On, Hoka starting to take more retail shelf space from Nike, Adidas

Upstart footwear brands such as On Holding and Hoka are grabbing more shelf space at retailers globally, competing with giants like Nike and Adidas as their catchy styles and focus on premium running shoes make them a hit with sneakerheads.

Following a pandemic boom in comfort dressing, the newer brands have been able to pull in customers mainly through their innovative product offerings in the running and performance shoe categories.

Roger Federer-backed On Holding and Decker Outdoors’ Hoka are striking while the iron is hot and behemoths Nike and Adidas, which are slowly losing share in the running category, have warned of a hit to sales as wholesalers like Dick’s Sporting Goods and Foot Locker cut back on orders.

“Nike and Adidas have perhaps fallen behind on innovation compared to some others, who have seemingly found market niches to exploit and have put out products that seem to be really catching on with consumers,” Morningstar Research analyst David Swartz said.

On Running’s market share at Dick’s Sporting in the footwear category increased to 6.1% from the 0.8% it had at the beginning of the year, while Hoka saw its market share rising to 8.7% from 4.2% for the same period.

This is in contrast to Nike and Adidas that have witnessed a steady drop, according to YipitData, which collates market share using email receipt and transaction data.

“I just think they (Hoka, On) are bringing a new aesthetic, and they have catered to like an everyday runner,” Telsey Advisory Group analyst Cristina Fernandez said.

Consumers are willing to try out other brands in the U.S. and demand is being driven by newness and having an alternative to some of the more established players, Fernandez said.

On Holding’s Cloudflow 4 and Hoka’s Clifton 9 have become particular favorites with runners and joggers, who equally use them for everyday work.

“We have a really strong focus on full-price selling and there will not be any major discounting going on… similar to last year… really protecting the brand, thinking long-term, not chasing short-term gains,” On Holding’s Co-CEO and CFO Martin Hoffmann told Reuters in an interview.

“We see growth across the board, in our own retail stores, with our wholesale partners and our e-commerce,” Hoffman said. He added that the products launched in the last 12 to 18 months, mainly in the running category, are still seeing strong demand.

To be sure, Nike and Adidas, which still dominate the market, have been cutting back on their wholesale business to focus on their direct-to-consumer strategy. Nike has also said it has started addressing the slowdown in its running category with newer launches like Invincible 3, Infinity 4 and Vomero 5.

“Now that athletes have a greater choice, they can pick a carbon trainer (high-performance running shoe) from an old brand favorite or a model that suits them and their running,” elite distance runner James Rodgers said.
“I also have a pair of Hokas in my collection, as I like their responsiveness in speed workouts.”