On wants to be the No. 1 footwear choice for all runners. A brick-and-mortar presence is a crucial part of this strategy.
The Swiss running shoe brand, which announced results for the fourth quarter and full year on Friday morning, outlined its strategy for wholesale partnerships as well as its DTC channels via its website and brand-owned stores.
In 2021, On saw a net sales growth of 70% to CHF 725 million (about $775.05 million) over the prior year. Within DTC channels, net sales grew 71.9% in 2021. Wholesale sales channel grew 69.5%. Given the better than expected results in Q4, On expects net sales in 2022 to surpass CHF 990 million (or more than $1058.35 million), at a growth rate of 37% year over year.
In a call with investors discussing the company’s financial results, On executives highlighted how strategic retail partnerships facilitate connections with different demographics of consumers.
“We are not only creating products that our customers love, but also reaching them where they shop,” said On co-founder and executive co-chairman David Allemann. “On’s omnichannel strategy is firing on all cylinders.”
On is sold in more than 8,700 stores, which shop-in-shops at more than 1,000 locations. The is also growing its own physical store footprint. In China, the company opened two new stores in Q4, with plans to open even more stores in the U.S. and Switzerland in the coming year.
Within wholesale, On highlighted partnerships with key retailers like REI, Nordstrom, Foot Locker, JD Sports and Dick’s Sporting Goods. Each of these retailers caters to a specific consumer that On is looking to win over.
For example, Foot Locker and JD Sports place On in front of younger consumers across the U.K and the U.S, explained co-CEO Marc Maurer. With Dick’s, On reaches the outdoors-focused consumer. As such, On is launching a pilot program that introduces On-branded spaces with a “targeted assortment” of running shoes within Dick’s stores this summer, including the retailer’s outdoor experiential store concept, Public Lands.
“Our goal and our dream is to be No.1 on runners’ feet, and Dick’s plays a very important role there,” Maurer said.
On executives also called out a campaign with REI, which involved a pre-launch of the Cloudultra trail running shoe for REI’s 20 million lifetime members, which Allemann described as a “huge win for building on credibility in the outdoor space.” To further reach that outdoor consumer, On has launched the Cloudvista, a versatile shoe made for gravel roads and tracks.
On’s own website, a key element to the brand’s DTC arm, accounted for 36% of its business in 2021. This channel is also important for On, as it offers data and insights to predict relevant offerings for consumers, a key to customers retention.
For On to achieve a full omnichannel business, both wholesale and DTC channels are essential.
“We are not seeing a cannibalization of our wholesale and DTC channels,” Allemann said. “Both channels showed sustained strong growth at the same time and are highly complementary.”