Kith presents THE ROGER Pro by On in a Kith-exclusive black & ivory colorway, alongside its original white & indigo iteration. THE ROGER Pro, designed in collaboration with Roger Federer, exists at the intersection of performance, innovation and design with its high-density foam midsole, stability-enhancing footbed and impact absorbing Speedboard® technology. Wearability and durability are also at the forefront of THE ROGER Pro’s construction, as seen through the squeak-proof grip pattern of the shoe’s outer sole and breathable mesh upper. (All images via Kith)
Source: THE ROGER Pro by On
I discussed On Running’s rollout into mainstream retail as a major issue the brand may have to deal with in the future. The article sparked a lot of dialogue on LinkedIn. What many missed in my initial exchange was that I have been excited about a lot of the moves On has made. The back and forth, however, was driven by those who felt my prediction was too early. What was the prediction? On would encounter issues with the promotional environment at mainstream retail accounts like Foot Locker and JD Sports. These issues would be unlike their relationships with specialty running and more premium shopping experiences. Instead of offering a response to the statement that my prediction was too early, I was doing an informal retail dive and found an On account that had already begun discounting the sneakers and displaying them outlet style on a table. A picture is always worth a thousand words and this picture, although it was one retailer, showed an accelerated promotion of On’s running shoes. One store isn’t proof, but it can be a harbinger. I wrote my analysis unprompted. I’m not working with or for On in any capacity. I write white papers so I can speak with certainty when I’m asked questions. The On Running analysis was to establish how the sneaker market has a more compressed timeline. I’m writing this post because another interesting analysis is available for On. The brand is utilizing a playbook every brand uses when it seeks to gain the approval of sneaker culture. The hope is that sneaker culture can carry the brand into new demographics.
Sneaker culture and resale are given the credit for the growth of entire sneaker companies. The attribution to sneaker culture often overlooks sales in the various product options offered by brands and purchased by the different segments of consumers. I’ve written reports comparing resale to retail. My position is that resale mirrors retail and is a predictor of brand heat. As a KPI, resale as a brand performance indicator only holds true on general release footwear vs limited collabs. Limited Sneakers skew the numbers and contribute to faulty data. The only instance when a hyped sneaker isn’t a misnomer is when it’s a model like the Air Jordan 11 which is released annually in unusually large numbers. The hype of a limited sneaker can’t be quantified even when it sells through. SOLD OUT for limited sneakers doesn’t arrive with the number of shoes created. The (Rf)², to be discussed later, is listed as a 300 pair run which is completely insignificant to On Running. Yet, brands will tout a Sold Out Collab as evidence of a successful campaign.
On recently launched a collection with KITH. Looking through the collaborative efforts of Ronnie Fieg provides a chance to sneak a peek into the window of one of the most successful collaborators in the sneaker industry. A partnership like this is a quick way of accessing the elusive sneaker culture. It’s a kind of cheat code. On gains validation in a market it doesn’t really cater to. I’m not saying that On Running is cheating by building a partnership with KITH. Remember I condemned the expansion into too many doors, but I have to share when brands nail partnerships. Any brand working with KITH tends to nail it. KITH is the flagship store for sneaker retail. KITH’s private label efforts are always well executed, and in collaborative efforts with brands, cobranded KITH products always sell, but the question has to be asked: do collabs sell out because true fans of the brands are buying, or is the product selling through because the limited nature of the release allows for a resale value? A more important question is just how sticky are the consumers who buy collabs for the brand?
Here is something to consider, On Running’s website is at about 5.6 million visits a month. KITH’s website is only 1.9 million visits a month. On was a successful brand prior to their IPO and has kept their momentum after their IPO. Once a company becomes publicly traded it has to grow. There are a number of methods to grow. Increasing the number of sneakers sold is the obvious first play. The second is to improve apparel offerings to sell more clothing. The most immediate ability to grow is to find new doors for wholesale. The product will be introduced to a new demographic. Connecting with KITH, as I mentioned earlier, gives On credibility in sneaker culture. The collection for KITH featured: The (Rf)² By Ronnie Fieg & Roger Federer and the two colors of the Roger Pro. The release on the KITH site arrived just in time for the U.S. Open. The Open has been epic with sold out crowds of over 30,000 people hoping to catch Serena’s last competitive tournament. The magic of working with KITH provided On a perfectly timed drop on a platform capable of elevating any brand into the realm of fashion, but On Running is interesting. Typically, KITH is delivering a sports company to the fashion marketplace in an elevated manner. On, in my opinion, is already familiar to the consumer interested in tennis. On is also familiar to fans of fashion. There is a bit of redundancy in this drop, but the limited collection does bring resale into the equation, but again, does resale really introduce a brand to a new segment?
The collaboration with KITH featured three different styles. One of the releases was an ambitious 2 pack collection rare for any brand outside of Nike/Jordan Brand. One of the few brands to attempt the 2-pack sneaker drop was Saucony. It’s rare because it’s risky. I once used a formula to guess how many sneakers were possibly created for a limited drop:
- 70% of shoes are purchased to be worn
- 30% of shoes are purchased to be flipped
- 10% of those shoes will show up on eBay
Using this old formula here are the numbers on eBay: 1 sold, 13 pair listed currently. This would be 4% of 300 pair of the 2 pack collection. The old formula would predict that the majority of people bought the Collection 2 pack from On and KITH to wear. This would be a substantial strategy for On; but this formula needs to be updated because eBay is no longer the leader in resale and there are more people involved in sneaker resale and the new sneaker culture. How should these numbers be broken down in this new environment?
- 60% of shoes are purchased to be worn
- 40% of shoes are purchased to be flipped
- 10% of those shoes will show up on eBay
- 30% of those shoes will show up on StockX
This is not an exact science. On Running’s collection with Ronnie Fieg/KITH sold out, but did it really help to amplify On? Are those people who bought the shoes going to become fans of the brand? I don’t think so and there is the problem for placing energy into collabs. I do happen to think this was a well-executed drop, but I don’t think it added to the fanbase of On. It did continue to highlight Ronnie Fieg’s prowess. Let’s transition to resale using the new formula. The data here is strictly for discussion purposes. There are too many variables that shape resale:
- The overlap in sellers from StockX to eBay
- Resellers buying from other resellers to hold and flip later.
- No real way to know if shoes listed on both are the same sneakers previously sold
On StockX, the (Rf)² shows 30 sold. 34 listed. This 34 listed is not even close to my adjusted 30% of the 300 pair. That’s a positive for On Running. Unless there isn’t any overlap in the 30 pair sold. That’s 21.33% which is closer to the new formula and allows me to say that the (Rf)² didn’t reach the actual fans of On.
What does all of this mean?
On is an intriguing case study. The company is throwing a lot of ideas into the marketplace to accumulate data. This information will certainly inform their marketing and product delivery as they continue to grow into new demographics. The strategy for sneaker releases and bringing energy to the brand isn’t a one level plan of action. The process of rolling out a sneaker requires a multitude of levels to ensure the product sells through and the brand is elevated. There is an interesting bit of information about this that can be used in anyway the reader likes. Resale provides an interesting look at the more readily available sneakers from this collection with KITH. The On the Roger Pro that dropped reverses a long-term trend of StockX leading the way in resale. The Roger Pro has sold 179 pair at a total of $58,194 dollars and an average sold price of 324.86:
Compared to StockX’s data on three listings for this sneaker, On as a brand performs much better in resale on eBay than it does on StockX. The combined listings for the same “keyword” on StockX delivers these numbers: 11 pair sold at an average price of $260, 18 pair sold at an average price of $304, and 5 pair sold at an average price of $332. That’s a total of 34 pair at an average sold price of $298.67. This opens the door to a completely different discussion on resale, but that’s for another post. What do you think about this drop from On and Kith?