PARIS — And it’s On.
As its direct-to-consumer sales have skyrocketed, Swiss sports brand On is continuing its store openings apace. Its second outpost in London opened Nov. 3, and its first Paris store will open Friday.
The new retail spot sits under the arches of the tony Marché Saint-Germain-des-Prés, transforming the former Nespresso space into a high-tech sports hub and activity center, a concept that has been core to the brand’s boutique strategy.
Some key design elements from its other stores have been transported, such as the “magic wall” of sliding shoes, while this location boasts a lot of open space. Apparel holds center court at the new location, with sections sorted into outdoor, movement and running.
Apparel is still less than 10 percent of On’s overall sales, but the company views it as a significant growth category. It’s ringing up to be about 25 percent of sales at the London Spitalfields store opened earlier this month, said On general manager, Europe, Bianca Pestalozzi.
“The retail stores are a really important space to showcase the apparel collection,” she said. Wholesale partners continue to focus mostly on footwear.
The brand just posted stellar sales results, with net sales up 46.5 percent in the third quarter to 480.5 million Swiss francs. That growth was driven mostly by its direct-to-consumer business, which accounts for 35 percent of overall sales, up 54.6 percent to 164.7 million Swiss francs year-over-year.
With the explosive growth, the brand is clear that its own retail locations don’t cannibalize the wholesale specialty store business. Wholesale was also up in the latest results, 42.6 percent in the quarter to 315.7 million Swiss francs.
“What we’ve seen in other locations where we’ve opened is that actually the opening of an own store really uplifts the performance for all of the retail partners in the area,” she said, citing the Regent Street London flagship.
Selfridges, JD Sports and other wholesale partners “saw an uplift in traffic because it creates this halo for the brand overall in the city,” she said. “With our multichannel distribution, our retail is the destination where the fans can find everything, and then it helps our retail partners that have focus.”
Retail spots blend high tech and natural elements, and the concept is tailored to specific locations. In Paris, the interior is in ochre to recall the earthy clay of the French Open, whereas in London it’s green — the color of the grass on the Wimbledon courts.
She added that many younger customers are finding the brand through the apparel products first, or through online searches. On also has its own fashion street cred, as evidenced by sales of its Cloudmonster, a particular draw at the London Regent Street store for its quirky shape and sole.
“The fashion appeal of On’s design, even outside of the collaborations, is strong,” she said. “Then on top of that, when we are speaking to an audience that is more in tune with what’s happening in luxury fashion, they look at the Loewe collaboration and [South Korean brand] Post Archive Fashion.”
The Loewe partnership stemmed from designer Jonathan Anderson being a personal wearer of the brand, and those kinds of relationships will remain the focus, she emphasized. The PAF shoe debuted at Men’s Fashion Week back in June.
“We will not be adding lots of lots of collab partners just to create buzz, it will really be those lifetime partnerships,” Pestalozzi said.
If On’s location in Paris is off the beaten tourist path, they selected the neighborhood for its mix of local community, proximity to popular running spots and smattering of passersby. They are continuing to look for additional Paris spots, with a target of opening in the Marais, for more high-traffic locations.
With Olympics fever (or headache) taking over Paris, Pestalozzi knows they will have to wade through a lot of brand noise.
“It’s a very loud period where everybody’s scrambling for attention,” she said. “We’ll definitely have a big emphasis on our athletes.” They will be front and center in campaigns, as well as emphasizing the ‘Dream On’ tagline about teamwork.
The company learned lessons after the last games in Tokyo, when it only had five athletes. It has upped its efforts since then. So far the brand has 30 athletes in several running categories as well as triathalon and tennis, and hopes to add a few more to its roster before July.
On is outfitting the Swiss national team. Roger Federer is an investor and also face of the brand.
Throughout the summer On will have a “big presence” in Paris, centered around the new store as well as an additional pop-up space near Place de la Republique to showcase athletic innovation and facilitate brand exploration for consumers.
“It’s an area that we really invested a lot in, and we’ve made it our goal to be the number three brand when it comes to medal count in the Olympics in L.A. in 2028,” she said. “We’re not quite there yet, but compared to where we were at the Tokyo Olympics we’ve made a huge step.”
The work was evident at the World Athletic Championships in Budapest. “To see a field that used to be primarily Nike and Adidas athletes…it’s already a huge, huge jump from where we were,” she said.
All that work is in hopes of solidifying its identity as it morphs from On Running to just On, which can cause confusion in the marketplace as well as challenges in search and digital marketing.
“The jump from On Running to On actually has been quite an organic one in people’s minds over the years,” she said. “Confusion amongst customers is more probably on the logo recognition, brand recognition piece. Especially with the brand name like On that is pretty generic. When you’re thinking of digital marketing and so on, it is more challenging.”
That work is also being done through customer events, culture, connect and as well as the ‘dream on’ concept.
“The last campaign we launched was all about run culture and basically the fact that running together can trigger things that AI or social media cannot,” she said.
On is also working to accelerate its circular recycling and membership program, Cyclone, which allows shoes to be sent back every six months for a new pair. While still small, it has “really strong fans,” members that are shaping the future of the brand.
Changing consumer behavior is the hardest part of building a circular business model, and customers that participate in the program want incentives. “They expect us as a brand to be doing even more for them, which I think is a good challenge,” she noted.
Those customers are seeking incentives such as discounts, or badges of honor such as special items. The company will expand the recycling program to more product lines soon.
By 2026, the brand aims to have 20 stores in Europe, which will mean opening about five a year over the next three years. Southern Europe is the next target and it will open its first stand-alone store in Milan early next year.
The company will now put an emphasis on southern Europe, including Italy where it will open its first retail store in Milan in 2024. Pestalozzi added: “You’ll see us open 20 to 25 stores a year globally over the next few years as retail becomes a more important part of how we grow our fan base.”