Uniting the Independent: Navigating Retail Challenges with Terry Schalow of the RIA

In this episode of The Footwear Retailer Podcast, Pete Mohr sits down with Terry Schalow, Executive Director of the Running Industry Association (RIA), to explore how independent run specialty stores continue to grow—even amid inflation, tariffs, and supply chain uncertainty.

Terry shares the three pillars of RIA's support strategy:

→ Elevating retailers through tools like freight savings and product data systems

→ Strengthening the channel through collaboration and peer groups

→ Attracting new customers by helping stores build diverse, connected communities

They also cover:

→ What defines a true run specialty store

→ Why the run channel has never seen negative growth in 25 years

→ How stores can prepare for the impact of upcoming tariff increases

→ Why community and communication are more important than ever in retail

Whether you're a footwear retailer or a specialty store owner, this episode offers real-world tactics to improve margins, increase connection, and survive in a changing landscape.

Learn more about the Running Industry Association: https://runningindustry.org

Contact Terry: terry@runningindustry.org

Connect with Host Pete Mohr:

Website: https://simplifyingentrepreneurship.com
Podcast: https://www.thefootwearretailer.com
LinkedIn: https://www.linkedin.com/in/petermohr/

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Transcript

0:00

Terry, it's awesome to have you here on the footwear retailer podcast. Thank you, Pete. I appreciate your invitation. Yeah. You know, you have had a storied career for over 30 years now in the footwear industry. And of course, this podcast is all about independent footwear retailers. And I know your focus has always been in that run side of things. Why don't, before we get into the ria, why don't you sort of go back and tell us what, where everything started for you, you know, not, not the whole history, but how, how you got to where you are today as the executive director of the ria? Yeah, sure. I, I was a track athlete in college and was really was heavily engaged in, in the sport, obviously, and wanted to continue that. And so I was fortunate enough after graduating to get a job as a sales rep with Asics. And I worked for them as a sales rep for a number of years until I moved into sales management. And from there it was an easy segue into product management for me. So I went from the sales side to the product side, did that for about a dozen years, and then moved into an executive role at Asics before leaving ASICS in 2015 to come as the executive director of the International, or, I'm sorry, pennant Run Specialty Retailer association, irra, which morphed into the Running Industry Association a couple years. But I'm 10 years into that 10 year now, and it's been a great ride for me. But the entire time my focus has been on independent run Specialty stores, whether I was a sales rep or whether I was building shoes, I was building them for run specialty stores. And with that focus in mind. And then, of course, now I'm laser focused on independent run Specialty. You know, of course we're going to get into tariff talk in today's discussion, but before we get into that, because that's one of the frustrations independent retailers are facing, whether they're in footwear or any of the other independent retail channels these days. Right. Give us some good news, Terry. Give us the stuff on the good. I always like to start a meeting with good news. So give us the good news of what's happening in the independent Run Specialty channel and the things that people are excited about, the changes that are happening that are giving people the good juices these days. Well, Run Specialty continues to expand its audience and we're here to support that. Obviously, what's really interesting is that in the last 25 years, run specialty has never failed to grow. Now, there's been years when that growth was slow it might be year over year, 1 to 2, 3% over year over year growth, but it's never gone backwards. And so now of course over the past few years it's been double digit growth and now it's more steady and I think more manageable, which is around 5 or 6% annual growth. So mid to low, mid to high single digit growth is very healthy. It's great for retailers to plan their inventory, is great for brands to plan production. And that's what the channel has been maintained or has maintained over the past couple years. But the great thing is it's never failed to grow. We are now by most metrics of 1.6,$1.7 billion channel. And that's a significant number. It is. How many of those you, do you think, Terry, are just the independent retailers as opposed to just the whole market? Oh, that is, that's exclusively independent retailers. That's the number just for independent run specialty. There's, there's probably, I would say 450 businesses. It depends on how you define run specialty. The way we define it is for our membership is it is locally owned, is staffed by runners, it's engaged with the community, it's carrying primarily running product and so on. If it looks, smells, thinks, tastes and acts like a run specialty store, you're in love it. And that's, that's how we, we do not define it as, as multi door ownership with a, you know, lack of local ownership that there's stores out there like that. But that's not what we define as run specialty. It's gotta be locally owned. Now many of them have multiple doors. That's, that's accurate, but it's, it's certainly focused on engaging in the community and supporting the, support the sport and, and growing the business with local customers and continuing to expand that audience. I know the ria, you guys are so involved in so many different aspects. You've got technology in the background. Just as we're recording this, you're just about launching into your yearly summit essentially for all the independent retailers. And you know, you've got webinars in the background. You've put together quite an inclusive package for your association members and kind of go through a little bit about some of that and some of the key points on what the association does for its members. Yeah, that's a good question. So, you know, we've obviously evolved over the past 10 years or so, but we really see it as three pillars of support for our members. And you know, we consider, we want to elevate Our retail community, we want to strengthen the overall industry and we want to attract new customers. Those are the three basic pillars. So within those, if we look at elevating retailers, we do it in a number of, we provide support in a number of ways. Market intelligence is one of them. When retailers provide their POS and we get aggregated data, we give that information right back to them in terms of aggregated data which can, that informs a lot of business decisions. We conduct peer sharing groups called mastermind groups where retailers can sit down with other retailers of like size and direction and tenure in the industry and compare notes with each other. We save them money. You join the ra it's one of the best benefits we have is our freight savings programs. And we have stores that save anywhere between, you know, five grand a year and we've got a couple stores saving$50,000 a year on freight. It's incredible. And there's no catch. You just join raa, you save on your freight and then we have platforms that allow business efficiency, we call it. One of them is our, called our product data collaborative or pdc. And that is where on a seasonal basis retailers can go in, they can look, they can identify their seasonal buy plan, they can export that buy plan into one single aggregated spreadsheet for instant upload into their POS or third party marketing systems. Whatever they use it, just what it does is distill down weeks and sometimes even months worth of work into just a few hours. And it's all free to use as a member. So that's in terms of elevating our retailers, we have those platforms and more in terms of strengthening the industry. Obviously we're about collaboration. So brands belong to our organization as well and we have associate members. So third party organizations like POS Brands, the media, what have you, digital marketing platforms, those that provide some sort of service, either brands or retailers, they're welcome in. And we want everyone to understand what each other does. And so we create, we foster communication and collaboration and we do that through our summit, the upcoming trade show that's exclusive to our members. And we're inviting the top brands, the top retailers. It's a boutique style show. We usually have about 90 retail stores and about 200 heads and invite in the top 22 brands. Some new brands coming into the channel so they can, retailers can get exposed to new product. And our top associates, they all come in there as well. And then we have a member forum, so there's chat forum so they can talk about whatever topics they want. Again, it's all about collaboration, sharing data, sharing insights and making sure that people have the information they need to make good business decisions and partner with the right, whether it's brands or retailers or what have you. And so we're all about collaboration. And then finally that third pillar. We want to attract new customers. We want to expand the audience for both brands and retailers. And so how do you do that? You give them the tools to understand how to reach out to a new audience. And there are some underserved communities out there. The bipoc community for one, the plus size community. We want to make sure that the Run Specialty channel knows who's out there, who wants to come shop in their stores. And, and we provide them the tools to do that. Outreach, you know, a lot of it is just hiring people that look like the customers they want to attract. I want to go into a store for people who are like minded and people who look like me. I understand that. And so making sure that we, we have a very, very diverse community within the ria. It seems like the concept of DEI is being assaulted right now, but we're firmly, firmly in support of DEI initiatives. But translated for what it means for Run Specialty. Yeah. And ensuring that everyone has the opportunity to both shop in the stores to have careers in this field. And, and, and we're firmly in support and will continue to be in support of that. One of the things I noticed on your website when I was flipping around in preparation for the call today was that you guys actually have a job board on your website as well. You know, that's, we, that, that's, that. Is one of our most successful initiatives. We launched it a couple years ago, maybe not that long, maybe a year and a half ago, something like that. But we, our jobs board, we constantly have posts on that. And again we're, we're interested in helping people grow their careers within this channel. And, and our jobs board is uniquely focused on that. It's exposed to the public, but it's a members only posting forum, so you have to be a member to post on the jobs board, but anyone can access it and that helps us bring in new blood and new potential superstars into our channel. Yeah. So good. So good, Terry. I thought that was good. I mean you've got a great website, lots of different information. I encourage any of the listeners, if they're looking to hop on over to the site. It's runningindustry.org and you can find out all sorts of great stuff over there, including the summit. There's different resources, the Job board, a variety of different things, things there too. So it's, yeah, thank you very much. Pretty well laid out site. Yeah, I really appreciate that. Of course that's a, that's always a work in progress, you got to keep it fresh. But you know there's, there's a ton of content that's not, that's not consumer facing, it's, it's, it's member only facing. So they can go into the, members can go in and find archived information. We put out a monthly newsletter and we archive that every, every month and it's on a variety of topics so you can get, you know, we have sections on by the numbers so you can see industry and you know, what are the numbers, what are the sh, what are the sales looking like and what are, what are the insights that you can pull out of that, that can help make you good, make the right business decisions and we provide that to our members through our, our membership portal. Being an independent retailer sometimes can be lonely and I think you know, Terry, being involved, I think you know that I'm on the board of directors with the National Shoe Retailers association and we do a lot of similar sort of things, trying to pull people together, you know, in the brown shoe world and all of that. But it's such an important piece of being able to connect with other like minded retailers that have been through it before. They've been through the people problems, they've been through the product problems, they've been through the process problems. And you know, one of the beautiful things about independent retailers is that if they've been through it and it's caused them pain, they don't want you to go through it, they want to help you through it, they want to fast track you, they, they want to get you, you know, more quickly through those pains and quicker to the gains because you know, they've put in their time and they've done it. And I find so many times when I go to these conventions, when I talk to the communities, when, whether it's either from a coach side or whether, because we own two retail stores still too, we own two Shoetopia stores here in Canada. So whether I'm on the, on the retailer side or whether I'm on the coach side, help other retailers and talks and things like that, it's always this idea that people want to help their brethren in the industry. They want to see them survive, they want to see independent retail flourish and they're willing to share. Yeah, you know, it's, you're, you're Alluding to something that I failed to mention when I was talking about our membership support, is that we're very keen on supporting whether they're brand new stores in the channel are just getting started or stores that we'll call the Rising Stars, or next up stores, like, what are the stores that are growing their businesses that maybe haven't been around for forever, that, you know, five, six years in the business, but running good, good operations. And how do we help them, you know, as you put, as you put it really well, avoid the pain and realize the gain. And so I think that was a great line. And so we're really focused on that. At our upcoming summit, we have our new store track. We, we have mentor stores that will take these, these stores out to dinner, get to, get to know them a little bit, provide them with the insights, they'll be able to meet with each other, they'll be able to look at their own sales, see where they over or under index in sales compared to their peers. And we're there to help support their growth and help them kind of avoid some of the pitfalls at other stores may have experienced that cost money and time and help them continue to grow and grow faster. So we're very keen on supporting that level of stores and we, we do, we call them Rising Stars. Literally. That's awesome. Yeah. Yeah, that's so good. And having the mentor program is such a big piece too, so that they can have somebody to talk to. Yeah, it is. They, they can. You have question on, you know, hey, what kind of tools are you using or how are you doing staffing? I mean, it can be anything. And, you know, what are your hours, how much are you paying your employees? You know, what, what's your say? Do you have an HR handbook? These types of things, you know, they've been done before. You don't need to reinvent the wheel. When you join the ria, you can have plenty of resources and mentor stores help guide you through that process. So you don't spend a bunch of time and a bunch of money trying to figure it out and then waste a bunch of time and bunch of money realizing you've gone down the wrong alleyway. You need to take a different path for sure. You know, talking about some hardships, we had alluded to the fact that we're going to do a little tariff talk today, and I don't want to spend the whole episode talking about tariffs, but it is a big topic for us right now in footwear. And what are you seeing? What are you hearing what's the word that you're getting in the back end of things here, Terry, on what's coming down the pipe and how independent retail is going to deal with it? Well, the first thing I'll say is the good news for the run specialty channel is it is it has typically been recession proof when there's any type of downturn in the economy. And I'll use the example of the housing crisis back in the late aughts. You know, it's. And when that happened and there was a full on recession, running took off because a lot of people when they're tightening their belt, they just go out and buy running shoes. They quit the gym, they buy running shoes. So running has always been a little bit recession proof. The thing that's a little scary about the tariffs that are coming up is it's not just simply a downturn and you know, people tightening up their consumer spending. It's that everything's costing more money that we got inflation, price inflation coming in and people are frightened by that. So does that mean that discretionary income is going to be in terms of spending, direct discretionary income, is it going to be tightened up? It's got to be, absolutely. And the brands have done their level best at this point to try to avoid price increases. But it's coming. It's just even though there's been some negotiations in some of the countries that were initially hit with high tariffs, there's been a pause to that. China alone is going to have, is going to have an effect on our general economy and that is going to ripple or trickle down and have ripple effects on the run specialty channel. It can't not do that. To what effect we don't know. And every brand that sells in the channel has their own unique set of circumstances. Whether the product they're making, the size of the brand, their relationship with their factories and where they're produced. There's just so many variables that go into it. You literally there's no brand comparison. They're all an experimental one and they're all going to have their own strategy to try to weather the storm here. But are we going to see price increases? We're going to. And how much of that will be tolerated by the run specialty consumer? Don't know. You know, the way I've been trying to help our members understand this is that there's three points that we can, we can all share the pain. One, the brands share some of it with their production. So production gives them hopefully a little bit better pricing. The brands can hopefully not raise prices too much for the retailers, and, and therefore the retailers don't have to raise it too much for their customers. But if they can all just share a little bit of the pain, then it's not eventually passed on to, to the retailer in form of exorbitantly high prices. But, you know, again, every brand is, is, has its own different story. They're not all created equal. And there's a storm that's going to be weathered here. How long it goes on, we don't know. Some measure of sanity needs to be applied to these things. You know, we tell our members, and I would encourage anyone, you don't like what's happening with the tariffs and the way it's been applied and the way it's being executed, then contact your local congressman. And not to get political, but we know where it's coming from. So contact your congressman and tell them you don't like it, especially if they're a Republican congressman. That's just the reality of it. It is. You know, we're in Canada, Terry, and I know that the RIA has a certain number of Canadian members as well. They do. And so how are you seeing this from afloat on the Canadian side of things? Because, you know, if, if, for example, it come, they come directly over from Vietnam or they come directly over from China to Canada, we don't have those issues yet. So even from a perspective of price, like when we look at U.S. pricing versus Canadian pricing, because everybody can see that on the Web now, you know, for New Balance or for asics or for any of them, how do you think that's going to be dealt? Well, I, I'm, at first, I'm happy to see that there's a pause in the, in the tariffs that you were applied to Canada initially. It's, I think it's unconscionable that our government would initiate a trade war with our two closest neighbors, Canada and Mexico, and treat them as if somehow they were screwing us over. They're not. Their Canadians have always been wonderful partners for, for the US in trading. There's no such thing as trade imbalances either. It's just, there's this, it's just, it's the ebb and flow of commerce. Yeah. And in a, in a free market economy, you know, you're going to trade so much with Canada and we're going to import so much Canadian goods and, and you're going to import so much American goods, and that's just how it works. It's what happens to the economy in the end and the US economy is incredibly strong. It has been incredibly strong. And so it's unfair to say there's a trade imbalance. It's just the market economy. So I really hope that some semblance of sanity is restored here and that we, the U.S. partners fairly with all the countries that we, that we trade with. When it comes to China, we have to be realistic. The Chinese have not. I guess when it comes to the business world, they've cheated a little bit and I believe that's the case. But does that mean that we should apply, we should go to war with them over tariffs instead of just negotiate something sensible? 145% tariff or wherever it stands today, it doesn't make sense for anyone. And the Chinese are prepared to dig in, that's clear. So we don't know what's going to happen there and it's just a huge question mark. We'll be talking about it at our upcoming show and hopefully by the time this airs there'll be some sort of resolution. But we're all going to feel the pain to some degree. We hope that it doesn't stop the momentum of this channel and we continue to see that year over year growth that we've enjoyed for the last 20 some odd years. I think when we look at it, even Covid days and in Canada we were closed a lot longer than most of the states were for various periods of time and everybody took to either hiking or running and it was such a great time for the athletic industry and the hike industry, it was for the bike industry. Oh my gosh. And so through these times, I think that people will sort of maybe not buy multiples but maybe be willing to invest in a higher end pair or whatever the case is. I mean, I think there's ways around and the idea of being an independent retailer that serves their community, that offers a unique experience that's not just online, that has, you know, people want more than just order them to the door. And I think that's where the independent retailer really focuses. When you can get in, you can get the advice that you need, you can get properly fit, you can go away with that pair of shoes that's going to take you through your next run, your next walk, whatever it may be for a lengthy period of time. And to get through some of the trials and tribulations that we all have to deal with in North America these days, through all of this sort of stuff, one of the things that people want is just to get out in fresh air And I think that bodes well for our industry. I agree. I'll tell you what, I would much rather be in an industry where, where the, that's independently owned specialty based premium goods that connects with its local community where people see as it as a resource as opposed to big box o margin. You know, they're everywhere that, that type of retail I would, I would be terrified. I think that the run specialty industry or any type of independently owned high margin and premium and attracting a premium customer, a higher income demographic customer is certainly going to fare better than other retail industries that are low margin and it's kind of nameless, faceless. They're on every street corner. You know, I fear for them. If you could give one piece of advice to a store owner now who's feeling this pressure and kind of sitting back listening to this, wondering what's going to happen in the next year or two coming ahead, what would it be? Terry, be smart with your inventory. You don't want to pull back, but you want to have, you also want to make sure you have the right products that are going to turn for you and, and help create cash flow. That's the one thing. And of course from a more I guess, strategic point of view, there's, there's the operational that I just described. But in terms you got to connect with your customer, I would double down on the investment of making sure that people feel welcome in your store and that you're doing that community outreach and letting them know that when things are tough, you're there to support them. And again, connecting with that customer and letting them know that you care about them I think is vitally important. I love it. I mean, I think when I look at what you guys are working towards in the ria, the kind of. Some of the things that I see you're serving the independent channel, which is awesome. You're connecting peers and partners. Right. You're helping them with promotion and process, with shared tools, ideas, insights, and you're helping them be more profitable. Even in a time where it's, it's everybody's sort of questioning, are we going to be profitable? Yeah. Being a part of the RIA is going to give you the answers quicker than you would if you were on your own, right? We would sure like to think so, Pete. That's the goal. I mean, I just think the pooled, the pooled community, whether it's in the RIA or nsra, whatever the case, whatever organizations you belong to for your individual store, having this pooled community of people that are Talking and wanting everybody to, you know, get the best information in the quickest amount of time so that we can all carry on and make the decisions. Because as independent retailers, that's what we do. We're decision makers and we need to have the best information that we can have to make the best decision in order to carry forth our business and, you know, create the community. You want to have the people working with you, that you want to give them confidence that you're around to stay and that things are. You're going to weather the storm just like you're giving it to your clients. And I think, you know, all of this is just a great thing. So I hope your conference next week goes awesome and I'm looking forward to hearing about it afterwards and connecting on some other stuff down the road here, too. But what would you say we, you know, there's lots more to talk about, but as we wrap this up, maybe we'll save it for another episode down the road here. What would you say we missed on this, Terry? One or two things that you. That as we've gone through it, you're thinking, oh, we should have hit this or this communication. I think communication is so key, Pete. Yeah, it's whether it's the RA communicating with its members, whether it's the brands communicating with retailers and letting them know what's going on, and then retailers communicating with their local communities. You just got to stay in front of people and just let them know what's happening. Let them know you care about their business. Communication is just so critically and vitally important right now. It's always important. Of course it is. It is. But right now, letting them know that you're not only communicating, you're explaining what's going on, and it's to the best of your ability, and you're letting them know you care about their business, whether it's upstream or downstream, doesn't matter. Letting people you know you care, you might not be able to solve everyone's problem, but if you let them know you care, then you're halfway to the goal and that's that. And people don't need you to solve their problem problems. They just. It's nice to know that someone cares about you personally, cares about your business, cares about the partnership, and you do that through communicating with them honestly, openly, frequently. So that's what I would leave you with, Pete. I love it. I think that's so awesome. I'm just wrapping up a book and I put things in structures all the time, and this one's around leadership and the leadership structure. I call it the csa, which is we should always be honing communication. That's the C S is structure, the structure of our business and A is accountability and fostering accountability in our businesses. And you know that communication. There's a reason I led with communication. I'm absolutely with you, Terry. And we need to be communicating to our clients. We need to be communicating to our team. We need to be communicating to our suppliers. Those are the three key people that make everything happen and have to be in alignment with the business that you run. So I love that. I think that's an awesome place to to end the podcast here today. But before we do, I know I hit your website earlier and we'll include it in the show notes, but Terry, give us how can people get a hold of you? How can people learn more about the organization? I just go to runningindustry.org there's a about us section. You can get my contact information there. I'm easy terry@runningindustry.org terry with a Y and I'm always happy to connect. I like that type of outreach. I like to hear what people have to say, what their challenges are. And you know, I may not know everything there is to know, but I can at least connect you with someone who can answer your question if I can't. And so I'm always try to happy to help membership or not. I mean, I have conversations with stores and brands that are outside of our membership all the time. And we're here to support the entire run industry. It doesn't matter if you're a member or not. We want to see you do well. And so we're here to help. Check us out, Give me a call, email me. We'll do what we can. Thanks so much, Terry. I appreciate it. Great talking to you, Pete. I'm so happy you reached out and anytime, love to do it again. All right, make it a great day. We'll have another one down the road as well. Pete, take care. Thank you.