Rethinking Price in the Premium Sneaker Market

On a summer day in July 2025, sneaker shelves across key retail markets quietly saw a shift. Swiss brand On had raised the price of several flagship models by about $10. No campaigns. No public justifications. Just a clean upward move, pushing models like the Cloudtilt to $170 in the U.S. market.

The timing was not the best. The retail sector was already experiencing turbulence due to inflationary pressures worldwide, changing consumer preferences, and new U.S. tariffs on shoe imports from Asia. Some brands were trying to fix the problem—for some of them, it meant decreasing the margins, while others went for heavy promotions. On came a different approach.

Instead of hedging against duties by accelerating shipments or negotiating production costs, it did the simplest thing possible: passed the cost on to the consumer. In a year where tariffs reached up to 20%, On chose to bet on its consumer base.

A Growth Story in Hard Numbers

From $286 million in 2019 revenue to a projected $3.4 to $3.7 billion in 2025, On’s trajectory is steep and direct. The company raised its full-year guidance to CHF 2.98 billion as of Q3 2025. At prevailing exchange rates, that converts to roughly $3.37 billion USD.

Despite reporting a 30% decline in its stock value over the past 12 months, On is forecasting a 34% increase in sales this fiscal year. These aren’t empty projections. The brand’s retail footprint is expanding at a pace—over 20 new stores annually, with high-visibility locations in cities like Palo Alto, Chengdu, and major European retail capitals. The store strategy is purposeful: On isn’t trying to be everywhere. It’s focused on being exactly where its audience expects it to be.

Who’s Buying—and Why?

You might expect price hikes to thin out a customer base. That hasn’t happened here. On’s consumer isn’t primarily the hardcore runner or sneakerhead. Many are professionals looking for a shoe that bridges style and support. Some discovered the brand while nursing foot pain; others were drawn in by the minimalist design. What keeps them is comfort and reliability.

One repeat buyer told The Wall Street Journal that a single pair of Ons resolved her heel issues—now she owns five. These aren’t one-off purchases driven by trend cycles. They’re repeat decisions grounded in user experience.

The shoe that begins as a running purchase becomes a staple for travel, commuting, and even casual office wear. That multifunctional role gives On stickiness that isn’t purely fashion-driven.

No Discounts, No Panic

In the midst of one of the most promotion-heavy years in global retail, On has not signalled any plans to offer holiday discounts. While there has been no official press release, On’s Q3 2025 earnings report points to a gross profit margin of 65.7%, driven by a high percentage of full-price Direct-to-Consumer (DTC) sales. That margin reinforces On’s commitment to holding pricing firm in a markdown-heavy season.

Nike has also raised prices but avoided linking them directly to tariffs. Adidas, in contrast, has publicly warned that recent U.S. trade policies will increase prices and impact demand. While these giants navigate volume across broader demographics, On is making a different wager: that its more affluent consumers will not respond to price sensitivity in the same way.

Playing Both Sides of the Runway

Part of On’s edge is in its ability to balance performance with fashion. It’s not just selling sneakers; it’s selling a lifestyle—without overstating it. In 2024 and again in 2025, marathoner Hellen Obiri ran and won major races—including the 2025 New York City Marathon—wearing On shoes. The brand cited her victories prominently in its Q3 2025 financial report.

At the same time, a high-profile collaboration with actor Zendaya—announced in June 2024—supports On’s push into lifestyle and fashion. She’s the face of On’s “Dream Together” campaign and a series of lifestyle collections launched globally.

These two moves don’t clash. Instead, they anchor the brand across different usage spectrums: athletic authenticity and visual relevance.

The Role of Tariffs and Timing

U.S. tariffs on imported shoes from Asia—up to 20% in recent revisions—are forcing brands to reassess their global pricing strategies. Many hedge with warehousing or renegotiate factory terms. One’s approach? Transparency and execution. By passing the cost to consumers without diluting brand value, it positions itself as premium without the theatrics.

It’s not just about reacting to cost pressures. It’s about staying aligned with consumer expectations. That simplicity, in a way, has become a form of differentiation.

What Retailers and Marketers Can Learn

The lesson isn’t to raise prices. It’s to know who you’re talking to.

On has built a customer base that values consistency, quality, and a certain restraint in branding. The absence of heavy promotion reinforces the idea that the product is worth what it costs. It’s an old-school philosophy that gains renewed relevance in unstable markets.

The retail environment is increasingly binary—brands either chase volume or own a premium niche. One has made its choice.

Risks Beneath the Surface

The company is not able to avoid macroeconomic pressures even if it is experiencing a growth story. A 30% decline in share price is a clear indicator of the concerns raised by the investors. Nevertheless, its total sales do not account for more than 10% of Nike’s, so the scale issue remains an obstacle.

The brand’s dependence on affluent consumers makes it very vulnerable if there is a downturn in the luxury segment. Besides, hybrid lifestyle-performance positioning is accepted at present, but taste cycles change. One will have to keep being relevant without compromising its brand identity, which will be a difficult task.

Closing Thoughts

If you’re in product strategy, pricing, or retail operations, On’s case offers real-world takeaways:

Understand your consumer. Stay consistent in value delivery. Don’t be afraid to be transparent. And remember that pricing isn’t just maths—it’s messaging.

The global sneaker market is watching what On does next. Not because it’s the biggest. But because it’s one of the few willing to zig when others zag.