Fleet Feet Sports has ramped up expansion over the last several years, including opening 22 stores last year and 21 in 2013. But much of the internal efforts over the last year have been focused on transforming the Fleet Feet Sports experience to reach the empowered digital consumer.
Since its last conference, the franchisor has notched many notable firsts, including the introduction of its online store, the hiring of the brand’s first marketing director, and the first national marketing push, Fitnatic Weekend, which arrived during last year’s Black Friday weekend.
At its annual conference held in Pittsburgh last week, Fleet Feet Sports rooted its content and messaging with ‘Amplify,’ a theme meant to embody the power and resonance the brand has when working consistently and interpedently across its 150 locations.
For Jeff Phillips, Fleet Feet Sports president and CEO, the most nerve-wrecking task of the week involved throwing out the first pitch last Wednesday before the Pittsburgh Pirates and Cincinnati Reds game at PNC Park. The pitch a high ¬strike to Pittsburgh Fleet Feet Sports owner and official conference host Bob Shooer kicked off the first ever Runner’s Night at PNC Park, a partnership sponsored by the Pittsburgh store which brought 600 runners to the stadium.
Here, Sports Executive Weekly talks to Phillips about the Amplify theme, some headwinds with the recent softening in the running category and consolidation in the channel, and the franchisor’s ongoing plunge into the digital world.
What’s the ‘Amplify’ theme about? It’s about breaking through the noise with a loud, definable voice that resonates with customers. We’re in a unique position with a large network of independent owners and operators out there in different markets. We can be pretty loud when we’re united and amplifying together. So the theme’s about taking everything we’re doing and amplifying it through our messaging in order to reach more consumers.
Is it largely a marketing push? Certainly marketing is a really big piece of it. We’ve been going through a branding communication refresh. We rolled out ‘Be the Movement’ a few year ago and that was just tremendous. Our stores embraced it, it resonated with our customers, and it resonated with potential customers. We’re now rolling out a new campaign called ‘The Power Of Running.’ Running is a powerful thing physically and mentally, and a fairly simple activity that yields a really high return on investment relating to health. It can also yield a tremendous amount of good in terms of uplifting communities. We wanted to create a consistent message that leverages those ideas and showcases all our stores are doing that speak to that, so we’re building an entire campaign to execute that across the whole system. When we have a really concise singular message that we can amplify across 150 locations, that’s pretty powerful.
How does it build on Experience 2.0? Experience 2.0 wasn't really consumer facing. It was the internal mantra for the things we’re working on. Training and education, digital, marketing, store design and build out, the way we engage customers – basically all the touchpoints with customers. And it’s many things we continually work on. It doesn’t go away.
How was Fitnatic Weekend? It was a huge success. We drove 12 percent comp store growth over that weekend, a time period that the National Retail Federation reported that overall national retail numbers were down. But the really nice thing is we saw a halo affect in the months following that and we had really positive comps all the way through the beginning of February. Now we’re rolling out ‘Power of Running’ and our plan is to launch three to four campaigns across the whole system on an annual basis. And we have a lot of confidence in terms of doing that in the future because Fitnatic became such as huge success. We’ll also do Fitnatic again this year. But it won’t be a weekend campaign, it will run across the whole holiday shopping season.
The running category faced some challenges last year and we noticed Fleet Feet didn’t report comparable-store results after showing a showing a string of double-digit gains for several years. How was Fleet Feet’s performance last year? We had a good year. Everyone knows that running has hit a plateau of sorts from a category standpoint. There are still plenty of people running, and I think the core driver for running is still health and fitness. Our comps have been impacted by industry trends, and we’ve certainly been impacted by the winter weather just like everyone else. The biggest factor impacting our comps is a large number of our highest volume franchisees adding a second, third, fourth or in some cases – a fifth or sixth location – in their market area. When you open another location, it cannibalizes sales for some period of time in the existing locations, and we’ve seen that the past couple of years. Without context, it looks misleading, but in reality we just have owners who want to truly service the size of the community they are in relative to the number of locations they have, and are making the decision to sacrifice short term comp store growth in order to expand the number of locations and drive long-term growth in their markets. Our overall growth in these markets is really strong and our growth across the system is solidly in the double digits – and that’s exciting.
What do you see causing the plateau of the run category? Are there too many run specialty doors? There are some markets that are crowded with specialty running stores, but I see proliferation of distribution as a bigger challenge. Five or six years ago, performance running footwear wasn’t exactly exclusive to run specialty but we were the primary resource for many core products. Now you can find that product in a lot of places. And we went through more than a decade of unprecedented growth in running and I think anyone who is rational would know that it wasn’t sustainable and wouldn’t just continue forever. Then some things that no one could have predicted, like the weather as well as the whole minimalist movement that created a billion dollar category overnight and has now gone over the cliff, affected everyone. So we certainly benefit on some level when those favorable running trends are happening but when they go away, it really hurts the rest of the industry more than us because other channels of distribution will chase those categories when they’re hot. So my feeling is that we’re going through somewhat of a normalization process right now, which I like. This will sound strange coming from a guy in the running business, but I’m happy that running as a category has cooled a little bit because we’ll be the channel of distribution that will benefit the most from that. As the category cools, a lot of other channels of distribution that jumped on the running wave and things like minimal will go out with the tide. We’ll still keep doing what we do so and I feel good about that.
Some of the mainstream chains have seen a shift away from performance towards fashion models. Does that affect Fleet Feet? Affect is too strong a word but fashion does influence us. It’s amazing when you go into our stores now and see a shoe wall. Five of six years ago, particularly men’s shoes, were primarily navy, gray and white and now we’re seeing a blast of vibrant colors. We have seen materials and some of the things from the fashion world transcend into technical in really positive ways. When running gets hot, we benefit. When running slows down, we don't tend to slow down as quickly or as much as the other folks do.
Running Specialty Group recently announced plans to curtail expansion to focus on profitability. Has your expansion stance changed? We have aggressive expansion and we’re on pace to add another 20 locations this year. We have existing franchisees opening second, third or fourth stores that’s actually the biggest driver of our growth. We’re still opening some franchises, we’re still making some acquisitions, and we even have some franchises acquiring their competitors. So we don't plan to deviate from that because it’s working for us. And while we’re growing at a good clip, we also feel we’re growing at a pace where we have the resources to manage it successfully
How is the consolidation affecting Fleet Feet? It doesn't have much affect on us. I probably sound like a football coach getting ready to play the next game, but we’re just focused on what we’re doing and things we can control.
Does run specialty’s message have to change to reach Millennials? I don't know if the message has to change but the method has to change. Millennials shop differently than you and I. So embracing digital at every level is going to be important to connect with Millennials. One of the things we have to do in terms of long-term sustainability, long after I’ve left this business, is we have to connect with the next generation of runners. And we’re going to have to connect on their terms.
What other challenges is digital presenting? We have a lot going on right now. The world is changing fast. The consumer is changing fast. For those of us who have been in the industry for a long time, we’ve seen the power shift from manufacturers to retailers and now fully to the consumer. We’re making sure we stay not just relevant but important to the consumer in the way they want to interact with our brand while not abandoning the tried-and-true things that have defined our brand forever which is the locally owned-and-operated businesses model and deep rooted connections in the communities where we operate. We’re coming up on the 40th anniversary next year and that’s a philosophy that has served this brand well since the first store opened in Sacramento. We’re not looking to deviate from that.
