The Running Well store offers stride analysis to determine a customer’s biomechanics in order to recommend the perfect shoe.
ENTREPRENEUR | Kathy Gates
When Kathy Gates walked into a Northland running shop in 2011, the entrepreneur was simply planning to chat about a few products she made on the side.
But, by the time the restless marketing and advertising executive left the store, she and the owner had developed a novel plan for Gates to buy the business. In 2012, Gates took control of what is now The Running Well Store and completely changed its trajectory.
The energized Gates had a laser-like focus on improving the retail business, which offers shoes and other running and walking gear for amateurs and dedicated athletes. Gates narrowed the store’s focus, concentrated on superior customer service, expanded community outreach with running clubs and opened a second store in Lee’s Summit.
The changes drastically improved sales. But even with the store’s enormous success, Gates knew she needed help if her niche retail business was going to grow and compete with big box retailers and Amazon. It’s why she applied to ScaleUP! Kansas City.
The free program, which is offered by the UMKC Innovation Center with support from the Kauffman Foundation, offers classes, peer mentoring, professional guidance and more. It’s open to small business owners like Gates who operate in a market capable of supporting more than $1 million in annual sales and who want to rapidly grow their business.
‘I Realized That Was a Training Issue’
ScaleUP! experts showed Gates how tweaking daily processes at her store would allow her to achieve her long-term growth goals.
One of the first major changes Gates made was to create well-documented manuals for how the store should run. ScaleUP! experts pointed out that if Gates wants to grow the business, she needs to make sure any new locations run as smoothly as if she were at the helm leading the employees. She can’t be everywhere at once, so all of her strategies and philosophies need to be in writing.
It’s essential, Gates pointed out, because the store sets itself apart from the competition with customer service. The store offers a free stride analysis to determine a customer’ biomechanics. Staff use that information
to find the ideal shoe for each customer. It’s the kind of approach that Amazon can’t compete with. And, Gates said, it shows in her return rate.
“I know that online (return) rates are 30 percent, and we’re at 4 percent,” she said.
So when she discovered a new employee fitting a shoe incorrectly, she took it very seriously.
“I realized that was a training issue,” she said. “He doesn’t have the same view on footwear and injury prevention as the store.”
Gates knew she needed to update the store’s training process so the problem wouldn’t be repeated by any of her 20 employees and ultimately hurt her brand.
“A non-ScaleUP! business might have wanted to be more hands-on with that individual employee instead of setting up processes,” she said.
The Power of Repeat Business
ScaleUP! also forced Gates to start zeroing in on repeat customers.
“I can constantly be chasing new customers, but to really scale and really grow my business, it’s best to keep my customers and get new customers,” she said.
Gates’ employees are experts at winning over first-time customers. But then customers would use that information to go online and buy their second shoe even though Gates could offer price matches, a rewards program and a one-on-one fitting.
Let’s say a customer simply wanted to buy the same model of shoe they bought first at one of Gates’ stores. If they go to Zappos, they might even see that older style is available at a discount—without realizing that Running Well offered the exact same price as the bigger retailers.
The problem is the customer didn’t know that because The Running Well Store’s website doesn’t have an easy way to search for that model.
Gates knew it was a problem, but she overlooked it until ScaleUP! experts explained how vital repeat business is for growth.
When Debt Makes Sense (and Dollars)
ScaleUP! advisers convinced Gates that taking out a loan can make sense. Until now, Gates has operated without outside financing. It’s a point of pride for her.
But ScaleUP! experts noted that a retail store makes an immediate first impression with clients. The location needs to have a certain look and feel. It has a direct impact on the bottom line.
Gates now realizes her folly. She can see how additional financing would have helped her boost the bottom line faster. It’s one of many mistakes that, thanks to ScaleUP!, she doesn’t intend to make again—Gates said she would be less hesitant to take out a loan in the future.
In It for the Long Run
Longtime employee Rita Truelove said Gates is up for the enormous task of competing with the Amazons of the world. Truelove points out that Gates made impactful changes from Day One of taking over the store.
When Gates first stepped into the business, the previous owner had competing missions to be a shoe store but also cater to sports medicine sales. It sold braces and other medical equipment alongside shoes. The store’s name, Sports Medicine Metro Walk and Run, also confused potential customers who thought it was a medical equipment business.
When Gates first took over management of the store in May 2012, the agreement was that she would try to grow it to a point where she could live off the business. Gates changed the name, focused more on shoes and hit her goal in November. She purchased the store from the previous owner and charged forward.
Truelove credits Gates’ background in marketing with much of her success. But, she said, the owner also is personable and knows how to connect and energize with young and old employees.
Just how determined is Gates to make Running Well a success? Truelove said Gates once went door to door to convince homeowners in a North Kansas City neighborhood to decorate their houses for what has become an annual Christmas light run. The run, which is sponsored by the store, has gone from 30 to 2,000 runners in just a few years.
“Her vision was, how can I take a store of this size and give it some personality and make it into this premier running store?” Truelove said.
ARE YOU READY TO SCALE UP?
ScaleUP! Kansas City—a free program for KC small businesses—is looking for companies that want to supercharge their growth. Learn more at www.scaleupkc.com