From: acquiredfm
The COVID-19 pandemic presented unique challenges and opportunities for companies in the running gear sector, necessitating rapid adaptations in business models and supply chains. Brooks Running, under CEO Jim Weber, serves as a notable example of a company that successfully navigated this period by leveraging its core focus and data-driven insights [00:50:09].
Initial Challenges and Observations
In March 2020, the onset of the pandemic caused significant disruption across the retail landscape. For Brooks, approximately 90% of its products were sold through retailers, leading to widespread store shutdowns in Europe and North America [00:50:16]. This immediately froze the cash cycle, creating a period of intense uncertainty [00:50:27].
However, Brooks had prior experience with economic downturns, observing that running tended to be recession-resistant. During the Great Recession, for instance, running participation saw double-digit growth in regions like Italy and Spain, partly due to its affordability and convenience [00:50:44]. The pandemic further highlighted running’s “COVID-friendly” nature, as it aligned with social distancing requirements and could be done outdoors [00:51:19].
Brooks’ Strategic Response
Brooks’ ability to adapt effectively stemmed from its deep customer obsession and multi-channel approach [00:52:00].
Market Understanding and Data
Brooks developed a hypothesis that running would recover and used several methods to validate it:
- Strava Data: Daily Strava activity showed consistent growth after initial quarantine shutdowns [00:51:39].
- Field Marketing: Brooks deployed its 45 U.S. field marketing personnel to high-traffic running parks to count runners daily, confirming an increase in participation [00:51:48].
- Digital Sales Monitoring: With visibility into 85% of its retail sell-through, Brooks observed a dramatic shift in digital sales, which increased from 30% to 80% of all product sales by the end of April 2020 [00:52:02].
Supply Chain Agility
A critical adaptation involved swiftly reactivating the supply chain. Brooks turned its supply chain back on 6 to 12 weeks earlier than many other companies [00:52:51]. This confidence was rooted in its exclusive focus on performance running gear, unlike broad-based retailers with diverse product lines that faced greater uncertainty about customer return for lifestyle products [00:53:07]. Managing inventory well is crucial in apparel and footwear, as excess stock can ruin future product cycles [00:53:23].
Focus on Core Product
The decision, made years prior, to “burn the boats” and exclusively serve active runners proved to be a significant advantage [00:06:08]. This singular focus allowed Brooks to react quickly, as it knew its customer base and their consistent need for replacement running shoes, which are considered consumable items [00:17:57].
Outcomes and Learnings
Brooks’ proactive adaptations led to significant growth during the pandemic:
- In May 2020, Brooks sold more product through digital channels than it had in all channels in May 2019 [00:52:21].
- The company grew by 27% in 2020 [00:52:28].
- In 2021, Brooks grew by 31%, and would have achieved 40% growth if not for supply chain issues [00:53:40].
- Brooks achieved over $1.13 billion in revenue in 2021 [00:53:51], entering a “rarefied club” of billion-dollar brands, unique for its premium, full-price product strategy [00:53:57].
Despite these successes, Jim Weber notes that operational resilience and agility in the supply chain remain critical [01:04:16]. Diversifying risk in manufacturing locations, especially after severe shutdowns in Vietnam affected production in late 2021, is a key focus for the future [01:03:41].