Store of the Future   //   June 7, 2024

Why Hoka is leaning on community with its first NYC flagship

With a bright blue facade and rugged rock walls inside, Hoka’s new flagship store aims to boost the brand’s reputation as a leading athletic brand and serve as a test bed for new product lines like apparel. 

Hoka’s 9,000-square-foot store on Fifth Avenue in Midtown Manhattan opens today, the first flagship for a brand coming off a record year and its eighth store in the U.S. President Robin Green said the goal of the store is to showcase the brand, highlight bigger campaigns and have a place for the full assortment to be displayed. But there’s also a community component that Green said is meant to connect with the customer in a way they can’t online. Runners can congregate on the first floor of the store to use changing rooms and lockers, and it will serve as a meeting spot for the Hoka Run Club.

“This allows us to put the entire brand in one spot,” Green told Modern Retail. “As we grow brand awareness in the US and other parts of the world, it’s just a great lever for us to get the word out about the brand in a really personal, experiential way for different consumers.”

The opening arrives as Hoka approaches becoming a $2 billion brand. It hit global revenue of $1.8 billion in the last fiscal year, according to earnings from parent company Deckers. That was an increase of 28% from the prior year. CEO David Powers attributed the growth to bigger marketing investments like expanding its global brand campaign, increasing the amount of out-of-home marketing assets and sponsoring running events — like becoming the title sponsor of the UTMB running event. Powers said the brand also is benefiting from a bigger retail footprint; it recently opened its second European store in Paris ahead of the 2024 Summer Olympics.

Rebecca Fitts, senior vice president at commercial real estate firm Alvarez & Marsal, said Hoka’s flagship strategy is akin to Nike — it has used its stores to connect with its brand evangelists via sponsored clubs and runs. “They might be following a little bit of a playbook,” Fitts, former vp at retail platform Leap and in-house real estate estate for Warby Parker, said. “By making a hub like this, they have a lovely extension [of their brand].”

But Hoka is unique among brands in being able to reach an audience beyond athletes. Fitts said the brand’s popularity beyond its initial demographic is part of why it makes sense to create a big, splashy space. During the company’s earnings call in May, CEO Powers said that despite being popular with runners, Hoka is also seeing growth among “fitness-oriented consumers.” Awareness among 18-to-34-year-olds has nearly doubled year over year.

“People feel very strongly about this brand. They’ve got this emotional hook,” Fitts said. “If you’re at Deckers right now, you have to look at this brand equity and say, ‘How do we activate this further? You’re looking at how you tap that passionate fan base.”

Green, who became president of Hoka in February after about 17 years at Nike and at Fleet Feet, said New York City was a strategic choice for a flagship because of the international tourism component as well as the local aspect. “It allows us to really engage and grow within the running community in the New York area,” Green said.  “People can come in, drop their stuff off, change clothes, meet a friend, go for a run, come back, and check out products.”

From a merchandising standpoint, the store will also be among the first in the U.S. to carry Hoka apparel, a small category in which the company sees significant opportunity. Green said Hoka’s clothing has predominantly sold online, as well as in stores overseas, but is newer to the U.S. retail market. 

“Apparel will play a critical role,” she said. ”We really are looking to understand and learn in terms of how consumers engage with that offering.”

The sales experience focuses on product education, whether trail or running or otherwise. Green said sales associates will play a key role in greeting and educating customers about the products. QR codes around the store are available to help customers find what they’re looking for. Anytime new shoes are launched, the store will have a complementary campaign.

“Anybody that walks in the store leaves with a very clear understanding of what we stand for what the product is trying to achieve,” she said. 

Looking ahead, Green said that having the flagship will give Hoka an opportunity to learn more about first-time and repeat consumers. While she wouldn’t share what type of customer data tools Hoka uses, she said sales data can help the company learn more about repeat consumers, new customers or what certain segments growing. Hoka is also working on deploying a membership-style program to fuel those efforts.

As for more stores, Green said future flagships aren’t off the table. 

“It’s an opportunity for us to measure KPIs both in terms of a retail sales perspective, but we also want to understand what consumers really need from the brand — what’s working, what’s not working,” she said. “The more you can know the consumer, the more you’re going to be on the front foot.”