2022 to June 30th, 2022 the average sold price of the Cloud 5 was $115.26 with only 1,802 pair sold. This isn’t a bad number. In resale a price reflects if the market is saturated. The Cloud 5 BOOTS at 139.99. An average price of $115.26 shows that the promotional price of the Cloud 5 was probably around $89.99.
Here is where things get interesting for a company that has expanded into a number of new doors. From January 1st, 2023 to June 12th, 2023 the average sold price of the Cloud 5 was $97.33 with 5,219 pair sold. These numbers should concern the brand since the Cloud 5 is the more readily available product that was pushed into the marketplace. The promotional price of On Cloud 5 is probably around 69.99 for a seller to generate any profit on a sale of $97 dollars. This information was in line with a post I wrote about the product being discounted last year:
On Running’s Q2 2022 Holds a Compelling Discussion on Reach and Research
In this post I stated that On would have to begin adjusting more quickly than I assumed. I also refrained from telling people at On where the sales table was in this article. I didn’t work for On and I was doing an independent analysis. I’m looking at On on the request of a peer this time and while I didn’t see blood on the wall during a recent retail dive, somewhere in the supply chain On Running shoes are hitting closeout. There are basically two sellers of the massive number of sneakers being sold on the 3rd party site where this data derives. But…I began this post with a title indicating hope and opportunity. On, Hoka, Saucony, Brooks, and other brands have at their disposal the same untapped potential. During a retail dive at Foot Locker I gained valuable insight into how Foot Locker’s new more diverse product mix was working for the company. I’ve been very skeptical of the Stripes for a variety of reasons I still find to be true, but hearing from a long-time store manager that On Running shoes had hit a completely different consumer was eye-opening and could bode well for On and Foot Locker. The rest of this report is for Stephen so I won’t dive into details, but both Foot Locker and On-Running might have more synergy than I initially thought although data shows that there may be an issue brewing in the supply chain.