✳️Are you Satisfy-ed?

The problem of valuing innovation and sustainability in running apparel

Hey pals,

The sun is beginning to shine in rainy old Britain and I for one cannot wait for longer, brighter days and warmer nights.

I’m sure I’m not the only person who goes onto Satisfy’s website when they have a new season out just to see their comparatively absurdist take on running apparel and huge price tags.

The pricing conundrum for Satisfy is a broader industry issue for emerging brands that value sustainability and design and have to charge a premium to what runners have traditionally been sold to stay afloat. One of the greatest challenges for the running industry is how to sell ethical and sustainable products in way that customers buy into the story behind the price.

Today I unpack how pricing is one of the fundamental issues facing emerging brands in the running industry and the sustainability of our sport.

Hope you enjoy,

Matt

---

Once every season most runners take a collective sharp inhale when they see the prices of the new season of Satsify Running’s apparel. “£130 for a cotton t-shirt with holes all over it!?” They exasperatedly exclaim “£200 for a pair of shorts!?” They spurt out, almost choking on there a white chocolate and macadamia Clif bar.

The reaction is visceral and proves if anything that there is more to a price than a number. As behavioural economist Rory Sutherland routinely proclaims, pricing is as much a feeling as it is a numerical number. The value we ascribe to a product is influenced by the story we're told about it, as well as how it compares to other options. For emerging running apparel brands aiming to create more sustainable running gear, navigating these perceptions is a significant challenge.

Behind every price there are tangible and intangible considerations. At it’s most basic there are the input costs for material, production, design and shipping to make the product and then there’s mark-up to cover the selling of the product and to make a profit. This can vary from 3 to 8 times the cost of creating the apparel. (If you want more detailed behind the scenes of apparel pricing and what goes into starting a sportswear brand, I’ve learned more from this newsletter by Seb Beasant of Torsa than from any book I’ve read on the subject).

Then there’s the intangible, which can disorientate even the experienced marketer. After markups factors in employee, website, and marketing costs, with a healthy profit margin on top to stay afloat, brands can factor in amorphous things like a brand’s perceived prestige, the exclusivity of the product, pricing of competitors in the market and the expected demand for the product, making this last part a game of trial and error. It becomes a test of what are our customers willing to pay for our product. Like a high jump - how high are you willing to go?

As the layman that we are, there is an asymmetry of information here that makes weighing up the price of every part of creating a product when confronted with it impossible. Comfort with pricing is therefore a product of our perceptions of its value.

Historically in outdoor sports, the price of the product has been correlated with how we perceive the effectiveness of its functionality. Take Arcteryx, an almost $1bn brand built on gore-tex coats that sell for £300+. In most situations thats an absurd amount of money, even when compared to most technical coats, but they knew that gore-tex has built up a reputation of having the most effective waterproofing, so when combined with smart design and sophisticated positioning, its able to charge a healthy premium that people will buy. Consequently they now have one of the largest profit margins of any outdoor sports company.

As Arc’teryx found, the easiest way to create a healthy profit margin on technical gear is to add a trusted ingredient brand, such as Gore-Tex or Pertex. Over years of usage and reviews, these brands have become mental shortcuts for quality that when confronted in the shop between two similiar products, you’re likely to go for the material you know than the material you don’t.

Satisfy was built by Brice Partouche on a skater design philosophy and a want for more sustainable production of running apparel. This guiding vision means Satisfy has been utilising unique materials that maintain the functionality of their competitors but do so with unique designs and sustainable manufacturing.

Choosing materials that are not as mass-manufactured as the running industry’s staple polyester means material costs increase. Choosing manufacturing in Portugal rather than cheaper nations means labour costs increase. Having a technical fabric people don’t know and hence don’t trust, and predominantly selling online without most consumers ever touching the fabric, means Satisfy have to lean hard on their marketing copy, ‘storytelling’ and design to sell their products. All of this leads to their higher price point.

Many new brands such as Satisfy, Janji and others began values-first, a belief in opposition to the mass manufactured nature of the sportswear industry. They aspire to create clothes that push consumers away from frenetic capitalism to a more mindful hedonism, where purchases are driven by considered values rather than the simple accumulation of things. They tell stories of provenance and craftsmanship to demonstrate their authenticity, whilst having unique designs to cultivate a distinctive look.

On the surface we should all aspire for that given the state of our social, cultural and environmental climate. Yet runners have been conditioned through decades of consumerism and discounting to expect low prices for reasonable quality. Whilst we all have stories of gear that just fell apart, we also have experiences of gear that lasts forever. I personally have a pair of now sunbleached running shorts that cost me £30 ten years ago that are still going strong. Would a £190 pair of shorts change my experience of running that radically? Personally, no.

When we’re making these valuation decisions we can’t help but think of the value relative to something similar, in what is called the framing effect. Imagine you’re in a running retailer and you see an On long sleeve shirt for £70, you then walk down the aisle and see a Satisfy long sleeve for £290. You begin to see the On shirt as a less risky investment, and hence better value.

Satisfy have attempted to get around this through their choice of premium retail partners. A quick Google will show that Satisfy is predominantly sold online in shops with high ticket outdoor apparel (or Gorpcore for another word) like Sevenstore, and premium fashion e-commerce sites, like Mr Porter. Amongst their competitive set their prices are more reasonably priced, in locations that people expect to pay that level of money for quality, and less likely to be seen as extortionate when compared to other running apparel companies.

Whilst Satisfy stands out as an outlier, the challenge they face points to a broader reckoning taking place within the running industry. As more consumers become conscious of the environmental and ethical costs of fast fashion, there is a growing demand for apparel that aligns with sustainable and values-driven principles. However, the average runner has long been conditioned to expect low prices, even for high-quality products. This creates a tension that will force the industry to evolve. Innovative brands pushing the boundaries on materials, manufacturing, and design will need to find new ways to educate and persuade consumers on the true value of their offerings.

Conversely, consumers will have to rewire their mindsets, learn to appreciate quality and durability and responsible production over just chasing the cheapest price tag. The brands that can most successfully navigate this shift in consumer perceptions stand to gain a competitive edge, while the industry as a whole may be compelled to undergo a fundamental reappraisal of its pricing models and value propositions.

The future of running gear lies in striking a balance between affordability and accountability - a balance that will require a concerted effort from both brands and their customers.