Case Study: Road Runner Sports Keeping Pace
The very thought of 235,000 running shoes is enough to make a runner swoon.
I have known runners who keep a running shoe closet—when opened, no fewer than 20 pairs of shoes tumble out.
Runners are a strange, quirky, masochistic bunch—knowing how to speak their language is crucial to making it in the mail-order running shoe business.
But you really only have one person to consult—Mike Gotfredson. He is the founder and CEO of Road Runner Sports, the world’s largest running store, catalog and online business—and an avid runner.
Gotfredson began Road Runner Sports in 1983. He had a wife, four children, no job and needed a new pair of running shoes. He decided to start a running shoe mail-order business after dropping an exorbitant 30 bucks on a new pair of Brooks running shoes and taking a six-city tour to investigate the running shoe market.
“I literally got on a plane and flew to [each of the cities]. I rented a car, ripped out the sporting goods section of the phone book, and for one day I went to as many sporting goods stores as I could. I found the same thing: high price, little selection and unknowledgeable staff. I said, ‘I will become the great discounter of running shoes,’” says Gotfredson.
Gotfredson’s goal was $10,000 a month in sales and $1,000 in take-home after expenses. He started with a 1˝x3˝ space ad in Runner’s World, an average of 10 calls a day and four people running the business out of his garage. Road Runner Sports (RRS) turned profitable in four months. It now employs 297 people and mails to 2.4 million runners.
Selling shoes of any kind via mail order is not the easiest market. But running shoes is a niche industry all to itself. The average runner goes through three pairs of running shoes a year. At retail prices they would spend more than $300 annually on shoes. In retail or in mail order there is little guarantee that a shoe will perform well for a runner. Mail order is slightly riskier because customers can’t try on the shoe. And you can’t rely on the running shoe’s size, each style is sized differently, making it a $100 gamble.