Beating Nike to Become Nike? Check out Oiselle

Nike, take note. Oiselle has figured out how to speak to and sell to female athletes. Can they keep it up?

Olympian, US and NCAA Champion Kara Goucher is sponsored by Oiselle[1]
When Oiselle (WA-ZELL) signed two-time Olympian Kara Goucher away from Nike in 2014, it sent a loud signal that the women’s running apparel company was hungry for a bigger slice of the multi-billion-dollar activewear industry.[2]

Oiselle, founded in 2007, has seen annual revenue growth exceed 100% since 2011.[3] Their trajectory is promising, but the questions the brand faces in 2015 are different and perhaps more challenging than what they were in 2007 (Is there a big enough market that cares about women’s running? Can we compete on cost and quality with Nike and Lululemon?).

The question for Oiselle in 2015 is how they will continue continue delivering customer value through quality products and perceived authenticity while expanding operations to accommodate rapid growth.

 

 

Creating Value

Oiselle designs and sells women’s running apparel. Oiselle practices deep engagement with female athletes and shows a willingness to design exclusively for their lives. The brand has harnessed social media tools and superior inbound marketing content to become the cornerstone of a large community of athletes passionate about supporting women athletes, elite and casual both, in training and in life. The company, including the CEO and many employees, use social media, race events and Oiselle-sponsored meet-ups to speak directly with customers about their professional and personal challenges. The company is built on a sense of authenticity that other brands, like Nike and Under Armour, strive for.

Operational Strategies

Oiselle sells well-designed garments and a sense of community. Their communication delivery methods are always changing to optimize their consumer connection, while their supply chain operations follow a more traditional path.

  1. Manufacturing and Product Development: Fabric sourcing and garment manufacturing happen primarily in China. Designs are developed in-house. Unlike competitors like Nike, Under Armour and Lululemon, Oiselle does not rely on technical materials R&D but rather on simple design improvements (pockets and zippers in the right places, for example) to add value. Many pieces are named after the athlete or employee who inspired the design.

    Among their signature shorts offerings are "Mac Rogas" (left, in yellow), named after Marketing Direct Sarah Mackay.
    In the signature shorts collection are “Mac Rogas” (left) named after Marketing Director Sarah Mackay.
  2. E-commerce and Retail Channels: Since 2007 customers have been able to find Oiselle online at Oiselle.com and at retailers both online and in-store. Each of these channels accounts for about 50% of total revenue.[4] Their current retail partners include hundreds of local running stores, Nordstrom and Amazon. Their e-commerce and social media presence provides a fantastic platform for reaching customers across the country and for connecting Oiselle fans with one another.
  3. Flagship Store: Although the company has been tremendously successful at converting online followers into customers, they are now investing in traditional retail spaces (not unlike e-commerce players Bonobos, Warby Parker and Amazon).[5] The company opened a Flagship Store in Seattle in 2015.[6] The store serves as a community event space and is helping build strong consumer connections to the brand.
  4. “The Flock:” Customers feel so connected to the brand that they are willing to pay $100 for a singlet and the privilege of being Oiselle-branded during races. The company and its fans call this privilege joining the Oiselle Flock.[7] Because Oiselle capped Flock membership at 250, the company had to send away hundreds of fans who were willing to pay to wear “Oiselle.” CEO Sally Bergesen is currently developing a vision of what the Flock will look like in the future.
  5. Elite Athletes and a touch of rebellion: Oiselle has equity agreements with professional athletes Kara Goucher (previously with Nike) and Lauren Fleshman.[8] They also sponsor a number of less-visible women who are training to compete on the world stage. Their heavy investment in athletes, despite their relatively small size, is as a strong signal that the brand is committed to helping women’s running grow. Similarly, they are outspoken critics of what they perceive as opaque and arbitrary national and international sport governance that are hampering the growth of the sport.

What’s Next

Ultimately, Oiselle makes products that women runners love. They have built a successful brand in a highly competitive space by harnessing their e-commerce and social media presence, and have show flexibility in operational design by developing new customer contact points like the Flagship Store and The Flock, and by aligning with admired female athletes. However, their method of value delivery to customers will be challenged by inevitable operational expansion. When a flagship store that hosts Oiselle events is supplanted by tens or hundreds of stores across the country, will those stores mean as much to the female running community? Will customers still feel personally connected to the brand if the CEO is too busy to respond to their tweets and cheer at their races? The current operating model has supported eight years of strong growth, but it may need to adapt to make the next eighty possible.

Short film by Oiselle about the inefficiencies and failures of USA Track and Field

[1] http://modcraftstudio.com/brands/kara-goucher, accessed 12/8/15

[2] http://fortune.com/2014/12/25/athletic-apparel-top-performer/, accessed 12/8/15

[3] http://www.outsideonline.com/1962291/can-oiselle-keep-growing, accessed 12/8/15

[4] http://www.wsj.com/articles/SB10001424052702303802104579451620258974500, accessed 12/8/15

[5] http://www.businessinsider.com/amazons-seattle-bookstore-review-2015-12, accessed 12/8/15

[6] http://www.oiselle.com/blog/story-behind-oiselle-store, accessed 12/8/15

[7] http://www.runnersworld.com/newswire/oiselle-wants-to-be-a-different-kind-of-apparel-brand, accessed 12/8/15

[8]http://www.runnersworld.com/newswire/oiselle-wants-to-be-a-different-kind-of-apparel-brand, accessed 12/8/15

All photo and video content credited to Oiselle unless otherwise noted.

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2 thoughts on “Beating Nike to Become Nike? Check out Oiselle

  1. Great post Margo! I agree that transitioning towards a brick-and-mortar presence is going to be challenging for the company, particularly as it strives to maintain authenticity. I was curious to learn more about how the company’s marketing function was organized. It sounds like the company sticks with social media and a lot of event marketing rather than trying to take Nike head on through advertisements. This type of in-person event marketing seems to be very effective, but must also take a lot of logistical planning and manpower to implement which I why I am curious how the company has approached that function.

  2. Thanks for commenting, Palak!

    (As far as I can tell) their marketing efforts focus on these strategies:

    1. Social Media: inbound stuff driving traffic to own site, contests on twitter/instagram.
    5. Earned media: Coverage in running publications of their sponsored athletes and/or the brand. Much of its earned media covers its more political efforts to make the sport of Track and Field more transparent.
    2. Brand Ambassadors: elite runners and brand lovers to write about the site on their personal blogs, post about them online, wear their apparel at races, etc.
    3. Paid FB advertising: I get their sponsored ads on FB all the time.
    4. Events: These include Oiselle events or co-branded events with partner companies or retailers. Range from race meetups and fashion shows to weekend retreat “runcations” with hundreds of women.

    As for marketing structure, think they have just a few people (ie, 4-5?) on their marketing team given the size of the company (somewhere between 30 and 50 people). They also have sales reps across the country who help host events. It’s a small but feisty team!

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