Fly Human Fly: Hoka's trail to exponential growth
Fly Human Fly: Hoka's trail to exponential growth
How Hoka became one of the fastest growing athletic shoe brands in the world
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Hoka has become one of the fastest growing athletic shoe brands in the world. Founded in 2009 by two French mountain runners who wanted a shoe more appropriate for downhill running, they were acquired in 2013 for $1.1M by Deckers, the group labelled the “Ugly Shoe Empire” and who also the owner of the UGG brand.
Ten years since its purchase, Hoka has recently posted sales of $1.4b, and since 2018 they’ve almost increase sales by 10x.
Annual sales ($USD)
2018 - $153m
2019 - $223m
2020 - $353m
2021 - $571m
2022 - $892m
2023 - $1.4b
There is still a lot of optimism surrounding Hoka’s growth-potential and the brand is forecasting to hit $2b in sales “pretty soon”.
Coinciding with its sales growth, Hoka’s brand has also become more of a household name, evident by Google Trends data that shows the increase in global online interest over time.
This rise in popularity is also reflected locally in the Australian market.
Hoka’s strong sales and brand growth are reflected in its parent company’s share price, which has experienced 351% growth in the past 5 years.
In Australia, Hoka has been building its presence over the past decade, and grown to a point where they’re opening stores:
📍Melbourne CBD - October 2023
📍Brisbane DFO - October 2023
📍Bondi Junction - November 2023
📍Chadstone - Coming soon
ASX-listed Accent Group (owner of Athlete’s Foot, Hype DC and Stylerunner) holds Hoka’s local distribution license and Hamish Allison, the general manager of their performance division says that sales have grown 20 per cent in the past year across Australia and New Zealand.
How did Hoka achieve such rapid growth in such a fiercely competitive market?
1. Category creation & product differentiation
Despite operating in a market that has been dominated by the likes of Nike, Adidas, Puma etc for a long period of time, Hoka have started to capture a meaningful share of the athletic footwear market.
To do this, they created a new type of athletic shoe that looked and felt totally different to the competition - a lightweight shoe with a highly distinctive thick sole that provides an unprecedented level of cushioning, and great ankle and arch support. While the major athletic footwear brands within the category were trying to create “minimalist” footwear and win the game of “better”, Hoka thought “different” and created a “maximalist” shoe-type. It was a shoe that made you feel like you were flying, and at the time it was created it was a one-of-a-kind.
As explained by a long-time Hoka employee, it wasn’t marketing that led to Hoka’s initial growth:
“I’d like to tell you that we had incredible sales and marketing in the early years, but we didn’t,” he said.
Hoka are a perfect category creation case study - a management practice that highly successful organisation’s (Netflix, Uber, Facebook, Airbnb, Google etc.) have used to achieve fast growth and higher valuations.
Marketing pioneers Al and Laura Ries highlight the concept of category creation in their book “22 Immutable Laws of Branding” and explain that you’re more likely to encounter success if you aim to be “first” to a market than “better” in an existing one, because if you’re the first one to the market you’re already a step ahead of the rest. This is exactly what Hoka did and this approach to success was validated by Mike McManus, Hoka's global sports marketing manager in 2016 who explained:
"For any brand to crack through, you have to be dramatically different,"
Hoka’s product innovation success story triggered the entire industry to change way athletic footwear is designed. Their unique design has provided such utility, that it has led to people falling in love with their brand and products. So much so, that people are willing to get married in their Hoka’s.
Taking note of their rapid growth and success, competitors started launching their own version of shoes that looked like Hoka, and many copycats emerged. Hoka’s brand community is strong however, and it’s managed to build a cult-following largely thanks to its great products and word of mouth, making it bulletproof.
2. Word-of-mouth and community-building using ambassadors and sponsorships
Thanks to Hoka’s innovative product design, they’ve organically attracted a community of highly engaged consumers that have found great utility in wearing their shoes. These loyal consumers not only purchase their footwear, but actively promote Hoka and its products to their wider networks. Hoka have benefited from the marketing flywheel.
In 2009, Hoka representatives attended The Running Event Tradeshow in Austin with the intention of showcasing their new and innovate shoe. They couldn’t afford to buy a booth but after spruiking in the hotel lobby and creating such a buzz, they got invited inside and onto the tradeshow floor.
Unclear whether or not it took place at the same tradeshow, that same year the founders struck a deal with Mark Plaatjes, co-founder of Boulder Running Company and 1993 world marathon champion who purchased 770 pairs of shoes. He fell in love with the shoe design after taking the shoes for a test run.
Not long after this purchase, the founders also struck a deal with ultra-runner Kal Melzter, who began competing in Hoka’s. Meltzer’s passion for the brand kept increasing to the point where he became so involved that he began inputting into the design of the shoes.
Whilst Hoka’s growth continued organically, they started fueling it on a much larger scale. They partnered with elite pro athletes including two-time Olympian Leo Manzano who had an authentic connection to the shoe - He dedicated being injury-free and setting personal bests to Hoka. Ambassador partnerships clearly worked for Hoka as they helped generate awareness and credibility among their core target audience. To further increase their connection with those in the running community, Hoka also sponsored countless running and endurance events, such as Ironman.
In addition to pro-athletes, over time a number of celebrities such as Cameron Diaz, Gwyneth Paltrow, Kate Hudson, Jennifer Garner and Reece Witherspoon (the list goes on) have endorsed their shoes and have been seen wearing Hoka’s on their own social media by their millions of followers. The reach of these social media posts have often been boosted through the additional coverage received from traditional media channels.
The Hoka trend has become highly contagious and a contributing factor to this is their distinct aesthetics. Even Britney Spears has posted an image of herself wearing Hoka’s to her 42.5m Instagram followers.
3. Athletic footwear that advertises itself
Hoka’s distinctive design has made their footwear instantly recognisable. The oversized sole and bright colours make them easy to spot on people when they’re outside running, walking or catching up for a coffee. Much like other products such as Apple’s AirPods or NBA Jersey’s, Hoka shoes are distinct-looking and a product that advertises itself. When people wear their Hoka’s around town, they act like mobile billboards, displaying their affinity and passive approval of the brand and its products.
Why is this important? Because humans have a natural inclination to imitate one another. How we act, what we wear, what we eat, and what we say impacts those around us. This cognitive bias is called “social proofing” and refers to our innate herd mentality.
When we see a group of people acting in a certain way, we tend to automatically believe that that must be the correct, appropriate, desirable thing to do — especially if we’re in a situation that’s unfamiliar or risky.
More specifically, when we wear certain clothes and dress in a certain way (e.g. wear Hoka’s) we make it more likely that our friends, co-workers, family, neighbors, etc. will see what we’re doing and copy it. The more public something is, the more likely people will imitate it.
Powered by social proofing, and thanks to social media and celebrity endorsements, Hoka has grown in popularity with younger shoppers. In the US, they’ve recently doubled the number of purchasers aged 18 to 34 years old. The customer base has significantly grown over the past decade, and it has now well and truly extended from outside of its traditional target audience of marathon, trail and casual runners, to include streetwear and fashion types, older people and anyone who is injured or needs a reason to embrace comfort.
4. Global advertising campaigns
Since its early days, Hoka relied on methods such as their product differentiation, word of mouth, sponsorships and ambassador endorsements to deliver growth. But more recently, to further fuel their growth Hoka launched its first ever advertising campaign in 2022, activating its new “Fly Human Fly” brand platform. A brand platform that reflected the way the shoes made you feel - like you were flying.
The campaign which ran across owned media, digital platforms, and out-of-home, aimed to extend itself outside of Hoka’s core running community, and (better) connect with people of all abilities, and those who were yet to experience the Hoka brand.
Their first campaign was obviously a success because the following year Hoka doubled down on this approach and launched an even larger advertising campaign, expanding on the “Fly Human Fly” creative platform that they debuted the previous year. The new creative was centred around the concept of ‘murmuration’ – a flocking behaviour amongst birds.
Hoka have been on a mission to use paid advertising to speed up their scaling efforts and reach $2b in sales, and to do this they’ve employed a range of tactics worth highlighting.
Not long ago, they produced their first-ever US-based 3D billboard campaign in Times Square, New York to showcase their new Mach X.
To maintain the strong sense of community that they’ve built around their brand, they’ve created a branded content series titled “Humans of HOKA” that highlights inspiring stories from their running community.
Sponsorships continue to form a key part of Hoka’s marketing strategy and in Australia, Hoka are sponsors of events such as the Buffalo Stampede Festival, The Grampians Peaks Trail 100 Mile Race, The Rollercoaster Trail Run and Ironman to name a few.
Hoka have also sponsored high-profile charitable causes such as “Kane’s Run” - a 725km run by ex-AFL player Kane Cornes to raise money and awareness for My Room, a charity dedicated to children's cancer research.
They’re not only sponsoring events, they’re creating their own. The recent Hoka Fly Run event allowed the local running community to engage and experience their brand on a deeper level.
Hoka’s trail
Despite operating in a fiercely competitive athletic footwear market largely dominated by Nike, Hoka has had an incredible rise since introducing its highly differentiated, “maximalist”, thick-soled and lightweight shoes in 2009.
Although Nike is far too big to have felt much impact from Hoka’s rise, Hoka has started to take meaningful market share of the athletic footwear category and the future looks bright even though copycat products continue to emerge.
As their brand and sales continue to grow exponentially, they’re becoming more and more of a key brand within the Deckers portfolio and this looks set to continue which has the potential to boost their share price in the future.
It’s said that brands who create new products that are “different” and not “better” often achieve fast growth and higher valuations - this certainly holds true for Hoka.
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