Running Room goes south

Written by Camilla Cornell

Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.

The unofficial motto of the U.S. Postal Service could well apply to John Stanton. Whatever the weather, seven days a week, the president of Edmonton-based Running Room dons his shoes and hits the pavement, his lean frame caught up in the Zen of motion. “There are days when it’s really nasty out that I don’t want to do it,” says Stanton. “But I tell myself, ‘If I’m out there and if I don’t like it, I can go back in 10 minutes.’ I hardly ever do.”

Stanton didn’t always have such zeal for running. In his mid-30s, while working as a vice-president in grocery retailing, Stanton was puffing two packs of cigarettes a day and carrying 238 pounds on his five-foot-five frame. “I was a certifiable couch potato,” he says. That changed in 1983, when his wife registered him and his 11-year-old son for a three-kilometre run. “I went,” says Stanton, “and I finished the race. But I was so out of shape it felt more like a marathon.” That run provided the wake-up call Stanton needed. He became, in his words, “a born-again runner.” He quit smoking, started making healthy food choices and began jogging at dawn every morning.

Today, at 54, Stanton has some 56 marathons and countless fun runs and charity events under his belt. And he’s parlayed his mid-life obsession with getting fit into a 60-outlet chain of running stores / social clubs, striking a chord with an aging population eager to fight the ravages of time, disease and spreading waistlines. Alongside the gear, Running Room sells a lifestyle of wellness, offering running clinics and practice runs for everyone from the beginner to the marathoner-in-training. The strategy draws in customers even as it provides a social context that makes it fun to run. “The one race we all face is against aging,” says Stanton. “We’ve been able to introduce people to exercise in a gentler way.”

That philosophy has awakened the athlete in scores of former couch potatoes. Since the first store opened in 1984, Running Room’s revenue has grown an average of 27% per year, and annual sales now total about $50 million. Last year the company entered Quebec, the only province in which it had not operated. Now, like many entrepreneurs faced with northern saturation, Stanton is looking south.

“We used to say we wanted to be Canada’s leading specialty retailer,” says Stanton. “Now we say North America.” Three Running Room outlets are already open in St. Paul, Minn., proof that Stanton’s drive to establish a U.S. beachhead is well under way. Clearly, Stanton is not afraid to tread where other Canadian retailers — think Roots and Future Shop — have failed. But like a true marathoner, Stanton plans to pace himself for the long haul. His formula may be a textbook example for every company looking to turn customers into converts: harnessing modern technology to help deliver old-fashioned, hold-your-hand guidance that washes skeptics and wallflowers with a can-do attitude and a feeling of being “in the club”.

That blueprint could give Running Room a leg up, says Adrienne Goddard, a retail advisor with Kubas Consultants in Toronto. The most impressive aspect of Running Room, Goddard notes, is its ability to foster a sense of community around running. “They make you feel part of something bigger than just going out for a run — you’re part of a group, you’re accepted, you’re part of this 1% of the population that can run more than a mile. It’s that community they create amongst their followers that serves them so well.”

Central to the strategy is Stanton, who spends some 300 days a year on the road, participating in runs and marathons in Canada and the U.S. or giving inspirational talks at Running Room stores. You’ll find his mug shot and the two books he’s authored in every Running Room store. His e-mail address is published on the company website. And when you dial into head office, he is the voice of the virtual receptionist. “That isn’t because I’ve got an ego and I’m trying to stroke it,” says Stanton. “I’m the A&W Root Bear for the Running Room. I’m the mascot.” A significant part of his job, he says, is personally encouraging people to run.

Who better than Stanton to understand the challenges of getting started? Taking his first tentative running steps under cover of darkness, Stanton would see his neighbor — a man he nicknamed “Curtain Charlie” — peeping through the drapes as he jogged down the lane. “I thought he was laughing at me,” Stanton says now. “Like most people when they first start running, I was self-conscious. Then one day he tapped on the door and said, ‘John, I really admire you. I’ve been watching you lose weight and quit smoking. Can you show me how you did it?'”

As Stanton dropped 60 pounds in three months and then began racing, others increasingly sought his counsel. Practical advice for the novice runner was hard to find. Stanton recalls his own frustration with a teenaged salesperson at one of the major chain stores. “He was trying to sell me a pair of racing flats when I needed training shoes,” says Stanton. “He didn’t understand the difference.”

Stanton sniffed a market niche, envisioning a kind of clubhouse at which people could sign up for runs, get advice and buy T-shirts and running shoes. He opened his first shop in the living room of a house in Edmonton. Intended to be a part-time endeavor, the store was such a hit that Stanton had to hire a friend to handle weekday business, while he worked evenings and weekends.

By 1990, Running Room had expanded to eight stores and Stanton finally quit the grocery business to concentrate on the store. Stanton says the firm has never had an unprofitable year. While the average retailer turns its inventory over fewer than three times a year, Running Room’s average is closer to four.

Stanton’s vision has altered little. Running Room locates stores near parks, trails and other runner meccas, and close to cafés where people can gather for post-run get-togethers. Each store acts as a local running hub, posting information on community racing events. Besides providing technical know-how on proper shoe fit and selection, staff also give advice on nutrition and preventing injuries.

As a result, Running Room has overcome a vexing challenge facing every independent retailer: differentiation in a crowded marketplace. Catering to a niche market and delivering a healthy dose of service is what gives Running Room its edge in the $4.1-billion sporting-goods industry. With stores averaging 2,000 sq. ft., Running Room can’t compete on price or breadth of inventory against the likes of Forzani Group Ltd., which operates under several retail banners, including Sport Chek and Sports Experts. “We are specialists,” says Stanton. “We only do running. If you are knowledgeable about your sport, you can probably go [to a Forzani store] and come away satisfied. But if you’re new to the sport or trying to improve, you’re not going to go there.”

Indeed, since 1985, wanna-be runners have each paid $50 to $70 to learn proper running techniques at Running Room clinics. The 10- to 16-week courses aren’t profit centres, but they help build a loyal clientele. “We teach people to run in a friendly non-threatening environment,” says Stanton, “and we trust that when they need shoes or accessories, they will make that purchase at the Running Room.”

But how do you turn your customers into raving fans? Running Room seals the deal by organizing biweekly practice runs, facilitated by Running Room staff, that depart from every store each Wednesday and Sunday. The participants form tight bonds that encourage them to stick out the gasping that mark neophyte runners. “We even find that when people move they’ll hook up with a run club, and that’s how they find new friendships,” says Stanton.

Running Room’s president joins these groups whenever he’s on the road. Besides producing good PR, Stanton’s grassroots participation uncovers information on consumer needs. Running Room’s own clothing line was launched in 1993 after Stanton heard female customers complaining about the fit of existing unisex clothing. When clients groused that the metal zippers on many running jackets froze to their necks in subzero weather and weren’t long enough to cover their buttocks, Running Room produced its popular “drop-bum jacket”, complete with plastic-coated zipper. “The thing I learned in the grocery business is that the further up the ladder you go, the further you are from your customers,” says Stanton. “I think that so many retailers’ downfall is the fact that the people who are making the strategic decisions are so far removed from their customers.”

Stanton’s devotion to detail and service was enough when Running Room was a one-man shop. But as the chain grew, he needed to attract and retain high-performing staff capable of delivering a “wow” customer experience-a perennial problem that haunts every retailer. Mission accomplished: Running Room’s annual employee turnover is 27%, half the retail industry average. Stanton’s secret: recruit staffers from his base of fervent customers.

“Some people have taken early retirement from educational or health-care jobs. They get a settlement or get downsized, and they come work for us,” says Stanton. “We’re not paying them the big bucks they were making at one time, but they’re doing something they really enjoy.”

The love goes a long way. Unlike many retailers, Running Room doesn’t pay staff commission on sales. That ensures customers get products that suit their needs rather than the most expensive. Still, employees are rewarded with a “significant” staff discount and also enjoy the camaraderie of other runners.

But even the best HR practices can flop when a firm fails to communicate policies, procedures and a strategic vision. Running Room keeps its 600-plus employees on course with a sophisticated computer network that connects all 60 outlets.

Rather than relying on word-of-mouth or staff meetings, the company keeps employees in the loop through daily e-mails and a staff-only Web page. “[Staff] can check their schedules or look to see who else is working with them,” says Mike O’Dell, Running Room’s VP. And while there, they’ll see messages about anything from Run for the Cure to Nike’s latest shoe. Says O’Dell: “It allows head office to communicate directly with staff.”

Training programs are also Web-based. “Rather than an old binder,” says Stanton, “we have a living and breathing Web-based operations, training and procedures book. It can change as fast as our market changes.” One staffer might complete courses in a couple weeks, whereas someone starting from scratch might take a month, says O’Dell. Employees’ knowledge is tested with a final exam, and staff must score 80% to pass or it’s back to the drawing board.

Reflecting the core philosophy, Running Room’s website, launched in 1995, also works hard to spawn a chummy sense of community. Customers can register for marathons, join an online discussion board (which Stanton regularly monitors for insights and ideas), check out new products, access training tips or even sign up for an online running clinic.

All clinic participants receive in-store instruction and password-protected access to Web-based training materials, from an outline of Stanton’s running program to training logs and inspirational messages. “That means we’re able to deliver the Marathon Program or the Learn to Run Program the way [John] wants it delivered,” says O’Dell.

Indeed, John Stanton is synonymous with Running Room. The marathon man may even be the store’s biggest marketing tool. Witness his non-stop travel schedule to push the brand and the sport. Stanton has managed to do what other entrepreneurs dream of: keep his pulse on the industry, the company and his customers.

“It really impresses me that John Stanton is so involved in promoting the company, and the sport,” says retail analyst Goddard. She warns, however, that relying on one individual can work against a company should something happen to him suddenly. And as Running Room grows, face-to-face encounters may prove harder to maintain.

Stanton isn’t concerned. “Yes, I am a key part of the success to date — and I plan to be around for some time,” he says. “However, we have a strong succession plan in place with my two sons and a very strong management team all active in today’s business plan and in future plans.”

O’Dell, who gave up a secure job 17 years ago to join Stanton’s team, agrees: “If he was gone tomorrow, the company would still operate.” But he admits the firm would lose a charismatic leader. Stanton’s ability to transmit his vision to others and then work feverishly alongside them to achieve it, says O’Dell, is part of what has made Running Room successful.

Is Stanton a workaholic? “I guess he is,” replies O’Dell. “His passions are his customers and running, so he puts everything out there. He’s the conduit for the customers. I’m always getting calls when he’s on the road saying, ‘This is happening’ or ‘Can we do this?’ And how many CEOs put their e-mail address out there so anyone can contact them?”

Stanton has no plans to slow his pace. If anything, it could pick up as the company takes a run at the U.S.

Running Room already operates three stores in St. Paul, Minn., a city chosen for its proximity to Edmonton. “They are performing at our expectations,” says Stanton. Although Running Room is well-known in Canada, he points out, Stateside it’s the “new kid on the block.”

As in Canada, he says, success in the U.S. depends on having the right people. In fact, Running Room’s foray into Minnesota in 2001 was almost seamless, since operations were handled by an American couple who had previously worked at Running Room in Canada.

Still, the U.S. experience has come with a few surprises. “We thought price would be the primary driver [for U.S. consumers],” says Stanton. Turns out that’s not so. “Quality, having the first and the latest and best, is more important. The consumer is not as price-sensitive as we thought.” This has allowed Running Room to stick to its philosophy of competitive pricing and knowledgeable service. Also, finding high-performance employees that can achieve Running Room’s service standards has been somewhat easier Stateside. “Retail in the U.S. is perceived to be a profession,” says Stanton. As a result, the pool of good retail people is deep.

Overall, Stanton says, the U.S. retail market is faster and held in higher esteem by consumers compared with Canada’s retail sector, in which poor selection and service are too common.

Running Room’s Canadian team will drive its U.S. expansion, which so far includes a plan to open 10 to 12 stores in the Midwest over the next year or so. It will follow its proven expansion strategy: open multiple stores in one area to create critical mass before moving on to the next territory. And there’s no rush, says Stanton: “We want to grow at a rate that keeps us profitable and having fun.”

Mark Sullivan, the New York-based group editor and publisher of Sporting Goods Business, says Running Room’s timing for expanding in the U.S. is dead-on. “Running specialty stores are really hot right now,” he says. As in Canada, America’s running geeks want a store where they can deal with someone who knows their sport. “If [Running Room] competes on service and they compete regionally,” says Sullivan, “they’ll be fine.”

Clearly, Stanton’s passion for people and running makes the difference. He feels a need to spread the word about wellness — and in the case of Running Room, the medium is the message. “Running is a terrific equalizer,” he says. “I’m convinced we could solve most of the world problems if we got everyone in running shoes, shorts and a T-shirt.”

The art of creating customers

How John Stanton got Moncton moving

In 2001, Moncton, N.B. won the dubious distinction of being ranked one of Canada’s fattest cities. Mayor Brian Murphy suggested that “a fast-food culture” might deserve part of the blame. Another potential factor: the proliferation of white-collar occupations in a city in which people used to feel the burn in fishing and lumber jobs.

“We had to do something to get people moving,” says Murphy, an occassional runner. So he called John Stanton, founder and president of Running Room, an Edmonton-based retailer.

Moncton didn’t look like a good candidate for a running store. “We initially thought the market was too small,” says Stanton. But research revealed the city is a catch basin for retail, government and health services for a wide swath of land, including P.E.I. The fact that the town was notable for its lack of fitness enthusiasts didn’t faze Stanton. “It was a potentially active town,” he says. “One of our main marketing thrusts is getting formerly inactive people moving through our walking and running programs.”

Stanton couldn’t resist the chance to create brand-new customers. He scouted a waterfront store location on the Petitcodiac River, where a number of new running / walking trails converged. “We like to put our stores in areas where people can jog in from a run and grab a drink of water,” says Stanton. “We want Running Room to be a part of the neighborhood and to enhance that sense of community.”

Stanton also partnered with Run for the Cure, a fundraiser for the Canadian Breast Cancer Foundation, giving motivational talks and seminars on walking and running. Although such runs are conceived to raise cash for charity, they also make people feel good about tying up their sneakers. “People will tell you they’re not athletic,” says Stanton. “But if they’re there for the cause, it takes away the intimidation factor.” Stanton’s participation has the added effect of putting Running Room top of mind for wanna-be runners.

It worked. The first practice run organized by the Moncton store attracted 100 participants, and the numbers have held. Mayor Murphy is one of the converts. He now runs three times a week, and believes the wellness bug is catching on. Running Room, he says, “is helping to change the health culture of Moncton.”

© 2004 Camilla Cornell

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