Superbrands 2004 - Brand Autopsy

Superbrands
BRAND
Shoe Companies Use Body
And Sole to Track Down Sales
By Hilary Cassidy
With few exceptions, the athletic shoe industry was a model
of consistency in 2003, following its footsteps of the
prior year. Sporting Goods Intelligence reported U.S. sales
at $8.25 billion, up 3.2%, led by midpriced fashion-oriented and
retro styles from medium-sized lifestyle brands. Of the four largest
players—Nike, Reebok, New Balance and Adidas,
which make up about 70% of the market and generally
have a more performance-oriented positioning—only
Reebok’s revenue jumped significantly.
The rest were flat or saw slight sales declines.
The major increases in the category went to such
brands as K-Swiss (up 50%), Converse (35%) and
Puma (42%,) which attracted the youthful or fashion
customer with unique marketing strategies.
K-Swiss’ ads featured “regular” people rather than
well-known athletes; its new campaign is
themed, “Put your spin on it.” Converse played up
its heritage: Vintage-flavored ads focused on oldschool
basketball while the introduction of the controversially
named Loaded Weapon performance
line tied back to its 1980s Weapon shoe. And Puma
engaged in joint guerrilla marketing with trendy
brands like BMW’s Mini, practiced smart product
placement and ran limited offbeat ads featuring, for
example, the Jamaican Olympic team.
Concurrently, category giant Nike, which spends
about 11-12% of sales on marketing, saw sales dip 1.5%
behind the retro trend. To address that market, Nike
acquired Converse last summer. Its successes includ-
ed the ads and support for its Shox shoe, and its
financial fortitude in signing as endorsers top NBA
rookies LeBron James and Carmelo Anthony.
Adidas may have the NBA rookie market cornered in 2004, however,
having signed straight-to-pro high schoolers Sebastian Telfair
and Josh Smith to expensive deals. Joining NBA stars, including
MVP Kevin Garnett and Tim Duncan, they will add marketing firepower
to the company, which this year unveiled its “Impossible is
Nothing” ad effort. Adidas’ more European-styled product has
1. Nike Nike, Beaverton, OR Wieden + Kennedy, Portland, OR $3,005.0 $145.8 6.88 87% 7.16 59.6
2. Reebok Reebok, Canton, MA Arnell Group, NY 1,036.0 30.4 6.73 81% 6.78 55.3
3. New Balance New Balance Athl. Shoe, Boston Euro RSCG MVBMS, NY 910.0 10.3 6.92 59% 7.21 57.9
4. Adidas Adidas America, Portland, OR TBWA, LA; 180, Amsterdam 750.0 34.1 6.72 76% 6.84 55.6
5. K-Swiss K-Swiss, Westlake Vill., CA Gale Group, NY 369.0 18.6 6.45 36% 5.96 54.4
6. Converse Converse, North Andover, MA Butler, Shine, Stern, SF 245.0 5.3 N/A N/A N/A N/A
7. Vans Vans, Santa Fe Springs, CA In-house 194.0 5.7 6.69 34% 6.42 51.6
8. Asics Asics America, Irvine, CA VitroRobertson, San Diego 178.0 8.8 N/A N/A N/A N/A
S50 JUNE 21, 2004
COMPANY NAME,
LOCATION
FOOTWEAR/ATHLETIC
struggled to resonate in North America, and sales last year declined
7.4%. But the company is moving more design responsibility to its
Portland, Ore., headquarters, and John Shanley, managing director
of Wells Fargo Securities, said early results “are the best-looking
[product] from the chain in probably five years.”
New Balance, the largest privately held athletic shoemaker in
the U.S., had flat sales in ’03 with its high-end product for serious
athletes and baby boomers. The ongoing “N is for Fit . . . N is for
Performance” effort features feet photographed in black-and-white
in performance stances with a colorful “N” on the side of the foot.
Reebok, the lone gainer among the majors, notched increases
of 11% by practicing smart brand differentiation and taking advantage
of a transitional year in the retail environment. On the performance
side, Reebok introduced running and training lines along
with a campaign themed, “Wear the Vector. Outperform,” which
highlighted its athlete endorsers, including Allen Iverson, Ray
Lewis and Andy Roddick, and its NFL and NBA alliances. Reebok
also put support behind its Classic line, which fit the
retro fashion trend and saw 18% sales gains in ’03,
and its young male-targeted Rbk sub-brand. With
endorsers like hip-hop artists Jay-Z and 50 Cent, it
accounted for 15% of Reebok’s sales last year.
Reebok and others also benefited from a Nike-
Foot Locker dispute dating back to 2002. With top
Nike product pulled from Foot Locker stores, the
retailer brought in replacement offerings from rivals.
The feud was resolved last November, and Foot
Locker again carries a broad assortment of Nike
product—in fact, plans include some joint marketing—but
the inroads made by Nike’s competitors
are likely to stick. The Nike-Foot Locker truce is even
more significant as the retail giant is expanding its
Show business: New Balance
market share from 19% to 25% with its purchase this
ad features product and user.
year of 353 Footaction stores, the result of bankruptcy
filings by Footaction parent Footstar (another 287 Footaction
stores are closing). Though retailers will still opt for the product
diversity demanded by consumers, the consolidation means
weaker brands will have a more difficult time competing as the
major players, both on the retail and product side, exercise their
financial muscle, according to Shanley. B
LEAD AGENCY,
LOCATION
TOTAL
SALES
(millions)
MEDIA
EXPENDITURES
(millions)
QUALITY
FAMILIARITY
PURCHASE
INTENT
EQUITY
Sources: Sporting Goods Intelligence (sales; figures are wholesale + outlet/concept stores for U.S. only); TNS/CMR (media); Harris Interactive/EquiTrend: QxFxPI=E (see key, page S18)
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