Asics America clarified a bit a report that came out in mid-November in the Japanese press that indicated the running brand was seeking to lower prices to grow sales (see SEW_1048).
“Five years ago, we had four main products that drove our running sales,” said Monahan. “Today we have nine main products in our running line. This occurred by recognizing that our running collection did not meet the needs of the various distribution channels that exist and the associated pricing strategies required as well as the diversified consumers wants and needs that exist.”
He said that the diversification strategy has resulted in a growing business across multiple channels of distribution, including run specialty. While part of the move centered on increasing opening price-point product, Asics increased its offering in mid to high price product as well.
“Because our business has grown from a base of business centered around the core runner and those channels where that consumer shops, we have increased opportunities within channels that address a more fitness orientated runner,” said Monahan. “Some are price orientated and some are not. As a company we need to make sure we are providing the right product solutions for the channels where that consumer shops, whether it be one that supports higher retail price points or more modest price points.”
At the same time, he said Asics has not wavered from its commitment to running specialty, where many of its highest-priced models are sold.
“Asics and Running Specialty have a shared partnership and we will continue to work to make sure that we deliver the value necessary to support that partnership. We continue to evaluate special programs that allow Running Specialty to take a unique stand with the ASICS brand. These programs will continue to evolve and improve.”
The report from Bloomberg's Asian office quoted Toshiyuki Sano, an executive in charge of finance for Asics Corp., asserting that Asics planned to introduce more entry-level models with a recommended retail price of around $60 as part of a plan to almost double sales in five years. The executive said Asics has mainly been selling shoes priced between $75 and $125, while Nike offers many models for less. Shoes priced under $75 currently account for about 10% of Asics' athletic- footwear sales, Sano told Bloomberg. Sano said, “We can't expand by focusing on the medium-to-high end of the market anymore. We want to offer simpler entry-level models.”
Monahan said Asics has been offering product that range from $60 to $180 in its running line for some time now. But he admitted that Asics is naturally selling more lower-priced models than historically as the brand has grown in popularity. “What has changed is the frequency and quantity of styles as consumer demand has increased as a result of brand awareness being at all time high,” said Monahan.
He also stressed that the brand is only growing across channels it has long served as it aims to maximize opportunities to reach runners wherever they shop.
“We are not seeking new channels, we are looking to get stronger in the ones where we already exist,” said Monahan. “A brands ability to maintain its relevance is based on its ability to innovate and continually exceed consumer expectations. That has been mission number one and will continue to be mission number one. We are not fundamentally changing the position of this brand. We are strategically exploring growth avenues that allow our brand to compete on a bigger stage.”