Brooks Outlines Ten-Year Growth Plan on Way to Billion Dollar Goal

The mission: own the run category.

 

We think were at a unique time in the industry, Jim Weber, Brooks president and CEO, told Sports Executive Weekly in an exclusive interview during a media junket to New York City. The opportunity to build our brand is wide open. Our strategic plan is to be the leading brand in the running category. That doesnt mean the biggest, but were going to define what leading means.

 

Leading the way means expanding its resources. So, with support of parent company Berkshire Hathaway, Brooks grew its 2010 marketing budget 42%, R&D expenses 33%, and increased sales development spending/promotions 21%.

 

Like many companies during this economic downturn, Brooks rethought its business model in 2009. While the brand benefited from its decision to focus solely on performance running in 2000-2001, Weber felt the message wasnt being projected as strongly over the past few years, especially as new running brands entered the market. So Brooks decided to become more aggressive in leading the pack. That means capitalizing on its unique position as the only brand focused solely on running and the running community.

 

Running is all we do, Weber says. Its in our DNA. Were the only brand where its our complete focus.

 

Overall, Weber says there are three growth drivers: the running markets strength, product innovation and a run-centric marketing positioning.

 

The category is strong, including 90 million runners worldwide (42.1 million in the U.S.) and an 11% increase in road race participation last year. And theres more good news on the way. Weber says that 60% of runners didnt run a race, while a bevy of new runners are taking to the activity, thanks to a growing health and wellness movement.

 

Its less of a sport than a fitness activity, Weber says. Although sport is an important part of it, the activity is capturing lots of people.

 

Theres also strength in the specialty run channel, which grew 7% last year, to $682 million, despite the downturn. The number greatly exceeded the estimated $200 million level at the start of the decade.

 

This channel is very healthy, Weber says, echoing the comments of members of the IRRA, who believe run specialty can be a billion dollar channel.

 

At Brooks, there have been a number of successes over the past several years, including growing top-line growth, increasing shoe counts at major marathons, gains in Runners Worlds Last Shoe Purchased survey, more review awards, and market share gains in SRA.

 

Weber says this gives Brooks increasing credibility with influencers in the run category.

 

Were not going to be a marketing-driven brand, where well run a couple hundred million in TV commercials to convince people were cool. Were always going to work on the most discerning people in the business, whether theyre SRA owners, [sales] clerks who can sell any shoe they want to that day, coaches, podiatrists, sports medicine professionals, etc. We want those people to respect our product as a shoe thats going to work and perform. The neat thing about this business is that youll know within two weeks after a shoe is launched whether its working.

The key to making continued strides is innovation. Our footwear has never been better, Weber says. The way I describe it is that we have doubled down on the science. Take its DNA technology, its first patent since Hydroflow. The technology-and others-is expected to open up opportunities as it rolls across its brands. And the look of the product also is receiving greater attention.

 

I think in any brand leader, great product should not only work, but should look fantastic, Weber says. Form follows function. So, its coming from purposeful function, but were really challenging ourselves to step out. Part of the reason is all the noise in the marketplace. Theres so much product out there, and everybodys copying everybody, so were pushing ourselves to step out in design, materials and aesthetic.

 

On the branding front, Weber says many brands come from an athletic or outdoor heritage. As such, Brooks plans to further capitalize on distinct sole running focus. Moreover, he believes its Run Happy campaign, which celebrates the running spirit, is more closely aligned to the running culture.

 

It isnt a football field, he says. It isnt a baseball diamond. Its standing at the start of the New York [City] or Chicago marathons, or even the St. Paddys Dash in Seattle with 15,000 to 20,000 people running down a 3-mile hill for green beer. When you look at the energy and flavors of people, and why theyre running, thats what Run Happy is about. Were bringing that authenticity, that kind of fun and spirited approach to it.

 

On the marketing side, the Run Happy mantra is reflected in its new sponsorship of the Rock n Roll Marathon series. It also shows up in various antics played out across road races. For example, recognizing that the Porta Potty was one of the most dreaded experiences for nearly all runners at a road race, Brooks introduced its VIP Porta Potty. Anyone wearing Brooks gear can use a posh bathroom in a heated trailer, with Brooks employees in faux–tuxedo T-shirts guiding the events. We started it at the Marine Corps Marathon, and now its a phenomenon, Weber says.

 

At the recent Chicago Marathon, Brooks introduced the BRASH Tent-a play on the old M*A*S*H television series. Runners were wheeled around in gurneys, received dog tags and given chances for prizes for undergoing a gait analysis. A local comedian even mimicked series character Radar on the intercom. Some 700 runners underwent a gait analysis during the two-day event.

 

I was standing by watching the whole BRASH tent event, and this guy says to his wife, ‘Come here. You got to see this. Every event we go to these guys are doing something weird, Weber said. Thats exactly what were looking for. Were bringing it alive.