I am convinced that we will come out of 2020 stronger as an industry, and we will look back on this period as a time that launched us to the next level. However, optimism is not a strategy. The reason for my optimism and the strategy is what follows.
Next Level Objectives for 2021
Establish Marketing as a core competency for specialty run
Enhance Omnichannel sales as a seamless business practice
Continue development of store team leadership
Marketing as core competency: Among the 5 business disciplines of Sales, Marketing, Product, Operations, and Finance, specialty running stores have traditionally had the least sophistication in marketing. Why? Because event driven marketing has effectively grown store business for three decades. We know how to grow sales through events. It’s a natural fit for us. Without events in 2020, stores have found new ways to communicate. Many have dedicated more employee hours to marketing and have explored the use of new tools provided by companies like Upper Quadrant, Drive, or the Karnan Associates marketing suite called KAMRUN. By necessity stores shifted attention to enhanced marketing methods that can pay dividends down the road. We can begin recruiting for marketing expertise, dedicate more hours to the discipline, and raise our external communication to the same levels of personalization that we have created within our showrooms. Specialty stores need to own personalization because relationships and community building is what differentiates your business from Dick’s and Amazon. Specialty cannot out-convenience or out-price larger format stores. You can out-serve and out-personalize them.
Seamless Omnichannel sales: One blessing of 2020 is that running stores now sell online. According to an RIA dealer survey, running stores with e-commerce sites jumped from 3 in 10 in February to 9 in 10 by July among members. Thanks to specialty run focused e-commerce platforms like Fitted and the Run Free Project store owners found turn-key solutions that catered to their business. In April and May online sales accounted for up to 40% of sales for those stores that got online early but have dropped to 1.5% of sales in August and September as traffic patterns reverted to status quo. It’s easy to think of a seamless transactional experience between online and B&M as a convenience strategy—and it is for our large format competition, but for specialty run it’s a service strategy that will allow us to interact with the customer on their terms without sacrificing the quality of the interaction. The recipe is one-part tech, one-part personnel investment, one-part digital expertise, and one-part care. In 2020 Karnan Associates worked with stores that had some of these ingredients. It’s time to put it all together in 2021.
Leadership Development: Next level businesses require next level people and creating a career pathway for talent is a continued emphasis for running retail. If you discover someone who is humble hungry & smart, a lifelong learner, and loves the running industry, find a way to keep them. A thriving wage matters but just as important is a trajectory. Providing visibility on where they can go with you and what they will learn along the way attracts people with the attributes mentioned earlier. If you are a smaller business with limited leadership roles, invest in continued education and polish your talent. If employees feel they are developing on your team, they are more likely to stay. When it comes to wages, invest in output. The revenue per hour specialty best practice on the sales floor is $150/hour per employee. A superstar staff can flex to $200/hour on a busy day (albeit not every day). If three can do the work of four, you can afford to pay them 25% more and your payroll budget remains intact. Finding next level people requires you to know what you want. Write specific job descriptions for positions you need and post jobs that combine sales floor hours with these desired skill sets (e.g. marketing, apparel buying, event planning). A job posting for an apparel product line manager who also merchandises and works the floor attracts a different candidate than a posting for a part-time associate.
We’ve weathered a lot this year as an industry and our resourcefulness put us in great position for 2021. Paul Epstein, owner of Running Wild in Pensacola said to me today, “Before I felt like I was missing key pieces to the puzzle. Now I have all the pieces, and I just need to put the puzzle together.” Paul, I’m quoting you because I couldn’t say it any better. Here’s to our industry and taking it to the next level in 2021.
Parker Karnan